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Target not likely to impact furniture stores, at least in the beginning, MMRR suggests PDF Print E-mail
Written by Michael J. Knell   

TORONTO (14 May 2012) - The arrival of Target on the Canadian retail scene isn't likely to have an immediate impact on furniture, home furnishings and appliance stores. But that could change once the high impact retailer opens its doors about ten months from now, the 2012 edition of the Major Market Retail Report (MMRR) suggests.

Authored by Ed Strapagiel, executive vice president of KubasPrimedia, the MMRR is an annually conducted study of Canadian retailers' competitive performance and focuses on the six major urban centres - Vancouver, Edmonton, Calgary, Toronto, Ottawa and Montreal (VECTOM). Included in its survey of some 1,500 Canadian consumers are 145 retailers covering 33 product categories.

Ever since Target acquired the rights to some 130 Zellers locations from Hudson's Bay Company almost two years ago, retailers across the spectrum have been attempting anticipate the impact on their own businesses and how it will change the Canadian consumers' mindset.

"It is likely to take sales away from incumbent retailers," Strapagiel says, particularly from consumers who have shopped Target on visits to the United States. Approximately 43% of those surveyed said they have shopped at Target in the past. Of those, 17% have shopped there in the past year.

The MMRR survey - which was conducted in February and March of this year - concluded 61% of Canadian consumers are ‘very' or ‘somewhat' interested in visiting a Target when the first ones open in March 2013. "This is considerably higher than the comparable 50% pre-launch interest levels for Wal-Mart recorded in 1994," Strapagiel said.

The two major Canadian retailers who stand to lose the most from Target's arrival are Sears Canada and Wal-Mart Canada. "Over 20% of survey respondents expect that both Sears and Wal-Mart will lose a ‘lot' of sales when Target opens in Canada, significantly higher than for other retailers. Another 50% feel that these two will lose at least ‘some' sales," Strapagiel said.

With only about 5% of survey respondents saying they will lose a ‘lot' of sales to Target, furniture and appliance stores near the bottom of the MMRR survey.

"Furniture and appliance stores - and hardware and home improvement outlets - are close to the bottom of the list and are seen as being relatively less vulnerable to Target," Strapagiel said.

"This, however, may be in part due to the mindset of the audience in this case, which is people who have shopped at Target in the United States," he continued, adding, "Large, big ticket items like sofas, fridges, power tools and kitchen sinks may not be priorities for cross-border shoppers and harder to conceal when going through customs on the way home."

However, Target is one of the largest furniture retailers in the United States and is a member of Furniture Today's Top 100. According to Target's web site in the U.S., its furniture assortment can be described as cash-and-carry, ready-to-assemble product including youth furniture, computer desks and entertainment centres. It also carries mattresses. The Montreal-based Dorel Industries is one of their largest suppliers.

Interestingly, two of Canada's largest furniture sellers - IKEA and Costco - are ranked least likely to be negatively impacted by Target's arrival.

For more information about the Major Market Retail Study, visit KubasPrimedia's web site at

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