Target launch leaves retailers wary of coming to Canada

At the beginning of last year, Canada was seen as a gold mine of opportunity for foreign retailers. Target's hotlyanticipated launch was just months away, and retailers such asNordstrom were announcing expansions north of the border.

Now, Target's launch is widely seen as a flop, Nordstrom's first store has yet to open, and few other big-name retailers are on the horizon.

Retailers are growing wary of expanding into Canada, according to a new report by commercial real estate companyCBRE, with fewer new entrants in 2013.

Falling in the rankings

According to theCBREreport, Canada ranked sixth in the world in 2012 for the most foreign retailers setting up shop, and Toronto was one of the 20 cities most-targeted by high-end stores.

Last year,"Canada no longer ranked among the countries attracting the most new retailers and did not have a city ranked among the top 20 most targeted markets,"CBREsaid in a release.

The report analyzes the operations of 334 leading retailers in 61 countries. CBRE saysCanada still has a solid foothold, with 35 per cent of global retailers having a Canadian presence, enough to rank 20th.

Canadian retailers adapt

Canadian retailershave also adapted in the past few years in an effort to compete with new entrants like Target.

Target has opened over 100 stores since first launching in Canada last March,but hasn't been warmly received by shoppers. In a conference call with reporters last month, interim CEO John Mulligan said, "We have not lived up to our potential or expectations over the last year and a half."

In addition to battling a perception of high prices compared with those in U.S. stores, Target has had numerous supply chain problems, withstores havinga hard time getting the latest merchandise onto shelves quickly and in a reliable manner.

Target's rocky launch has put a chill on other retailers, withNordstromdelayingthe launch of its discount chain Rack to 2017. Itonly plans to openfiveflagship stores before then.