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| FTLComm - Winnipeg - Thursday, July 4, 2002 |
| It was in the 1960s that the market consolidation grasped
a hold of the food stores across this country. Merchants had up until then been able
to open a store and buy from wholesalers providing the service and products their
customers demanded. The big Franchises had already made their way into the marketplace
with their brand names but the small towns of Saskatchewan's and even the cities
still considered the selling of food as a sort of trust between the merchant and
the customer. In the early sixties there was one lone market left in Regina, there were small mom and pop corner stores but the "supermarkets" with the big names had the marketplace sewn up with the exception of that lone store on Albert Street. Safeway, Loblaw and Co-op. The neighbourhood stores in the cities and the Co-ops of small town Saskatchewan did their best for twenty years when the phenomena of really big stores began to emerge. The first one I saw was the mammoth "Save On Foods" owned by Overweighty opened in Richmond and with in six months Westfair foods was fabricating "Superstores". Just as in agriculture, the slim margin of food marketing demands that volume rules. Westfair's Superstores and their smaller "OK Economy" were so effective that Garfield Weston's Safeway was to the point of almost closing all of its Saskatchewan outlets. Only the Co-ops with the one member one vote mentality and loyal following in every village big enough to have a street light were an alternative to the giant. Westfair has pretty well killed off the old OK Economy name and replaced it with their Extra Foods name for the smaller locations like Tisdale, Melfort and Nipawin while SuperStores in Regina and Saskatoon had to deal with the giant retailer COSCO handling food and providing competition. A few "Warehouse" outlets owned by Westfair are in Saskatoon and Swift Current but they are almost universally disliked for their really bad environment. A week ago IGA opened its doors in Regina after this Winnipeg outlet opened about a month ago. The IGA brand name has been around for some time as an Ontario food franchise chain and bought out the Maritime Sobey chain.  To move into
the West IGA has entered the market with these two stores and like the Saskatchewan
Co-ops has emphasised ambiance and pleasant surroundings to create a market-like
atmosphere. The effect is really impressive unlike the austerity of the Superstores,
IGA has street lamps in the deli food court, and this morning we encountered
about eight or nine sample tables.Unlike other consumable food is not something the customer can avoid buying and the industry can get buy on its small margins provided they have a flow of customers. Safeway has remained in business by charging just a little more and offering perhaps a little better service, certainly Safeway stores are far more congenial then Westfair outlets and the Saskatchewan Co-ops are a good deal better than their competitors but IGA has raised the anti with sumptuous surroundings and a whole range of finished food products made right in the store like complete meals ready to warm up for $2.00 (a special on Thursday). South of the border the food fight is taking a radical new turn with Wal-Mart moving into produce and full food services. Their strategic locations make them formidable adversaries to American food store chains. Ultimately the consumer is going to be calling the shots on this one and it will be interesting to see if IGA can make this venture into the West pay off. The proof will be to see if they expand with more outlets beyond the two now up and running. |
