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BOSTON — Kantar Retail LLC analysts’ first take on the news that Target Corp. was pulling out of Canada after two disastrous years identified benefits and costs in the retailer’s decision.
Kantar Retail LLC analysts’ first take on the news that Target Corp. was pulling out of Canada after two disastrous years identified benefits and costs in the retailer’s decision.
Under the heading “Big picture positives,” the management consultancy’s analysts noted:
• Leadership is leading: "Execs are willing to make hard choices for the long-term benefit of the business," the analysts said. "Target’s difficult decision was coldly based on the facts, without aspirational slanting, and is a strong sign of a positive turnaround."
• Stanching the Canadian bleed: "While it comes with a hefty $5.4 billion write-off for this year, Target will be free of its day-to-day Canadian responsibilities," the analysts said. "The U.S. segment and Target’s vendors will no longer have to offset these operating losses."
Under the heading "Big picture costs," Kantar identified:
• International expansion bust: "Any future expansion will be taken with a huge grain of salt among investors, suppliers and shoppers."
• Loss of large, untapped market for growth: "Its [Canada] exit closes off a relatively untapped shopper base. Though Target’s continued entry into urban U.S. markets may alleviate some of this loss, the retailer has significantly less runway to growth in its home country because of an already high saturation."
