Business professor Mike Ivanoff spoke to Country 107 radio news last week about Target pulling out of Canada. Here’s the blog post from the interview:
An economics expert from the University of the Fraser Valley says Target’s failure in Canada amounted to a bad strategic plan and bad management.
Associate professor Mike Ivanof says Target misunderstood the Canadian consumer, assuming that the Target brand would be enough even if the prices weren’t the same as in the US.
“But I think the Canadian consumer is probably a little more price sensitive than the US consumer. So not only were they not matching the price in the United States for the merchandise but the prices were quite a bit higher. Furthermore the diversity of the products were nowhere near what they have in the United States.”
Ivanof says if it had been up to him he would have moved in to Canada incrementally, with a few stores in select demographics that could have supported them.
He also says however that the loss of Target, combined with Mexx and Sony stores closing down, is a sign that Canada’s economy may not be as strong as we think, despite the facade of prosperity.