Nordstrom Delays Rack Openings in Canada

Nordstrom Inc. (Seattle) has said it will delay bringing its Nordstrom Rack stores to Canada. The retailer, which is opening its first Canadian store in Calgary in the fall, had planned to introduce Rack to Canada in 2015. But a spokesperson confirmed that the company will push back the discount chain’s opening until about 2017.

The Toronto Globe and Mail said Nordstrom is hoping avoid a repeat of the fumbled Canadian debut by Target Corp. (Minneapolis).

Nordstrom told the Globe and Mail that it didn’t anticipate that Canadian expansion would be so complex and is learning lessons from Target’s struggles. “We want to ensure we understand how to best serve Canadians,” the spokesperson said.

In addition to Target’s well-publicized problems in Canada, U.S. retailers have become cautious as growth in Canada has become sluggish. Bank of Canada Governor Stephen Poloz warned last week that growth will be slower than in the past. According to estimates by Moody’s Investors Service, retail sales, excluding autos and gasoline, will rise just 1.5 to 2 percent in 2014, markedly lower than the 5-per-cent average annual growth in the two decades before 2008.

“Canada’s lackluster retail sales growth could persist as households focus on repaying debt,” the Moody’s report said.