‘It was just time to move on’ Dakota Family Foods to shutter under operating costs pressure By: Gabrielle Piché Posted: 2:33 PM CDT Wednesday, Jul. 10, 2024 Last Modified: 5:46 PM CDT Wednesday, Jul. 10, 2024 Updates

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After nearly two decades in business, Dakota Family Foods is winding down operations.

The south Winnipeg grocery store announced its impending closure Wednesday morning.

“This decision was not made lightly,” the grocer, located at 1099 St. Mary’s Rd., said in a statement on social media.

It was roughly seven months in the making, according to owner Scott Clement.

Dakota Family Foods’ 10-year lease is up in November. Clement said he couldn’t come to an agreement on a new lease with the landlord.

The decision was backed by other “small-business” problems, Clement continued, including labour and operating cost increases, construction hindering customer traffic and shoplifting.

“I think the grocery industry is probably the most challenging out there,” Clement remarked during an interview. “It was just time to move on.”

 

The roughly 20,000-square-foot store will close by November. It may shutter earlier, depending on staff and inventory, ownership said.

Clement expressed sadness at the looming layoff of 60-odd staff. Dakota Family Foods has had “amazing” employees, he said.

Increased minimum wage — and having to pay higher-wage staff more as a result — was the largest nail in the coffin, Clement said. Manitoba’s legislated minimum wage rose to $15.30/hour in October, a total bump of $3.35/hr compared to September 2022.

Food inflation costs were largely passed to customers, but higher operating expenses (such as equipment) dampened store revenue, Clement stated.

Dakota Family Foods likely experienced five to 10 shoplifting incidents daily; theft continues to be “the toughest part of our industry,” Clement relayed.

Meanwhile, customer traffic decreased after an eight-month construction project near the store in 2022 and it hasn’t fully returned, he continued.

“It’s the toughest decision of my life,” he said of closing Dakota Family Foods.

He plans to take time away from the industry post-closure. His family will continue to operate Portage Family Foods on Portage Avenue.

Grocery store margins can be “exceptionally thin” — around one to three per cent in most areas, said John Graham, Retail Council of Canada’s director of government relations for the Prairies.

Independent stores are both managing escalating labour costs and fluctuating global pricing pressures, he explained. Customers are also dealing with higher prices — and they’re visiting discount retailers more often, he added.

Dollar stores, too, have gained popularity as food sources.

Almost two-thirds of Canadians have changed their primary grocery store in the past year for lower prices, a survey by Dalhousie University’s Agri-Food Analytics Lab found in February.

“The grocery sector is exceptionally competitive … it’s not easy for any store to compete,” Graham said. “Ultimately, it’ll be up to Manitobans to continue to support small, independent stores and help them to be able to continue to operate.”

“The grocery sector is exceptionally competitive … it’s not easy for any store to compete.”–John Graham

The Dakota Family Foods site was previously an IGA grocery location. The locally owned store has “amazing customers,” Clement said.

Some patrons flocked to the grocer upon hearing its days were numbered.

On Wednesday, Alice Edwardsen filled her cart with noodles and discounted soups.

“These shelves are going to be empty sooner than later,” she said. “It’s very sad to see this … coming to an end.”

Edwardsen has visited the location since its IGA days; she’s gotten to know Dakota Family Foods staff, including Clement.

She once ran into the store owner in Las Vegas — at the time, he was a familiar face she’d never talked to, she recalled. The local and personal element drew her to Dakota weekly, Edwardsen said.

Meanwhile, Carole Christle and her daughter Stephanie were picking up pastries to freeze. Stephanie, 16, grew up with a weekly sweet treat from Dakota Family Foods, courtesy of her grandma.

“These shelves are going to be empty sooner than later. It’s very sad to see this … coming to an end.”–Alice Edwarsen

“It brings back memories,” said Carole Christle, holding a boxed cheesecake slice. “Good memories.”

Customers regularly travelled between Dakota Family Foods and nearby Gimli Fish Market, said Charlene Bell, a fish market employee.

“That is going to affect us a little bit,” she predicted of the impending closure, adding it is sad news.

Family Foods locations are independently owned and operated, the brand’s website promotes. It boasts upwards of 70 locations across Western Canada.

Dakota Family Foods will discount its inventory within the next few weeks, according to an online statement.

gabrielle.piche@winnipegfreepress.com