Giant Tiger Stores Ltd. chief executive Paul Wood departed the company during the week of November 7th in the midst of positioning the discount retailer as a go-to store for price-sensitive shoppers during the worst inflation crisis since the early 1980s. Board member Gino DiGioacchino has been appointed as interim CEO.
Wood became chief executive at the Ottawa-based company in September 2020, after spending 17 years prior in various internal roles, according to his LinkedIn profile. He helped navigate the company through pandemic-era woes, including supply chain logjams and price increases to business inputs.
Wood’s departure appeared abrupt to outsiders. A week earlier, in what turned out to be his last interview as CEO, he gave a tour of one of the company’s stores in Brampton, Ontario. At nearly every item he passed, Wood reiterated his belief that Giant Tiger — which operates more than 260 stores between Alberta and Prince Edward Island, with most in Ontario and Quebec — is perfectly placed to help shoppers withstand sky-high inflation because of its ethos to keep costs as low as possible.
The inflation impact
High inflation appears to be impacting Canadians’ wallets. In response to shoppers’ search for discounts and low prices, Giant Tiger has ramped up its fresh grocery products in 2022. But higher fuel and commodity prices, poor weather and the war in Ukraine have all pushed prices up at the checkout, making it challenging to deliver on Giant Tiger’s “savings to smile about” slogan.
“I think inflation is not something that anyone can avoid, but what we have always strived to do is provide the lowest possible price in the market,” Wood said of the 62-year-old company. “That positioning, that drive, that focus of ours really has not changed at all. In fact, we’re paying even more attention to that than we have in the past.”
Keeping costs low
Wood said one of the main reasons Giant Tiger is able to keep costs low is because of its private trucking fleet, which handles product deliveries for all its stores across the country.
Its trucking strategy sets it apart from many other retailers forced to pay profit-making fees to third-party transport companies to get goods to brick-and-mortar stores. Those fees, which put a strain on operating expenses in the grocery industry, for example, are either absorbed or passed on to consumers.
Giant Tiger further honed its savings strategy during the pandemic. Supply chain disruptions served as an exercise to make operations more “agile,” and have proven beneficial in the current high-inflationary environment, Wood said. One such change was allowing purchasing managers the freedom to pivot to different brands for certain items if they weren’t available, a practice that carries on today.
Further, the company avoids stockpiling inventory and instead “tightly” manages the amount of goods it keeps on hand. It also leaves room for purchasing managers to source deals on goods on a weekly, if not daily, basis, Wood said.
That policy also keeps storerooms small so it doesn’t have to pay for expensive big-box store space. Giant Tiger further reduces costs by keeping to a spare store design, for example choosing simple light fixtures, so it can pass those savings onto customers.
Though Wood is no longer CEO, Alison Scarlett, head of communications, said the company will keep to that low-cost vision. “Giant Tiger’s focus remains on providing Canadians with the products and groceries they need at the lowest price possible every day. We are proud to serve the 264 communities we call home and look forward to expanding further in the future,” she said.
Source: Financial Post