Some analysts are telling Target to leave Canada, but the company isn’t listening. Instead, it’s doubling down on its push into Canadian retail with a price-matching guarantee.
Starting July 29, the retailer will match any grocery price in the country, the CBC reports.
Shoppers will be able to present a flyer from a grocery store anywhere in Canada and have the price matched at their local Target location. The price-match will also apply to online offers, but customers will have to print out the offer or display it on a mobile device.
That’s a step beyond Walmart’s price-match offer, which only matches prices available locally.
As some retail blogs have noted, many Target stores in Canada don’t carry a full complement of groceries, focusing principally on non-perishable goods.
All the same, Target’s arrival in Canada and its push into retail upended the grocery game last year, as competitors reorganized to cope with the new reality.
Loblaws’ purchase of Shoppers Drug Mart and Sobey’s purchase of Safeway supermarkets were seen as reactions to the new, more competitive grocery landscape.
Walmart announced a $500-million makeover earlier this year that includes the opening of 35 new super-centres as well as the inclusion of groceries in all its locations.
Target’s price-matching move is a sign that the Minneapolis-based retailer isn’t giving up on Canada, despite losing $1.5 billion since opening its first Canadians locations a year and a half ago.
The chain has been plagued with supply problems that have led to complaints about empty shelves at stores. Analysts at Credit Suisse recently suggested it “may be more prudent for Target to cut its losses and devote 100 per cent of its resources on the U.S.”
Target has officially rejected the idea of leaving Canada. And analysts at Barclays bank have suggested that Target could still turn things around in Canada, according to a report at the National Post.
Yet Barclays believes Target would be best served focusing on home goods and apparel, rather than groceries.
“We believe that a large opportunity remains in Canada for Target to take market share from existing competitors such as Sears Canada,” Barclays said.
But will Target's move actually help bring grocery prices down? The chain's arrival in Canada seemed to be doing that at first, but more recent inflation reports show food prices are starting to rise again. Overall food prices are up nearly three per cent over the past year, with meat taking the lead. Bacon is up 27 per cent and ground beef is up 15.4 per cent.
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