Rough times at the register Four neighbourhood grocers put up “for sale” signs in five days; inflation-battered shoppers looking for deals, squeezing little guys out By: Gabrielle Piché Posted: 2:26 PM CDT Friday, May. 19, 2023 Last Modified: 3:26 PM CDT Friday, May. 19, 2023 Updates

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This article was published 19/05/2023 (841 days ago), so information in it may no longer be current.

Monissh Kapoor keeps limes at his counter, next to the candy by the cash register, where he sometimes hands out free sweets.

He and his wife have a dedicated clientele of Wolseley residents who regularly stop by for soda, bread and other staples on the shelves.

But they don’t know how much longer they’ll be the one greeting shoppers. He recently put Barchet’s Grocery up for sale.

It’s one of four small neighbourhood grocery stores that hit the market in a five-day span this month.

“Convenience stores will be history in some years,” said Kapoor, who immigrated to Canada from India in 2019 and opened Barchet’s Grocery about 14 months ago. “We can’t compete with the big sharks.”

That, however, isn’t the reason he’s selling; he has fibromyalgia, which causes pain throughout his body and makes operating a store difficult.

Barchet’s Grocery breaks even — “takes care of itself,” he said — but the couple can’t afford to hire full-time staff. A part-time employee assists on the weekends.

Kapoor is eyeing retirement or another job with minimal physical activity. The Westminster Avenue shop’s new owner will likely have a steady clientele; it’s a good neighbourhood, he said, adding the store will remain open until he finds a new owner.

“It’s all a game of survival of the fittest… Our bulk is not (bigger retailers’) bulk. We can’t compete with their bulk purchases.”–Monissh Kapoor, Barchet’s Grocery owner

He fears for the industry’s future.

“It’s all a game of survival of the fittest,” he said. “Our bulk is not (bigger retailers’) bulk. We can’t compete with their bulk purchases.”

Kapoor might buy products from a big-box store and sell them at his shop because it’s cheaper than the rates offered to him by distributors.

Another local grocer told the Free Press they do the same thing. They don’t stock their entire stores that way but every little bit helps.

Smaller retailers are pressured to keep their costs down to play ball with national chains.

“It does cut our profit margin, to stay in competition with them,” said Rajan Varma, manager of Dino’s Grocery Mart in Winnipeg. “The minimum wage has gone higher, so cutting down our profit margin is not… good.”

Dino’s, which is not for sale, touts itself as Manitoba’s largest international grocery store. Not only does it pay more for items than competitors do, their large orders are given priority, sometimes leaving Dino’s short on product, he said.

“We have been struggling before COVID, and we’re struggling right now,” he said.

One way to retain customers is to make exclusive deals with manufacturers, ensuring bigger stores don’t carry products Dino’s does, Varma said, adding the store is still profitable.

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Between May 6 and 10, Family Foods on Watt Street, KT Mart on Manitoba Avenue, K & D Food Store on Selkirk Avenue and Barchet’s Grocery went up for sale on Realtor.ca.

Neither Family Foods nor KT Mart could be reached for comment. A staff member at the Selkirk Avenue grocery declined an interview request.

There’s “a cacophony of not great things going on” that could lead to corner store and local grocery closures, said Robert Parsons, a University of Manitoba supply chain management professor.

For one, the effects of the pandemic continue to ripple through the economy.

Between May 6 and 10, Family Foods on Watt Street, KT Mart on Manitoba Avenue, K & D Food Store on Selkirk Avenue and Barchet’s Grocery went up for sale on Realtor.ca.

“We’re probably not going to see the end of that for a couple years,” Parsons said.

The average Manitoba small business carries more than $61,000 of pandemic debt, according to Canadian Federation of Independent Business data.

Meantime, the Bank of Canada has hiked its key interest rate eight times since March 2022, from 0.25 to 4.25 per cent. There’s speculation over whether it will raise the rate further in a bid to tame inflation. Each increase makes mortgages and other loans more expensive, affecting many small businesses, Parsons noted.

Food costs continue to rise, and corner stores don’t have the same market power to negotiate prices with manufacturers as large chains do, he said.

Consumers who are “pushed to the edge” by cost-of-living increases will search for better deals when prices rise, Parsons noted.

Other businesses may close because retiring owners have no succession plan, he added.

“(It’s) not a huge surprise that we see this happening,” said Paul Larson, also a University of Manitoba supply chain management professor. “I think it’s sort of a long-term trend in the market.”

Consumers were turning to bigger-box stores for deals before the pandemic; the more links in the chain, the more entities need a profit, so prices increase, Larson said.

“The larger you are, the more often you can deal direct with the major suppliers,” he added. “Then you (can) operate, maybe, a wholesale operation.”

Young Na, who owns V-Maxx Convenience Store on Vaughan Street, said prices have escalated “too much.”

Sales dropped during the pandemic and Na contemplated shuttering V-Maxx.

He stuck it out and optimistic about the future.

“Customers have come back slowly,” he said, adding it would be a good thing to have more people downtown.

gabrielle.piche@winnipegfreepress.com

Gabrielle Piché
Reporter

Gabrielle Piché reports on business for the Free Press. She interned at the Free Press and worked for its sister outlet, Canstar Community News, before entering the business beat in 2021. Read more about Gabrielle.

Every piece of reporting Gabrielle produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.