Target Canada Brand Check-up: 133 Stores, Empty Shelves
Target Canada opened its first stores in March 2013 and announced its exit less than two years later. In between, shoppers who knew the U.S. chain from cross-border trips found thin shelves and higher prices, and the parent company booked billions in losses. More than ten years on, we look at what went wrong and what it teaches any company entering a new market.
Key takeaways
- Target agreed to pay C$1.825 billion for the leases on up to 220 Zellers stores in 2011 and had 124 Canadian stores open by the end of 2013, its first year in the country.
- The supply chain could not keep up: an internal team estimated product data was accurate about 30% of the time, and stores ran short while distribution centres were full.
- Shoppers who knew the U.S. stores found higher prices and missing products, so, in our view, the brand’s reputation worked against it.
- Target announced its exit on January 15, 2015, closing 133 stores, putting about 17,600 people out of work and booking US$5.1 billion in pretax charges.
Download the full Target Canada Brand Check-up (PDF): vital signs, timeline, diagnosis, treatment and sources.
How Target entered Canada
In January 2011, Target agreed to pay C$1.825 billion for the leases on up to 220 Zellers stores. It planned to open 100 to 150 Canadian stores in 2013 and 2014 and to spend more than C$1 billion more on renovations. The deal gave Target a national footprint in one move. It also set a timetable that the rest of the business had to meet.
The first three stores opened in Ontario on March 5, 2013, as a soft launch, and Target planned 21 more openings that same month. By the end of its fiscal year it had 124 Canadian stores and three distribution centres. Canada went from no stores to a national chain in under a year.
Symptoms: thin shelves and full warehouses
Shoppers met bare shelves. Inside the company, much of the trouble traced back to data. An internal team estimated that product information in the new system was accurate about 30% of the time, against 98% to 99% in the U.S. As Canadian Business put it, “even as consumers encountered barely stocked stores, Target’s distribution centres were bursting with products.” In the fourth quarter of 2013, the Canadian gross margin rate was 4.4%, which Target said reflected continued efforts to clear excess inventory.
The second symptom was price. Many Canadians knew Target from cross-border trips, so they walked in with a clear picture of its value proposition. CBC News reported, citing business professor Barry Prentice, that shoppers expected the same type of store that drew them across the border and found higher prices and a lack of the products they wanted instead. In June 2014, Target Canada posted an apology video on YouTube. Senior corporate counsel Damien Liddle said in it, “Maybe we didn’t put our best foot forward when we entered into Canada.”
Diagnosis: scale before readiness
Target opened stores faster than its systems, suppliers and staff could support them, so errors were repeated at national scale. In fiscal 2013, its first year in Canada, the Canadian segment posted an operating loss (EBIT) of US$941 million on US$1.3 billion in sales. A sound go-to-market strategy sequences entry: prove the model in one region, fix what breaks, then expand. Target did it the other way round.
Leadership also changed in the middle of the recovery effort. In May 2014, five months after a data breach in which thieves took at least 40 million payment card numbers, Target’s board ousted chief executive Gregg Steinhafel. Target Canada’s president, Tony Fisher, left two weeks later. The new chief executive, Brian Cornell, reviewed the Canadian business and said Target was “unable to find a realistic scenario that would get Target Canada to profitability until at least 2021.”
The exit and what it cost
On January 15, 2015, Target announced it would leave, and Target Canada filed for protection under the Companies’ Creditors Arrangement Act. The chain had 133 stores and about 17,600 employees. Target proposed a C$70 million employee trust so nearly all staff would receive at least 16 weeks of pay. The last stores closed to the public on April 12, 2015. Target recorded US$5.1 billion in pretax impairment and other charges in the fourth quarter of 2014.
Target Corp. shares closed 1.8% higher that day, at US$75.67. Target Canada never had shares of its own, so the parent’s share price is the closest market record of the episode. On November 25, 2025, TGT closed at US$86.58.
What growing companies can learn
Entering a new market tests operations as much as marketing. Before you announce an opening date, be clear about which customers you are for, what they already expect from your name, and whether your supply chain can keep that promise every day. Open fewer locations, measure, fix, then grow. A known brand gives you awareness on day one. It also gives customers a standard to judge you by, and they will.
This check-up uses public information available on November 25, 2025. It is brand and marketing analysis, not investment advice.
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