LESS than two years after opening the first of 133 stores in Canada, Target, an American retailer, is packing up and going home. Target’s decision to put its Canadian assets under bankruptcy protection, announced on January 15th, leaves 17,600 people without a job and the firm nursing a $5.4 billion loss. Brian Cornell, Target's chief executive, said the retailer had never impressed Canadians from the start. Logistical problems often left shelves empty. Poor holiday sales finally persuaded his executives that it was unlikely to improve its fortunes north of the border.

Disenchanted shoppers are certainly part of the story. Target's arrival had been warmly greeted in Canada, where cross-border shopping and exposure to American media made it a familiar brand. But when it turned out that its Canadian stores did not offer the same range and low prices it did in America, customers went elsewhere.

However, there were other factors, only some of which could be anticipated, that made life increasingly difficult for Target. After its arrival, price competition grew so fierce that the central bank pointed to "widespread and persistent competition among retailers" as one reason why inflation remained unexpectedly low, which analysts soon dubbed the "Target effect". Industry consolidation also ate away at Target's selling point as a one-stop shop. For instance, last year's takeover of Shoppers Drug Mart, a pharmacy, by Loblaw Companies, a grocery giant, made it easier for consumers to shop for food, clothes and drugs all in one place. It did not help that the retailer did not offer online shopping in Canada, in contrast to its rivals.

A fluctuating exchange rate between the American and Canadian dollars also presented its own set of difficulties. In 2013, when the two were trading at par, it was easy to spot that Target's prices were higher in Canada. Protestations by business groups, backed by a parliamentary study, that taxes and transport costs in a thinly populated country accounted for much of the difference, fell on deaf ears.

Cut-throat competition and an unhelpful exchange rate are also making life more difficult for other foreign retailers trying to break into the Canadian market, such as Nordstrom, an upmarket fashion store that is also facing the sort of elevated expectations Target did. On January 15th, Sony, a Japanese electronic giant, also plans to close all 14 of its Canadian outlets within the next two months.

But although many American retailers are licking their Canadian wounds, at least they are having better luck at home. After announcing Target's retreat from Canada, Mr Cornell was noticeably brighter when talking about the company’s prospects south of the border. While Canada's economy is being dragged down by the plummeting price of crude oil, the American economy appears to be gathering strength due to exactly the same trend. That, alone, is reason enough for Target to cut its losses and go home.