New Mass Retailers Coming to Canada
Mass Retail Industry May 16, 2011
Things for Them or You to Consider
As many of you may know, Canada has recently been praised in the news and on the internet as a country that has a very sound banking system, has a good legal system, a lot of resources and a relatively stable government (though we seem quite election happy if you ask me!). All of these factors helped Canada to get through the recession relatively unscathed as compared to our friends in the U.S., most European countries and indeed much of the world.
With this economic success, there seems to be a sudden wealth of expansion happening in the retail sector. Whether it is a coincidence or not is subject to debate, but the reality is right before our eyes. Many American companies have realized that Canada is a solid opportunity for expansion and they're going for it..... and why not. With all these things going for it and a population similar to that of California, it is a great country to grow your sales in.
Some of the stores that are expanding into Canada are:
a) Lowe's has opened 5 new stores
b) 3 new Marshall's stores have recently opened up and there is more growth planned
c) Target has been making moves to come to Canada within the next two years
d) Dick's Sporting Goods are on their way
e) Even WalMart is expanding their retail offering with WalMart.ca coming on line soon
With this growth happening, I'm certain that more retailers in the US may be thinking of coming up here. If you are looking to expand and grow your sales in Canada, here are a few tips to consider from the logistics side of things:
1) Size - Geography is the first thing to consider when dealing in Canada. As the 2nd largest country in the world from a geographic standpoint, you need to consider how to position stock. The largest population centre is Ontario and with Quebec right next door, this is a good place to start. British Columbia and Alberta also have large population centres that will need to be serviced. If you're looking at having two DC's, Vancouver and Toronto make the most sense to me. For a third, I'd look at Calgary and then Montreal.
2) Location of Population Centres - remember that 80% of the Canadian population is located within 200 miles of the US border as well
3) Quebec - as mentioned, Quebec has a large population base and is a good place to do business. However, there are advertising and packaging restrictions that you'll need to consider as French is the dominant language there and this needs to be reflected on your product
4) Cost of Doing Business - there are savings to be had by landing product in Canada as opposed to landing in the U.S. and then shipping up to Canada. Some of the areas that will benefit are duty savings, transport costs and time to market. However, the cost of doing business is higher as our minimum wage, social systems and real estate costs in major centres are fairly high.
5) From a planning standpoint, a general rule of thumb is targeting 10% of your American Sales when benchmarking your potential Canadian Sales
Should you be interested in coming to Canada to sell your products, you will want to work with a logistics company that specializes in dealing with mass retailers. McKenna Logistics Centres has the infrastructure to ship almost anywhere in Canada within 24 hours and we certainly have the experience with mass retailers having been in the business for over 60 years! From my perspective, I say welcome to our friends from down south.... competition makes us all stronger and keeps our economy thriving.