Loblaw is launching three new ultra-discount grocery stores in Ontario, known as No Name, which aim to deliver lower prices by eliminating frills. The first three stores will open in September in Windsor, St. Catharines, and Brockville, capitalizing on Loblaw’s existing discount brand known for its simplified packaging and marketing. The No Name stores will be less complicated to run, with about 1,300 individual products compared to up to 7,000 at smaller-format No Frills locations.
Loblaw has been investing in its discount store network by opening new stores and converting others, as the industry has been under pressure to stabilize or lower food prices after a bout of inflation left grocery costs more than 20% higher over three years. The stores will have shorter operating hours from 10 a.m. to 7 p.m., limited marketing, and no flyers. Shoppers will find a small range of frozen items, packaged bakery items, produce, and pantry staples, but no refrigerated foods like dairy or fresh meat.
The company is relying on reused fixtures such as shelves and cash lanes to reduce costs and will have no self-checkouts. The streamlined product selection also means less waste. Building these stores will take about 10% to 20% of the cost of a new regular-sized No Frills store, giving the company more room to cut costs for customers. Prices at the store will be up to 20% cheaper than comparable products at nearby discount stores, including Loblaw’s own No Frills stores.
Within six months, Loblaw expects to have a good idea of whether the concept is working. They sees discount as a “growth engine” in the coming years for Loblaw, from No Frills and Maxi stores, smaller-concept No Frills locations, and potentially these new No Name stores. “The No Name store is a completely different shopping experience,” Loblaw president and CEO Per Bank said in an interview.
Source: The Star
Source: Globe and Mail
Source: Financial Post
