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Winnipeg Free Press - PRINT EDITION

Giant Tiger expansion plans caged

By: Murray McNeill

Posted: 06/7/2012 1:00 AM | Comments: 0

FIERCE competition is putting a crimp in North West Company's original plan to open 70 Giant Tiger stores in Western Canada by 2032.

President and CEO Edward Kennedy said Wednesday the retail market in Canada is a lot more competitive than it was 10 years ago when North West signed a master franchise agreement with the Ottawa-based Giant Tiger discount department store chain to open 70 new stores in Western Canada over the next 30 years. As a result, some of its Giant Tiger stores aren't doing as well as expected, which has slowed the pace of expansion.

Kennedy said the competition will intensify once U.S.-based Target Corp. opens up to 135 new stores in Canada over the next year or two.

"We still think it's a really interesting niche, but it's going to be a bit bumpy over the next couple of years," he said during a conference call with analysts.

"We don't see that (opening 70 stores), and we haven't seen it for a while, as the name of the game," he said, adding company officials are looking at opening maybe two or three new stores a year "depending on opportunities."

This year, it expects to open two -- in northwestern Ontario and in Saskatchewan. It has 32 stores across the west.

Kennedy also told shareholders North West is keen on adding more Tim Hortons kiosks in its Northern stores. In addition to Giant Tiger, North West also operates Northern and North Mart stores in northern Canada, AC Value Centres in Alaska and Cost-U-Less stores in the South Pacific and Caribbean.

Kennedy said the Tim's kiosks it opened a year ago in Iqaluit, Nunavut, have been a smashing success, selling more than 365,000 cups of coffee.

Mike McMullen, executive vice-president of North West's retail operations in the North, said the company would like to open kiosks in about 25 Northern stores over the next three or four years, including five or six in Manitoba.

-- Murray McNeill

North West Company's first-quarter highlights:

-- sales up 5.6 per cent to $365 million;

-- profit up 9.1 per cent to $13.6 million, or 28 cents a share, from 26 cents a share in the same period last year;

-- earnings before interest, income taxes, depreciation and amortization (EBITDA) up 5.3 per cent to $29.9 million;

-- Canadian and international operations both contributed to the stronger performance.

Republished from the Winnipeg Free Press print edition June 7, 2012 B4

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