Target to test Wal-Mart's mettle in Canada

Wed Apr 11, 2012 1:04pm EDT
 
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By Allison Martell and Jessica Wohl

TORONTO/CHICAGO (Reuters) - With Target Corp (TGT.N: Quote) opening its doors in Canada next spring, Wal-Mart Stores Inc (WMT.N: Quote) is likely to do what it does best - slash prices - to protect its share of a multibillion-dollar market it has dominated for nearly two decades.

The world's largest retailer has already taken the offensive, putting into motion an aggressive expansion plan of its own before Target's northern incursion.

Wal-Mart is holding an investor meeting in Toronto on Wednesday night and Thursday, and it is expected to trumpet its plan to fend off the challenge by the No. 2 U.S. discounter.

A beefed-up Canadian presence may not be enough, analysts say. Wal-Mart may also need to take a page from its time-tested U.S. playbook by cutting costs and prices.

"Target has the fun factor," said Natalie Berg, director of global research at Planet Retail. "They will come in and wow Canadian shoppers. Walmart will have no choice but to become even fiercer on price."

BRAND RECOGNITION

In a recent survey of 1,500 consumers in major Canadian markets, 61 percent said they were somewhat or very interested in shopping at Target.

"Preliminary results say that 73 percent of consumers surveyed expect that Walmart will lose sales due to Target," said Ed Strapagiel, executive vice president at KubasPrimedia, the Toronto market research firm that conducted the survey.   Continued...