TORONTO - For the first time in company history, Target is leaving the United States. Within the next two years, Canadians will become Target shoppers, an arrival that will likely force competitors to up their ante or risk folding.
"Certainly, it will heighten the level of competition in general merchandise in Canada," Ed Strapagiel, executive vice-president of retail consultancy Kubas Primedia, told the Wall Street Journal.
The newspaper writes that Target "will pay Hudson's Bay Co. C$1.825 billion for the leasehold interests in up to 220 sites operated by Zellers, a discount retailer owned by Hudson's Bay. Target will convert 100 to 150 of these stores into Target stores in 2013 and 2014."
More U.S. retailers are expected to follow Target€™s lead: TJX Cos. has indicated plans to open it Marshalls chain in Canada next spring, and Kohl's Corp. and J. Crew are reportedly considering a move into Canada.
Walmart got the jump on Canada€™s retail landscape in 1994, which led to the "demise of K-Mart Canada." Walmart operates 323 stores and 119 superstores in Canada.
Much like the United States, the rivalry between Walmart and Target isn€™t expected to stop at the border. Strapagiel told the Journal that he expects this competitive dynamic to be replicated in Canada.
In an email, Walmart Canada spokesman Andrew Pelletier told the Journal that the retailer welcomes the competition. "As Canada's leader on price and assortment we will continue to focus on exceeding customer expectations at our growing network of 323 Walmart stores across Canada," he said.