Target Canada fiasco expands into Minnesota

With all of its stores closed in Canada, the company has now begun firing local employees.

Jasper Johnson

Following its fiasco in Canada, Target has decided to lay off 550 employees from its Minneapolis offices. The firings did not come as a surprise. Target’s operations in Canada were a total failure and were nowhere near profitable.

Target’s expansion into Canada was not well-received by Canadian consumers. Prior to the expansion, Target had high hopes for its Canadian operations. Roughly 90 percent of Canadians live within an hour’s drive of the United States border. Many of them cross the border to do their shopping, often at discount stores like Target. Target had expected that Canadians would be receptive to stores closer to home.

Canadian consumers were disappointed with Canadian incarnation of the much-loved Target. The prices were too high for a discount retailer, the merchandise was different and there were also the infamous inventory flow issues. Photos of barren shelves and massive, empty grocery sections circulated on social media.

Though Target Canada was a failure, Target did a good job of recognizing it as such. We should applaud the company for getting out of Canada so quickly. Though the job losses hurt employees, continuing to waste money in Canada would have been even more detrimental in the long run.

However, the Minneapolis firings weren’t fair to the company’s employees. Target put many good people on its Canada project. Its failure had nothing to do with many of the workers who were fired.

Target is offering severance packages to its employees based on their years of service, and all employees will remain on payroll for at least 60 days. This will hopefully make the transition easier for the Minneapolis Target employees. Target is offering its Canadian employees a similar package, which includes 16 weeks of termination pay.

The firings may seem jarring for Minneapolis residents, but just because a business works in one region doesn’t mean it will work in another. In 2013, United Kingdom-based Tesco attempted to expand into the U.S. and failed. As a result, it had to withdraw from the market in a similar fashion to Target’s withdrawal from Canada. Regional failures are just that: regional failures. Tesco still continues to be successful, considering the fact one in every eight pounds spent in the United Kingdom goes to the company.

Moving forward, Target needs to learn from this mistake. They need to avoid being overconfident and moving forward too quickly. At this point, they should just rest on their laurels and stick to the tried and true U.S. markets.

It’s a shame that Target’s expansion into Canada ended in failure, but I commend Target for getting out of Canada when it did.

Had it failed to do so, the ramifications for employees here in Minneapolis could have been much worse than they currently are. Target’s termination pay programs for employees are still very generous. Despite all the pitfalls of Canada, Target is ending this incident on the right note.