Winnipeg Free Press - PRINT EDITION

Bolder, brighter Zellers takes off

Customers raving over chain's new look

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Zellers has gone bold and bright with its Winnipeg stores and the strategy seems to be working.

Last summer, the national discount department store chain set out to differentiate itself from its main competitor in the Winnipeg market -- Walmart Canada -- by adopting a new look for the interior of its Winnipeg stores.

That meant bolder, brighter colours on the walls, better lighting, wider isles and lower display cases. It also expanded its product offering to include fresh fruits, vegetables and baked goods.

But the boldest move of all was to venture into an area of the city where neither chain had gone before -- the downtown. The company announced it was opening a new 67,000-square-foot store in the basement of the Bay's historic downtown store -- the Hudson's Bay Company also owns Zellers.

Although the official grand opening is today, the store had its "soft opening" three days ago. And Winnipeg district manager Adrienne Pavlik said Thursday she's thrilled with the response it's received so far.

"We had a big pickup (in customer traffic) on Tuesday... and it has continued to grow each day," Pavlik said during a tour of the new store. "I've been here throughout the week and all of the customers who have come up to speak to me have been incredibility complimentary of what we're offering them."

She said a similar makeover at five of its other Winnipeg stores, which were completed last August, have also been getting rave reviews from customers.

The revamping of the Winnipeg retail operations -- it has eight stores but the Henderson Highway store will be closing in January -- is part of a national campaign by Zellers to take on competitors like Walmart, which is also beefing up its grocery offering, and Loblaw Cos. Ltd., which owns the Real Canadian Superstore chain.

Robert Warren, who teaches marketing at the University of Manitoba, said the bright, open look Zellers has adopted here is similar to what Walmart's chief competitor in the United States -- Target Stores -- has done with its stores. And he thinks it's a smart move on Zellers' part.

"When you're going up against the proverbial 500-pound gorilla, you've got to find a way to be smarter than or different than that 500-pound gorilla," he said. "Walmart is still using that pile-it-high-and-watch-it-fly approach."

John Winter, a retail analyst with Toronto-based John Winter & Associates Ltd., said he wouldn't be surprised to see the new look spread to other Zellers stores in Canada. A Zellers official did say in August if the strategy goes over well here, it will consider taking it to other cities.

"You never want to sit on your backside and do nothing. You want to come up with some exciting new projects."

He said if Zellers does go that route on a national scale, it could increase the odds of Target making a bid to acquire the chain -- something that been rumoured for more than a year.

Target has already said it plans to enter the Canadian market, and Winter said the best way to do that would be by acquiring the best performing store in an existing chain like Zellers.

"There's no way you can just build a store here or build a store there. You have to do it on a big scale to come anywhere close to competing with Walmart."

The conversion of the basement of the downtown Bay store to a Zellers outlet is also part of a larger project that has seen the Bay consolidate its retail operations on three and a half floors and offer the space on the remaining two and a half floors to the nearby University of Winnipeg.

The university is considering relocating its graduate and undergraduate aboriginal programming to the store and creating a national centre for indigenous studies, culture and art.

Republished from the Winnipeg Free Press print edition December 3, 2010 B4

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