Target's Customer Satisfaction Drops In Canada

Target's (NYSE:TGT) customer satisfaction ratings are falling in Canada, barely six months after the the retailer crossed the border, the Globe and Mail reported.

A new customer-satisfaction survey by Forum Research put Target at the bottom of a list of seven major retailers that included other U.S. imports. Only 27 percent of those surveyed said they were "very satisfied" with Target, down from 32 percent in April. In contrast, 62 percent were very satisfied with Costco (NASDAQ:COST), the same as April, and Walmart's (NYSE:WMT) very-satisfied responses were at 40 percent, inching up from 39 percent in the April survey.

Also in the survey were Marshall's (35 percent very satisfied), Winners (35 percent), Sears (34 percent) and luxury retailer Holt Renfrew (32 percent). The margin of error for the poll was 3 percent, so all those retailers were essentially in a dead heat.

Target insists its poor showing isn't a surprise, saying its research shows new entrants into Canada see an increase in customer satisfaction over time as more stores open. Target is opening 124 Canadian stores in 2013, and is still ironing out training and logistics issues.

The chain is also fine tuning its ability to forecast demand at Canadian stores. At some store openings, shoppers essentially stripped grocery department shelves of some items. That's a good sign considering that Target needs grocery shoppers, who buy more frequently than apparel or home goods, but empty shelves are guaranteed to leave customers unhappy.

Along with inventory glitches, shoppers in the survey also said prices are higher at Target's stores in Canada than in the U.S. That's something Target can explain (import costs) but not really remedy, and it's a problem because most Canadians live near enough to the U.S. border that they can see the price difference for themselves.

For more:

- See this Globe and Mail story
- See this CBC News story

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