Target low-balls Walmart in Canada
Canadians have had a lot of problems with Target since it first opened for business in their country in 2013. Aside from out-of-stocks, Canadians have been particularly peeved that Target’s prices in Canada have been higher than in the U.S. Now, however, Target has an independent source to assure consumers up north that its prices are not only in line with what Americans pay, but are lower than what Walmart charges.
According to a market basket study of 33 identical national brand products conducted by Kantar Retail, Target Canada’s prices were 3.9 percent lower than Walmart. Customers who paid for these goods with their REDcard would have paid 8.7 percent less than Walmart.
In the company’s second quarter earnings call, Kathee Tesija, Target’s chief merchandising and supply chain officer, said, "While both our own studies and external surveys show that we are already priced very competitively, the team has made decisive changes to ensure we respond even more quickly to pricing dynamics in the Canadian marketplace, including comparison shopping our prices versus competitors on more items more frequently, implementing enhanced tracking of competitor promotions to ensure we react quickly, and implementing a price match policy, which includes online and local competition with a more flexible process for guests."
Kantar’s findings may not be enough, at least not yet, to convince Canadians of the deals to be had at Target, where Robin Sherk, director of retail insights at Kantar, told the Financial Post, the chain faces an uphill battle.
Target does appear to be making progress in Canada. The chain reported sales had picked up substantially from the first to the second quarter.
- Target’s Canadian folly – RetailWire
- Target Canada prices drop lower than Walmart’s, study finds – Financial Post
- Target’s (TGT) CEO Brian Cornell on Q2 2014 Results (Earnings Call Transcript) – Seeking Alpha
What will it take for Target to convince Canadians who are no longer shopping it its stores that it has fixed its problems? Are you more or less optimistic now than earlier this year that Target can get it right in Canada?