Retail competition in Canada heats up as Nordstrom expands north
Josh Dehaas, CTVNews.ca
Published Saturday, September 20, 2014 10:00PM EDT
Thousands of people stampeded through Calgary’s newest department store on Friday, as Nordstrom opened its first Canadian location.
The Seattle-based retailer’s entry into the Canadian market is the latest reminder that retailers face ever-increasing competition from U.S. brands expanding northward -- and it’s not clear if there are enough customers for everyone.
Some of the big changes hitting the Canadian retail market:
- Nordstrom, a luxury chain, is opening five stores in Toronto, Vancouver and Ottawa, in addition to its location in Calgary’s Chinook Centre.
- Saks Fifth Avenue, a luxury retailer owned by Hudson’s Bay, will open two locations in 2016.
- One location of the discount chain Saks Fifth Avenue Off 5th will open around the same time.
- Holt Renfrew, a Canadian upscale retailer, will close two stores, in Quebec City and Ottawa, and spend $300 million on renovating remaining locations.
All of those retailers will be trying to learn from the mistakes made by Target, the Minneapolis-based retailer that stumbled when it opened more than 124 stores across Canada last year. Customers complained that stores regularly ran out of stock and did not offer the same prices as U.S. locations.
That botched Canadian launch contributed to a $1-billion loss over four quarters. Mark Schindele, president of Target Canada, told The Canadian Press in August that the company was too ambitious. "If I could build a time machine and go back, we would've liked to have a slower approach.”
Erik Nordstrom, who heads online operations for Nordstrom, said Friday from Calgary that the company has been paying attention to Canadians. “What we heard mostly from customers here: ‘yeah, we'd be excited about Nordstrom here but it needs to be a great Nordstrom. Don't bring us Nordstrom lite.’”
Canadian stores will be tailored to the local markets. For example, cowboy boots are front and centre in Calgary.
Mohammed El Hazzouri, a retail analyst, said that all retailers operating in Canada will all need to try harder.
“We can expect some of these retailers to fail if they don't live up to the competition,” El Hazzouri said.
With a report by CTV’s Janet Dirks