Fortunes and flops: Canada and American retail chains
Lowe’s, the big North Carolina-based home improvement warehouse chain recently announced it was taking over RONA, the large Quebec-based home improvement chain which has warehouse stores and small neighborhood hardware franchises across Canada. Lowe’s already has stores across Canada, but none in Quebec. The RONA takeover will change that. Public reaction to the news was typical of when an American company takes over a Canadian one. Comments on news websites warned jobs would be lost, Canadians will no longer own anything, the Americans are out to “siphon” money out of our economy, and it’s a “dark day for Canada.”
The truth is, American retailers have been in Canada for decades, and there are even Canadian companies that have been quite successful in the United States. There have also been American failures in Canada, and vice-versa for Canadian firms in the United States.
In the hardware and home improvement business, Canadians still have plenty of homegrown options whether they’re building a basement rec room or need hooks on which to hang pictures. Home Hardware, based in Ontario, is a huge nationwide chain owned by its member dealers. The stores range from large warehouses with furniture and appliances, to small corner hardware stores. BMR is a Quebec-based chain of warehouse hardware and lumber stores with locations throughout eastern Canada. Canadian Tire is as much of a cultural staple in Canada as hockey and maple syrup when it comes to shopping for hardware, automotive supplies, or sporting goods.
Many Canadians are probably not even aware that some of the places they shop or eat at are American companies. Like many American kids, I grew up in small town Ontario with things ordered from the Sears catalogue. There’s a McDonald’s in almost every Canadian city and town, and for more than 20 years, Walmart has been the dominant discount retailer here, displacing chains like Kmart, which closed up in Canada 20 years ago, or Woolworth’s, which disappeared everywhere.
The biggest epic fail for an American retailer in Canada was Target. The big bright red store with the bullseye set up here in 2013, after it took over several stores from the now-defunct Zellers chain. The Target Corporation and the Canadian public completely messed it up. The stores were bright and clean but never had enough merchandise because of a poor supply of inventory. It was common to see only one of each product on a shelf or half-empty aisles. Canadian shoppers also expected Target in Canada to be just like Target in the United States. They were not pleased to discover prices were higher and there was less selection. Target Canada’s financial situation got bad and in January 2015, it declared bankruptcy and closed the last store in April. A Target was scheduled to open at Ottawa’s Bayshore Shopping Centre, but the bankruptcy happened before the new store even opened. Walmart recently took over the site. Shoppers in the Ottawa and Montreal regions now have to go to Watertown or Plattsburgh if they want to shop at Target.
Some Canadian retail and food chains have done extremely well in the United States, while others have flopped. Tim Hortons, started in 1964 by an NHL player who needed extra cash and a moonlighting cop named Ron Joyce, in Hamilton, Ontario, is a growing presence throughout the United States. There is one on Route 37 in Ogdensburg, NY, near the bridge to Canada. Giant Tiger, the very successful chain of discount stores headquartered in Ottawa, has burst beyond its Ontario and Quebec roots and now has 200 stores across Canada. However, Giant Tiger’s attempt south of the border wasn’t so successful. A store in Potsdam opened in 2004 but closed in 2009.
On the opposite end of the price scale from Giant Tiger, the Hudson’s Bay Company (HBC) is an example of a Canadian company that is extremely successful in the United States. Founded in England at the height of mercantilist imperialism in 1670 to engage in the fur trade in Canada, it is now headquartered in Toronto. Aside from falling into American hands from 2003 to 2012, and its early days headquartered in London, the HBC, known more recently as Hudson’s Bay, is solidly Canadian. It now owns the ritzy American Lord and Taylor and Saks Fifth Avenue chains, and recently opened a flagship Saks store in downtown Toronto.
The U.S. and Canadian economies are closely integrated. There has always been, and will continue to be, retail companies that set up shop in whichever of the two countries they border. In the competitive world of retail, businesses will come and go from each country at the mercy of cost and customer expectation. Customers don’t usually care who’s minding the store, as long as they get what they want.
That great Canadian outfit, Burger King, owns Tim Horton’s. And Woolworths is alive and kicking in England, and perhaps in Germany too still. The last Kmart in Canada I know of was in Cornwall, Ontario, closing around 1999.
The Burger King statement is partially correct. Burger King is part of Brazil-based 3G Capital. When Tim Horton’s was taken over by 3G, the head office was moved to Oakville Ontario due to low corporate tax incentives in Ontario. It is still a Canadian company. Tim Hortons was already based in Oakville before then too. Woolworths in Britain was a completely separate company from the American one, and had been for decades. The British company went out of business in 2009. Yet another completely separate Woolworth’s chain still exists in Australia as a grocery store, nothing like the old discount Woolworth’s and Woolco stores in the US and Canada. When I stated Woolworth’s “disappeared everywhere,” I meant the North American context.