When we wrote our story about U.S. retailers and developers trying to expand in Canada earlier this summer, many market experts warned that entering Canada for the first time won’t be an easy feat. This week, we are getting the first inklings of what they were talking about.
Among the retailers opening new stores in Canada this summer is J.Crew. But it seems that no sooner than the chain opened its first store in Toronto than it has already managed to turn off some local shoppers. The reason? J.Crew is charging customers at its Canadian stores and on its Canadian e-commerce site a 15 percent premium on merchandise compared to what it charges U.S. shoppers.
Many Canadians are well familiar with what J.Crew’s U.S. prices are because they’ve shopped at its stores stateside and they are outraged at being forced to pay extra for the same products. Some have threatened that they will stop shopping at J.Crew or will return previously bought merchandise.
“I will not spend another penny there,” said Suzanne Dugard, a longtime J. Crew customer who bought about $600 worth of clothes at the Toronto store on Thursday and plans to take them all back. “I feel once again as a Canadian, I’m getting screwed.”
What does everyone think? Was J.Crew justified in raising prices at its Canadian store? Is there any way to mend the chain’s image north of the border?
It’s always been a difficult scenario…American chains know there is an opportunity to target Canadian consumers as Canadians continue to cross the border to shop State’s side…the reality is, it is not only a question of choice rather price as well…especially with the Canadian Dollar almost at par…it makes the trip all the more merrier…but Canadians are conservative consumers…we won’t give up value for name brand…we pay enough taxes and American chains need to understand the the cost of shipping and duty will need to be absorbed by someone…just not the Canadian consumer…it’s the reality behind getting into retail north of the border…what is the true cost of doing business and is it viable for our company…more need to ask themselves that question…
I can’t comment on the reasons that J Crew would charge a ‘premium’ to its US pricing but will suggest two things for consideration.
On one hand the CDN dollar has traded high than the US greenback for many months. On the other hand duties and tariffs coming into Canada vs the USA also factor into pricing.