U.S. Retailers Continue with Canadian Invasion

When upscale department store chain Nordstrom Inc. announced in September that it would open four locations in Canada beginning in the fall of 2014, it joined a growing list of U.S. retail chains that have crossed the border into the Canadian market.  Earlier this summer, retail giant Target announced that it would open at least 125 stores in Canada within the next two years.

With these announcements, Nordstrom and Target join a growing list of U.S. retailers making the move north.  Other retailers are already operating in Canada include:

J. Crew Ann Taylor
Tory Burch Kate Spade
Victoria’s Secret Brooks Brothers
Crate&Barrel Apple
Tesla Motors Lowe’s

While expanding to Canada might seem like a natural move for U.S. retailers, given our shared border and shared language, the move has been more problematic for some chains.  In the past, the New York Times notes, “the Canadian market was hard to crack for many companies.  The Canadian dollar was weak, costs were higher, and with limited real estate development, it was difficult to find space.”  In addition, some businesses learned the hard way that savvy Canadian consumers were not willing to pay higher prices in Canadian stores for identical products available at lower prices either in U.S. stores on online.

Now though, many of those obstacles have been eliminated.  The Canadian dollar is competitive – if not stronger – against its U.S. counterpart.  The Canadian economy is more robust than the comparatively stagnant U.S. economy, and the real estate market is much more inviting.

But perhaps the most enticing reason for U.S. retailers to expand to Canada?  Higher profits.  “Sales per square foot at Canadian malls were almost 50 percent higher in 2011 than sales per square foot in American mass,” the Times reported in citing a Colliers International Consulting survey.