Buy one retailer, get one headache for free
High on the list of things that can go wrong with Target’s entry into Canada is Quebec. The large province accounts for about 23% of the nation’s nearly 35 million residents, and because French is the official language, it means Target decision to acquire Zeller’s leases means it is essentially entering two international markets simultaneously.
According to Chris Whitaker, partner with the Toronto-based Explorer Shopper Solutions research consultancy, it’s not just the French language that makes Quebecers unique. They have more in common with European culture than North America and enjoy being culturally unique which means, “Retailers can’t take a U.S. strategy and drop it in Quebec or even a Canadian strategy and expect it to work,” Whitaker said.
For example, while shopper behavior in other parts of Canada have made Loblaw’s President’s Choice the nation’s leading brand, Quebecers tend to be more brand loyal and they are also more impulsive in their behavior than other Canadians. The province also tends to be governed in a more socialist fashion than elsewhere. As an example, the income tax rate for a single person earning $40,000 annually is 26.6%, the highest in the country, and day care only costs $7 a day compared with Alberta where the tax rate is 21.1% and day care costs $1,400 a month.
Quebecers are fiercely independent and determined to stay that way, which doesn’t make it easy for retailers to serve the market. The province is driven to remaining culturally unique and aggressively protects its cultural roots through strong government intervention, legislation and regulations, according to Whitaker.