Target sale pricing "scandal" explained

The real story behind the sales

By Leah Ching

The Argus

Target photo from Kevin Dooley on flickr

In January of this year, Target announced their departure from the Canadian market, affecting 133 stores and over 17,500 workers. The announcement came after less than two years of lacklustre sales and low profitability, with estimates that profitability wouldn’t occur for the retailer anytime before 2021.

Target’s liquidation process hasn’t been the smoothest, with the store gaining criticism for sale prices and employee compensation rates. Canadians were appalled when it was announced that Target had put aside $70 million CAD compensation to pay workers affected by the closures. This total severance package, split between 17,500 workers has been said to be roughly in the same ballpark as the package received by Target Canada CEO which has been estimated at $61 million USD by Fortune Magazine.

Sales have drawn massive crowds throughout Canada, with lines in Thunder Bay running on late into the night on the first day of the liquidation process. Along with these crowds were harsh critics of the bargains, complaining that the prices weren’t low enough. Marketing student Jamie Whitfield said that “The store’s supposed to be gone by early May, but for a store expecting to close quickly and sell all of their product, it’s not going to go very fast at this current rate.” With most sales only discounted “up to thirty percent” many are disappointed at Target’s failure to follow through on advertising of deals.

Canadians flocked to Facebook last week to support a post by Christina Veraldi of Ajax Ontario when she posted a complaint about potential shady retail practices at Target. After pulling back the sticker price on an Aveeno body wash priced at $7.59 and seeing that it was previously priced at $5.99, Veraldi reports that she questioned a manager about the price change and was told to put down her purchases and leave the store.

Her Facebook post has resonated with many Canadians. With 32,000 shares and counting, she asked, “What kind of shady business practice is this and how can this retailer get away with misleading sales and discounts that truly don’t exist?”

The Argus visited Target Thunder Bay to do some research for ourselves and checked the pricing of the same Aveeno body wash, which was found to be priced $7.59 here as well. The Argus also talked with a store manager who asked to remain anonymous, but explained some of Target’s pricing policies.

“If you look at Veraldi’s post, you’ll see that the $7.59 price was effective as of January 15, with the $5.99 price being printed on of November 9 of last year, prior to Black Friday sales.” She then explained that “prices like that one change to match changes in the market and changes in prices at other stores.”

She said “There’s nothing really shady about it,” Someone just forgot to move the old price tag when the prices changed, and the price change had nothing to do with the liquidation, the $5.99 price was most likely just reflecting an old sale on that one particular product.

Peeling back other price tags at Target showed that behind most price tags were higher prices, showing that there were indeed price reductions, even if they were miniscule.

At Wal-Mart the price of the same body wash was a similar $7.47, meaning that with Target’s 30% savings, the consumer would pay a total of $5.31 before taxes, less than that of Wal-Mart, and less than both prices previously listed at Target.

When it came to the rudeness of Target employees, the anonymous manager commented, “I’d take any claims like that with a grain of salt. We’re people too and we’re trying to deal with the fact that in a month or two, some of us won’t be able to pay our mortgages while the Canadian CEO is making as much money as all of us combined.”

 

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