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Retail

Canadians Didn't Trust Target Even Before the Data Breach


Target (TGT) didn’t venture outside of America until last year, when it opened 124 stores in Canada. There’s been trouble ever since. Target ran into unexpected competition from Wal-Mart Stores (WMT) and other rivals up north and unexpected resistance from Canadians themselves, and now Target has disclosed that Canadians were likely caught up in the massive security breach, too.

In an e-mail to some of its Canadian customers sent Monday, Target said its investigation found that Canadians who crossed the border to shop in the U.S. between Nov. 27 and Dec. 15 could have had their personal information stolen. Target noted that credit and debit card information wasn’t stolen from stores in Canada because they use a different payment system than the one that left its U.S. operations so vulnerable to attack. Canada is also among the countries that use more secure chip-based credit cards.

The hack revealed last month involved 40 million credit and debit card accounts and the personal information of 70 million customers. Target said that fewer than 1 million Canadians had been affected.

But here’s a question: Why were all those Canadians shopping at Target in the U.S. when Target just opened all those stores? Throughout the fall and into the holiday season, the retailer disappointed many in Canada with prices higher than those in the U.S. and a poor selection of merchandise. “We gave all of our competitors [in Canada] a two-year notice. So, in that last two years, they’ve upped their game. They’ve cleaned up their stores. They’ve added more service. They’ve lowered their prices,” Target Chief Executive Officer Gregg Steinhafel said in an interview on CNBC earlier this month. “They got better. We’re going to have to get better.”

Susan-berfield-photo-200x200
Berfield is a writer for Bloomberg Businessweek in New York. Follow her on Twitter @susanberfield.

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