Target Canada's supply chain
Target Canada’s supply chain collapse during the retailer’s Canada expansion between 2011 and 2013 is a warning for global supply chain leaders on the downside of rushing into a new market without the necessary structure and planning.
It is ok to demand speed and push the supply chain, but the operations must be well established before that can happen successfully.
Unfortunately, that wasn’t the case for Target Canada’s supply chain, leading to empty shelves, frustrated customers, and ultimately a financial disaster.
So, how did it all go wrong?
Target Canada’s Supply Chain: A Lesson in Rushed Expansion
Target’s failed expansion into Canada began with an aggressive plan: 124 stores in under two years. The company entered the Canadian market with high hopes, relying on strong U.S. brand recognition.
In 2011, it bought the 220 leases from a struggling discount chain, Zellers, which promised instant presence nationwide. But it is one thing to have such presence. Taking advantage of it fully is another matter, especially when the supply chain is untested.
One thing was certain: Target had to build its supply chain from scratch. But this was the beginning of the crack in Target Canada’s foundation.
The company built three distribution centers, but these were not fully operational when the first Target Canada stores opened in March 2013 – three pilot stores in former Zellers locations in Ontario.
Because the Canadian market had unique requirements (bilingual French/English packaging, different currencies/taxes, local product regulations, etc.), Target could not simply clone its U.S. systems.
It needed a localized solution. However, the tight deadline meant the company rushed to set up complex logistics and technology. It implemented new IT systems, including SAP for inventory management and JDA software for forecasting and replenishment.
In hindsight, this urgency left critical systems and processes untested.
As one analyst noted, Canada’s geography and regulations required Target to establish a full domestic distribution network because the company couldn’t just ship stock from U.S. warehouses, which added significant complexity.
The Impact of The Rush
The company accelerated quickly. By April 2013, eager shoppers flooding the new stores were already encountering many empty shelves. Managers faced shipments piling up in trailers, and stockrooms filled with boxes they could not unload.
At the store level, shelves stayed empty. Products that did arrive often weren’t what customers wanted. Missing labels, mismatched data, and an unreliable inventory system caused confusion.
Technology failures meant registers froze, and items were scanned at the wrong price. In one instance, staff had to manually count items on the shelf because the automated system failed.
At the same time, warehouses overflowed with unsold stock. The supply chain mismanagement was so severe that while stores looked empty, the warehouses were bursting.
Unfortunately, Target’s leadership pushed ahead with store openings, ignoring these warning signs. They rolled out more locations while supply chain problems went unsolved.
The Cost of Target’s Canada Supply Chain Mismanagement
Ultimately, Target Canada’s supply chain disaster cost them $2.1 billion in losses.
All 133 stores (Target opened more in 2024, totaling 133) closed. Over 17,600 employees lost their jobs. Suppliers never got paid, and the brand’s reputation shattered overnight.
These are some of the other costs of this supply chain mismanagement:
1. Technology & Data Errors:
Registers crashed. Point-of-sale systems froze. Customers abandoned their carts. Product information was inconsistent, labels were missing, and item sizes did not match. The result was that systems failed to talk to each other.
2. Inventory Management Chaos:
Target Canada struggled to get the right products to the right place at the right time. The result: popular items ran out, unwanted items stayed on shelves, and shoppers found empty aisles where they expected deals.
3. Distribution Center Bottlenecks:
The distribution centers (DCs) were not operationally ready to support the rapid store opening. Trucks lined up for days. Workers could not move goods fast enough, and overflowing stock filled rented trailers without tracking.
4. Demand Forecasting Errors:
Sales projections relied on guesswork. There was no local data. Supply chains ordered too much or too little, never the right mix.
Read more: Dollar General’s inventory overstocking mistake that cost millions.
Lessons Global Supply Chains Can Pick From Target Canada’s Failed Expansion
Entering new markets can be exciting. However, like Target Canada’s expansion woes, it comes with some risks. How you manage them will determine your success.
Target Canada’s supply chain story shows what can go wrong without preparation. So here are some key lessons:
1. Build Supply Chain Readiness Before Launch
A supply chain that can’t keep up with demand will fail every time. To build resilience, ensure the following:
- Train staff on local processes and systems before stores open.
- Test all systems, from warehouse management to point-of-sale.
- Confirm that trucks can unload on time and that goods move to the right shelf.
- Validate product data. Ensure every item has correct labels, sizes, and case packs.
2. Forecast Demand with Local Data
A single product shortage can drive customers to competitors. This is why sales forecasts must rely on real numbers, not guesses.
- Collect data on product popularity, prices, and sales trends.
- Run pilot stores or small-scale launches to learn local buying habits.
- Adjust supply chain volumes based on real sales, not boardroom optimism.
3. Adapt to Local Markets
Target Canada failed to account for bilingual labeling laws and local packaging standards.
- Research local regulations.
- Train teams on tax and customs rules.
- Work with vendors to meet packaging, labeling, and quality standards.
Meeting local requirements builds trust with customers and regulators.
4. Roll Out in Phases
Target’s 133-store launch in one year was too fast, so problems multiplied with every new store.
- Start small. Fix issues.
- Scale after systems prove reliable.
- Grow at a pace that matches supply chain capacity.
Ultimately, it is important to avoid over-promising and under-delivering.
5. Empower Local Leaders
Target Canada’s supply chain leadership poorly managed international supply chain planning.
- Appoint leaders who know the local market.
- Give them the power to make decisions on the ground.
- Encourage staff to report problems quickly and solve them before they spread.
A culture of transparency prevents small issues from growing into crises.
Read more: How Massmart’s supply chain survived South Africa’s 2021 unrest.
Applying the Lessons to African Supply Chains
Imagine a new grocery chain opening in Nairobi, Lagos, or Accra. Without a reliable supply chain, shelves will stay empty, and customers will leave. Even loyal shoppers can’t buy what’s not there.
African markets need supply chains that can handle:
- Long customs waits.
- Local product preferences.
- Tight budgets that demand efficiency.
- Poor infrastructure and unreliable roads.
1. Start with data
Understand your customers. What do they buy? When do they shop? How much do they spend?
2. Use technology
But train your teams well. A new system that staff can’t use will fail.
3. Invest in warehouses With Room to Grow.
Create supply routes that adapt to bad weather or road delays.
4. Keep an Eye on Vendors.
Make sure they understand local labeling and packaging laws. Work with them to deliver on time.
Most importantly, expand at the right speed. A phased rollout lets you test systems, fix mistakes, and build trust.
Read more: Unilever Nigeria’s local sourcing strategy that beat forex challenges.
Wrap Up
Target Canada’s failed expansion shows how supply chain mismanagement can ruin a brand. The lesson for African supply chain leaders is simple: plan carefully, build strong supply chains, and never rush growth.
A supply chain that works today keeps customers happy tomorrow. A broken one destroys trust and kills business. The time to build strong supply chains is before you open new stores, not after. Learn from Target Canada’s mistakes and avoid your own.
Obinabo Tochukwu Tabansi is a supply chain digital writer & ghostwriter helping professionals and business owners across Africa explore various strategies that work and learn from the success and failures of various supply chains across the globe. He also ghostwrites social content for logistics & supply chain businesses
