For the most part, Target's brand lineup in Canada will look a lot like what shoppers find in America: bedding and rugs from Nate Berkus, cosmetics from Sonia Kashuk, sweatshirts from snowboarder Shaun White.
Only thing is, those brands might cost more when stores open in March.
The Minneapolis retailer announced its exclusive partnerships for its Canadian stores on Friday, which will feature many of the same names that earned the retailer its "cheap chic" image in the United States. But already, many analysts and observers say shoppers will pay more because American retailers tend to charge higher prices across the border.
"Due to some complexities in the Canadian market, some products will be priced higher, some will remain the same and there will also be new products of great value that will be unique to Canada," Target Canada spokeswoman Donna Egan said in an e-mailed statement Friday. "But rest assured our first priority will always be to be competitively priced in the Canadian market."
Target plans to open 124 stores across Canada this year, the first time the company has expanded beyond the United States. Faced with slowing growth in its core American market, Target hopes to boost its sales in a country with a steady economy and a consumer base that has not seen much competition from outside retailers.
A good number of Canadians already cross the border to shop at Target. But while Target officials say those consumers can expect a similar experience in Canada, they shouldn't expect similar prices. Given Target's relatively small footprint in Canada, the retailer may not yet have the size and efficiency to offer similar prices as in America.
Pricing is a balancing act
Doug Stephens, a Toronto-based retail consultant, said it's too early to tell how Target's pricing strategy will impact its performance. Target stores close to the border might suffer the most if Canadian consumers choose to shop at a Target in the United States rather than pay higher prices in their country, Stephens said.
But most consumers probably won't mind as long as Target offers value, good customer service, and a compelling assortment of products, he said.
That's exactly what Target officials say they plan to do.
"Target's 'Expect More/Pay Less' brand promise is at the heart of everything we do," Egan said. "The Expect More piece speaks to quality and innovation, while the Pay Less side is about offering our guests exceptional value. It's offering a Prabal sweater at the fraction of the cost of a boutique store, a resealable Archer Farms potato chip bag ... or the expertise of a professional makeup artist like Sonia Kashuk and making them accessible to all."
For instance, to further woo its new north-of-the-border clientele, Target will sell a limited edition collection of apparel from Roots Outfitters, which dressed both the U.S. and Canadian Olympic teams.
"Roots is a nice, respectful nod to the Canadian marketplace," Stephens said.
Thomas Lee • 612-673-4113