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Canadian Push 9-1-11


2011 Archives

Jen Drake, CFI, Director of Resource Protection, West 49 Inc., on "Pricing Strategies"

Canadian consumers will be very critical of your pricing strategies. If you are completely new to the Canadian marketplace, but have been available to us via e-commerce, be aware that Canadian customers will not take kindly to drastic price increases just to have the privilege of purchasing your products at their local mall. They won't hesitate to do price comparisons. I've seen reports that Canadian prices are averaging approximately 12 to 25% higher than those same products in the US. You would think that the surge in value of the Canadian dollar should reduce cross-border pricing. For example, US Retailer J. Crew launched its first Canadian store
this past month and was in the news over the sticker shock customers experienced there.

The Canadians have complained that U.S. retailers pricing strategy's are higher
which is evidenced by J Crew's recent "backing down in the face of a backlash from customers angry about higher prices at its newly-opened Canadian store and website."  Last week, J Crew announced it is "reversing its decision to charge its e-commerce customers in Canada for duties, which raised the final price to as much as 50 percent above those at its U.S. stores and on its U.S. website."   However, J Crew will continue to charge about 15% more in Canada than at its U.S. outlets and websites.   Their CEO remarked, after hearing quick and angry responses from their long-time customers, " We have to deal with what we didn't do right."  "A lot of our loyal customers got hugely upset about it," Mr. Drexler said. "I would have, too.  If it happened to me personally, I'd feel the same way.  The lesson I learned: We were doing a lot to get the store opened. I imagine we should have done it better. We didn't follow, perhaps, the details as well as we should have."

J. Crew isn't alone among retailers to feel consumers' wrath about Canadian prices that are higher than those in the U.S.  Last spring, a study found that Canadians paid 20% more than Americans, while two years ago it was less than 7%.  And the higher differential this year came despite the value of the loonie soaring above the U.S. dollar.   The Canada-U.S. price gap reflects different dynamics in each of the markets.  The U.S. retail landscape is hugely competitive, resulting in prices that are frequently lower than in the rest of the world, according to Douglas Porter, Deputy Chief Economist at Bank of Montreal, which conducted last spring's price survey.

Diane Brisebois, President of the Retail Council of Canada, has estimated that North American and global producers charge Canadian retailers 12% to 25% more than they do U.S. merchants. 

The Target Push Begins!

Target Canada is shopping around for hundreds of new employees and says it will eventually be hiring thousands of people.
  The company is now hiring for positions at its headquarters in Mississauga, Ont.  Target says it is looking for about 100 staff by the end of the year, and more than 500 by the time it officially opens in 2013.  The retailer also plans to open 125 to 135 Target stores beginning in 2013 with each store expected to employ 150 to 200 staff.|

Target says it is looking to hire everyone from district team leaders responsible for overseeing groups of stores across Canada right down to the store floor.  Target signed a deal earlier this year to take over up to 220 Zellers locations from Hudson's Bay Co. for more than $1.8 billion.  This means LP jobs as well!  
(Source 680

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