By Lime Blake
U.S. discount retailer Target opened stores in locations across western Ontario communities of Guelph, Fergus, and Milton on Tuesday as part of consumer trial runs before the major chain spreads across 10 of Canada’s provinces.
Target is expected to open 124 locations to mostly replace previous Canuck-owned discount chain Zellers, which is still in the process of closing all of its stores.
Ambarish Chandra, a Toronto-based cross-border sales and consumer analyst, told Humber News that history shows when U.S. stores come over the border, it is only to be expected that there will be a rise in pricing for Canadians, compared to southern branches.
“Part of that is affecting the fact that there are higher costs in Canada, but part of that is also affecting the fact that [Target] face less competition in Canada,” Chandra said. “And so they can get away with charging higher prices.”
Lisa Gibson, a Target spokesperson, told the CBC that within certain instances, prices in Canada will be totally parallel with those of U.S. Target stores. However, she said the overall goal for Target is to maintain a competitive face in the marketplace.
In regards to Target replacing Zellers locations, consumer and industry analyst Brian Yarbrough told @HumberNews reporter William Kee that people must remember to keep things in perspective, as Zellers is currently “doing several-billion dollars in sales” at the time of the business’s process to shut down.
Chandra said he thinks it is unlikely that the opening of Target locations in Canada will affect cross-border consumerism as the extent people have gone in the past to shop across the border due to better sales have little effect on Target sales in Canada. He said prices will continue to be better in the States.
“I think when you look at it from Target’s aspect, they don’t need to worry about what their prices are in the U.S.,” Yarbrough told @HumberNews.
“They need to make sure they’re competitive with other retailers in Canada, and that’s the key, and that’s where their prices will be,” he said.
Listen to William Kee’s interview here:
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