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Tiger Capital: U.S. Retail Execs Doing Business In Canada Should ‘Know Their Boundaries’

February 05, 2013, 03:28 PM
Filed Under: Retail

As more U.S. retailers cross the border in hopes of tapping the potentially lucrative Canadian market, they should take care to educate themselves about the nuances of Canada’s diverse and relationship-driven business environment, writes Bradley W. Snyder, a Boston-based managing director of Tiger Capital Group, in a Jan. 25 column published by Chain Store Age Online.

“Far too many U.S. businesspeople see Canada as something akin to a 51st state—a place where they can take a business-as-usual approach without thinking much about the substantial cultural, social, geographic and political differences that prevail north of the border,” writes Snyder, who has worked extensively with retailers and manufacturers in Canada since 1998.

Snyder penned the opinion piece, he says, in part because of the stories his Canadian colleagues occasionally tell him about the missteps of U.S. businesspeople trying to break into the Canadian market.

In the column, “Know Your Boundaries: Don’t Treat Canada Like a 51st State,” Snyder describes a host of differences between Canada and the United States—from the political and linguistic sensitivities in Quebec, to the greater role that relationship-building tends to play in Canadian business, to various logistical wrinkles related to distribution, trade agreements, product labeling and more.

He also points to some of the opportunities now presenting themselves in Canada. “Many Canadians are thrilled about the prospect of more access to American brands,” Snyder writes. “These aspirational consumers have grown tired of a number of the ho-hum, homegrown retailers. Certain consumers in Western Canada, meanwhile, now have plenty of money to spend amid the ongoing energy boom.”

Canadians can also be quite cost-conscious, which makes them good customers for value chains that have been on a tear in the United States, Snyder adds. Indeed, robust competition from the likes of Target and Wal-Mart will likely force Canadian chains to take more aggressive markdowns. “And so in the next few years we are likely to see a bit of a bloodbath on margins,” Snyder writes. “Some of the homegrown players could fall by the wayside, creating more opportunities for foreign chains.”

But all of this will require relationship building—with landlords, local officials, leasing agents, marketing experts and, not least of all, consumers. “The first step is to drop the kinds of preconceptions that, all too often, hinder U.S. businesspeople working north of the border,” Snyder writes in the conclusion to the piece. “Rather than seeing Canada as a 51st state, those who ask questions and seek local expertise will better position themselves to reap the rewards.”

Tiger Group provides advisory, restructuring, valuation, disposition and auction services within a broad range of retail, wholesale, and industrial sectors.

View Bradley Snyder's article here.

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