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One of the things Target Corp. appears to have taught the world is that Canadians aren't Americans.

We have brothers, sisters, aunts, uncles, parents, children and friends in the United States. We shop there, we visit there, and many of us spend our frigid winters there. We trade with the Americans, and in many ways they're our best friends.

But we refer to soda as pop, and candy bars as chocolate bars. And, apparently, we shop differently.

"At my time here at Target, I've developed a better understanding of just how deeply our entry disappointed Canadian shoppers," Brian Cornell, the relatively new chief executive officer of Target, said this week as he announced the celebrated retailer's retreat back across the border.

As The Globe and Mail's Marina Strauss reports, the retailer, which came to Canada amid much fanfare just about two years ago, announced plans to abandon its first expansion outside the United States, closing more than 130 stores and throwing 17,600 people out of work, not seeing its way to a profitable operation until 2021.

(As one person put it on Twitter, "the War of 1812 lasted longer than Target did in Canada.")

The reasons for its Canadian demise, after an investment of $7-billion, are well documented by Ms. Strauss: Complaints of empty shelves and high prices and some outlets that looked more like the old Zellers stores they took over.

I have no idea if Target thought Canadian shoppers would be just like their American cousins, but some observers think so.

Target "didn't quite appreciate Canadian shoppers are significantly different from U.S. consumers," MarketWatch quoted one analyst as saying.

"There's a misconception among Americans that Canadians are just like Americans."

(I found this story, by the way, from this MarketWatch tweet: "Target went to Canada and learned that Canada is not, in fact, the 51st state."

Apparently, we like to jump from shop to shop, as opposed to a one-stop outing.

According to Ms. Strauss, the we-aren't-Americans bit is a factor, but it's far more complex. Many observers see it as a case of too much too fast, and not quite gauging its competitors in an ultra-heated environment, as Ms. Strauss writes.

Also, if truth be told, I was disappointed because the Target stores here weren't more like the Target stores there. And other Canadians felt the same way.

Here's what analysts say:

"Bonne Nuit Canada: too hard, too expensive, and too long." JPMorgan Chase & Co.

"While the U.S. market is relatively a more competitive market than Canada, Canada is a relatively closed market compared to the U.S. Market share does not change hands quickly in Canada, so it's not surprising that Target would need a significant length of time to gain traction after plunking themselves in the country in sub-optimal locations relative to its peers. Gaining traction becomes even more difficult when faced with supply chain issues and misplaced consumer expectations for prices and in-store experience." Credit Suisse

"Mr. Cornell had no allegiance to TGT's Canadian business, and did what was necessary to make TGT a better company. So now TGT is a domestic business that will focus on core U.S. We had anticipated TGT Canada would improve performance in the long run due to brand affinity and a better understanding of local markets, but losses have continued to mount." Janney Montgomery Scott

"Goodbye Canada, we hardly knew you ... The good news is that Target will stop throwing good money after bad, and investors have certainty that the downside of Canada is contained." William Blair & Co.

"Target Canada will continue to operate its stores while liquidating inventory, so the near-term impact will be a flood of discounted goods on the market; the company expects another $275-million in losses in F2015. Though Target's results have been massively disappointing, 2014 sales were still roughly $2-billion, and 133 stores is material. Beyond the next few months however, these sales will be up for grabs, and will provide a nice tailwind for Canadian retailers." CIBC World Markets

"Getting out of the cold, more sunshine ahead?" UBS

"In our view, Target Canada's failure is not simply a reflection of a weak retailing environment in Canada. This new-country expansion was of an unprecedented scale by any retailer (comparable only to Wal-Mart's entry to Canada in 1994 by taking over 122 former Woolco stores; even Wal-Mart hit many bumps in its early years). In hindsight, we believe it large size and complexity substantially reduced the odds of it achieving success." TD Securities

"Note that non-auto and gas retail sales in Canada have almost precisely kept pace with those in the U.S. since Target opened its first Canadian store in March, 2013. Now, we're not going to pretend that consumer spending fundamentals are nearly as good in Canada as they are in the U.S. right now, but they're not all bad." BMO Nesbitt Burns

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 25/04/24 4:00pm EDT.

SymbolName% changeLast
AAPL-Q
Apple Inc
+0.51%169.89
CADUSD-FX
Canadian Dollar/U.S. Dollar
+0.36%0.73239
CM-N
Canadian Imperial Bank of Commerce
-0.29%47.4
CM-T
Canadian Imperial Bank of Commerce
-0.61%64.76
GM-N
General Motors Company
+1.2%45.62
TGT-N
Target Corp
-0.54%164.44
WMT-N
Walmart Inc
+0.57%60.21

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