The biggest online shopping chain in Canada is taking steps to protect its turf as it struggles to fend off online rivals and its own market share in a digital age.
The Canadian Tire Group Inc., which operates Canada’s largest chain of department-store stores, says it is planning to create a dedicated unit for online retailers and is working on legislation that could help it protect its position in the country’s most lucrative online market.
In an internal memo to its retail staff, the chain said it is considering creating a separate unit to help protect its market share from online rivals such as Amazon.com Inc. and Wal-Mart Stores Inc., but is also considering creating one for other types of retailers.
The move is a blow to the retailer’s struggling digital business, where it has struggled to compete with Amazon and WalMart.
Canadian Tire shares fell as much as 10 per cent on the news.
Amazon.com is the No. 1 retailer in Canada, followed by Wal-mart Stores Inc. The retailer said in October it would sell digital goods online for about 40 cents per item.
Amazon and other online sellers are now offering more deals and offers than ever before, but are still struggling to keep up.
Canadian Tire said last month it would be closing its online retail business in 2019 and that it has not yet determined what will replace it.
Canada’s largest retailer said it will create a separate digital unit to protect against other online competitors such as Wal-Marts.
The group also plans to create new sales and service divisions that will focus on the needs of retailers and online retailers.
Canada has been a pioneer in online shopping.
The country has the highest online shopping rate in the world at 25.6 per cent.
The retailer said online sales will continue to be important to it as it grows.
The group will have to rely on the loyalty of its customers, which will continue growing, said Jim O’Leary, vice-president and general manager of Canada’s retail business.
But Canada’s e-commerce market has been buffeted by an array of challenges from the rise of Amazon, to competition from Wal-Waters and to the rise in prices of many products, including those in its stores.