The Internationalisation of Commercial Activities in Canada
By Dr. Jim Simmons and Shizue Kamikihara
This paper provides an overview of the magnitude, process and impact of the entry of foreign retailers in Canada. These firms are widely visible these days: we are all aware of the Gap, or Wal Mart or Toys-R-Us (even Amazon.com), but we don't have a clear picture of how many there are, who they are and where they are.
For Canadians, international retailing is a familiar process. For a long time this country has been the first target of American retailers looking to expand; and a convenient port of entry for British and European firms probing North America. Names like Woolworth, A&P and Sears are part of our retail history; joined more recently by many others. Statistics Canada's CALURA data show that the share of foreign retailers in Canadian sales of consumer goods and services continues to rise, from 20.2 per cent in 1988 to 23.2 per cent in 1996; and in most years foreign firms have a higher level of profitability than Canadian firms. The goal of this research is to find out what can be learned from the experience of foreign retailers. It now seems clear that given the success of foreign retail firms in Canada, within a market that is growing very slowly, the survival of Canadian retailers will require a parallel expansion into other countries. What international strategies appear to be most successful, based on what has happened here?