Target unveils plan to rescue Canada operations

Target
Shoppers arrive at a Target store in Los Angeles on Thursday, Dec. 19, 2013.
Damian Dovarganes / AP, File

With business languishing and losses mounting, Target Corp. on Wednesday launched a sweeping plan to resurrect its Canadian operations, vowing to match competitor prices and keep store shelves stocked.

The new effort came just a day after new CEO Brian Cornell's first day at work, a sign of the urgency executives feel to get Canada on track.

The Minneapolis-based retail giant's lost nearly $1 billion from its push into Canada, which crippled profits and helped force out former chief executive Gregg Steinhafel.

"We've been listening to our guests and taking a hard look at where we need to improve," Target Canada President Mark Schindele said in a statement. "We've uncovered the root cause of some of our challenges and are focused on three main areas: improving in-stocks, sharpening our pricing strategy and enhancing our merchandise assortment."

Among its efforts, Target said it signed Canadian designer Sarah Richardson to create a home decor line set to be in stores in February.

Target Canada also said it would match prices on any local competitor's weekly as well as the prices from online Canadian units of Amazon, Walmart, Best Buy, Sears and other retailers The company on Wednesday also said it's taking steps to boost in-store inventory, including adjusting delivery schedules so stores get merchandise more frequently.

Target's been stung by criticism that its Canadian stores show a poor selection and lots of empty shelves.

Among the Canadian shoppers who recently visited Target recently is retail consultant John Williams. He went to buy jeans at a store in suburban Toronto, but an employee told him the men's fitting room was a floor below--in the women's clothing department.

Williams said the store was empty, and he didn't feel like going downstairs to try the jeans on.

"What I did was I just changed right there in the middle of the jeans section, and I could do it because there were no customers around anyway," he said.

Target officials hope the new price matching policy will help.

To get one, customers no longer have to bring in a printed flyer. They can use popular smartphone shopping apps and ask for a price match at the checkout instead of waiting in a separate customer service line.

Williams said price matching and keeping shelves full are basic things Target should have been doing from day one.

"If you're a store manager, a group manager, a vice president of merchandising or something like that and you walk through a store with empty shelves," he said, "don't you say 'well let's fill it up with something?' And let's pretend that we're not as incompetent as we are."

It's not too late for Target to win over Canadian shoppers, University of Toronto marketing professor David Soberman said.

"I don't think the feelings people have toward these stores are that visceral," he said. "People go into the store. They have expectations. If they don't like it, they don't shop there. They don't go around being angry with Target for the next three months."

The company is expected to release its latest quarterly earnings Aug. 20. Last week, Target warned investors to brace for more losses.

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