Target Canada President Explains Why No Price Parity With U.S.

This article was last updated on April 16, 2022

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The president of Target Canada, Tony Fisher, dealt with a major itch this Tuesday as some of the sticker shock gripping consumers expected the retailers’ prices to be equivalent to its U.S. stores when it opened outlets across Canada this month. The spicy issue of Canada-vs.-U.S. retail pricing was also a point of discussion at a Senate committee report this year, and was also resurfaced later in last week’s federal budget as the government declared to decrease tariffs on hockey gear and baby clothing.

Fisher informed a Canadian Club of Toronto, luncheon, that Target, which has inaugurated 20 stores in Ontario since the start of this month, was well aware that it is opening stores which will have to be competitive with other retailers operating in the Canadian market, whether be U.S.- or Canadian-owned. He explained that “we built this business model to be successful in Canada,” including a detailed business analysis of what it takes to compete in the local marketplace alongside other large retailers — most notably, key U.S. rival Walmart.

Fisher pointed out that “there has been a lot of widely publicized discussion around why the retail prices are not on parity.” A study of BMO revealed that Canadian retail prices are almost 14% higher than in the U.S., explaining that “transportation costs are higher, distribution costs are higher, fuel costs are higher, wage rates vary across the country, the tax rates are different, cost of goods are different, the duties — I think the scale we have here in Canada is quite different from the incredibly different, densely populated U.S. marketplace.”