Large retailers closing in Canada shows old consumer habits die hard
This trend proves customers’ preference for their favourite brands is the ultimate factor in a company’s longevity
Canada has seen a surprising trend of large American retailers closing their branches across the country. Out of all the reasons large retailers are failing in Canada, the main factor is that Canadians simply prefer pre-existing shopping giants that already meet their needs.
Nordstrom announced it will be closing all 13 stores nationwide and a liquidation sale began on March 21. Bed Bath & Beyond is in the process of closing its 54 stores and all 11 of its BuyBuy BABY locations. Even Target shut down their 133 stores back in April 2015, including three distribution centres and their headquarters in Mississauga, Ontario.
A shared consensus among some retail experts on the growing rate of failing American retailers was that businesses like Nordstrom, Bed Bath & Beyond, and Target experienced mass shutdowns due to being ill-prepared for Canada’s retail market.
The companies didn’t understand that Canadian customers’ needs vary across provinces, and they expanded too quickly when they could’ve started out smaller to properly build up their brands.
One point that sticks out to me the most is brand loyalty. It goes without saying that consumers stick with the businesses they’ve relied on for most of their lives. Having more places available for purchasers just feels redundant, given that consumer habits are just hard, if not impossible, to break.
If I need to buy groceries, I’ll most likely turn to Walmart or Shoppers Drug Mart out of habit and convenience. As a consumer, I don’t need another option like Target to buy essentials when there’s already businesses I’ve depended on in the past.
Same thing may go for families wanting to buy clothes for their kids. They can always visit the mall and shop at smaller outlets where they can find cheaper clothes rather than expensive designer apparel at Nordstrom.
Families could also acquire home furniture or décor at more familiar places like HomeSense or IKEA rather than at Bed Bath & Beyond. Plus, you can also eat at IKEA after shopping, which is always a good bonus for parents and children.
American retailers may also be experiencing closures due to operating costs in foreign markets, as explained by retail expert Gary Newbury.
“Things simply got significantly more expensive for US brands operating here sourcing products outside of Canada,” Newbury said.
However, don’t underestimate the power behind brand loyalty.
Amazon demonstrates how buying repeatedly from the same brands is shaped by customer perception and experience from pre-existing businesses, not just decent price tags. Although brand loyalty is an intuitive concept, it emphasizes the fact that preferring familiar stores over new ones remains central to consumer lifestyles. It’s not a customer behaviour that’s going away anytime soon.
Large retailers overall suffered blunders due to ambitious plans that many experts agree were poorly conceived in the first place. At least customers still have Nordstrom’s liquidation sale to look forward to — not.