With the news last week that Target is leaving the Canadian market (with billions of dollars in losses), many people are wondering what went wrong. According to Fortune Magazine, the biggest problem was that Canadian Target stores failed to replicate the American Target shopping experience. But Target isn’t the only retailer that blew international expansion. Here are some other international expansions that didn’t go as planned.
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Target – Canada
Target entered the Canadian market with more than a hundred stores just two years ago. After widespread consumer disappointment and massive losses, Target announced that it was closing all of its Canadian stores.
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Walmart – Germany
According to the Graziadio Business Review, Walmart expanded into Germany in 1988 with 88 stores. The company closed its doors in 2006 and took a $1 billion write-off. There were many reasons for the failure including tough competition, customer loyalty and cultural differences. Some shoppers thought the perky clerks were too flirty.
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Walmart – South Korea
Walmart's expansion into South Korea didn't go very well either. They opened 16 stores in 1988 and sold them off in 2006. Graziadio Business Review says the retailer failed to note the differences between the American and South Korean markets, including shelf height and the presentation of fresh fish.
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Carrefour – Thailand
Carrefour is one of the largest retailers in France (and the world), but it still had difficulties expanding into Asia. After a disappointing performance in Thailand, it shuttered all 31 of its stores in November 2010.
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Carrefour – Malaysia
In 2012, after disappointing earnings, Carrefour sold all of its Malaysian stores to the retailer Aeon Group. Since then, all the stores have been re-branded and Carrefour is but a memory.
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Carrefour – Russia
The company faced another failure in Russia where in gave up on two stores just four months after opening them.
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Carrefour – USA
It's a wonder that Carrefour tries expanding at all. It opened a couple of stores in the United States, but found that they were unable to get a toehold in the market. Both stores closed in 1994.
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Best Buy – China
Breaking into the Chinese market isn't easy, as the US electronic retailer Best Buy recently discovered. According to Graziadio Business Review, Best Buy's bright, clean stores just didn't work. Chinese buyers continued to flock to the small, cramped retailers they always had - mainly because the prices were cheaper.
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Best Buy – China
The result? The company closed all of their Best Buy branded stores in 2011. However, Best Buy did acquire the Jiangsu Five Star Appliance chain - allowing it to remain in the Chinese market.
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Tesco – USA
The British grocery store and retail chain Tesco has expanded into a number of markets over the years – but not all of them have been successful. The company tried to enter the United States under the banner 'Fresh and Easy' but, according to Graziadio Business Review, Tesco's timing was bad - right in the middle of the 2007 economic downturn. The BBC reported that the stores never made a profit and in 2013 Tesco announced it was leaving the US market at a cost of 1.2 billion pounds.
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Starbucks – Australia
At one time, Starbucks could do no wrong. But then the company started closing unprofitable stores when economic times got tough. In Australia, they closed the majority of their stores in 2008. The losses continued and in 2014 the remaining stores were sold off – although the new owners will retain the Starbucks branding and try to turn things around.
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Starbucks – Israel
In 2001, Starbucks opened several coffee shops in Israel. But facing stiff competition, the chain decided to close all of its locations in 2003.
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Marks & Spencer – Canada
The British retailer opened its first Canadian store in 1973. At its peak, Marks & Spencer had nearly 50 stores in Canada – but they still failed to resonate with Canadian shoppers in a big way. The company kept losing money and eventually gave up, closing all of its Canadian stores in 1999.
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Sears – Canada
Last October, the American retailer Sears sold off most of its stake in Sears Canada. The chain has 196 corporate stores in Canada, but for how long? Even before Sears Canada was sold off, the company made plans to close several stores and lay off hundreds of workers.