High hopes for low-cost grocers

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This article was published 26/03/2015 (3848 days ago), so information in it may no longer be current.

The No Frills discount grocery store chain will make its Manitoba debut Friday with the opening of the first of what could be a host of new franchise outlets in the province.

Hellard’s No Frills, which is named after franchisee Casey Hellard, is slated to open for business at 8:45 a.m. Friday at the former Extra Foods site at the corner of Main Street and Luxton Avenue. That will be followed two weeks later with the April 10 opening of a second No Frills outlet at the former Extra Foods location at 600 Notre Dame Ave.

A senior company official made it clear Wednesday if these two stores do well, others will follow. And not just in Winnipeg, but in other Manitoba cities and towns.

“One thing about our model is we have a lot of flexibility about where we can go,” senior vice-president Michael Venton said in an interview, noting there are No Frills stores in cities as large as Toronto and as small as Kenora, Ont.

“All I can tell you is that we don’t need major cities to make these (stores) work,” he said. “We haven’t done a whole bunch of digging beyond these two, but we think there could be a multitude of different opportunities (in Manitoba), depending on what the market kind of gives us to look at.”

The No Frills chain is a subsidiary of grocery giant Loblaw Companies Ltd., which also operates Real Canadian Superstore, Extra Foods, and Shoppers Drug Mart stores here and elsewhere in Canada.

Its arrival adds another player to the local retail/grocery store scene, which has seen a lot of jockeying for position over the last few years, with heavyweights such as Walmart and Costco expanding their footprint, other large-format retailers such as Sobeys and Canada Safeway and Real Canadian Superstore and Shoppers Drug Mart merging their operations, and Zellers and Target either disappearing or about to disappear.

Jino Distasio, the head of the University of Winnipeg’s Institute of Urban Studies said while selling groceries “is a tough business even at the best of times,” there’s still room for another discount grocer such as No Frills, especially in older or inner-city neighbourhoods such as the ones in which the two new Winnipeg outlets are located.

While the inner city boasts a variety of smaller, ethnic grocery stores, it needs more larger-format outlets, he said.

“I think the more the merrier, in a way. They don’t have to be 100,000-square-foot, full-feature grocery stores, but you really want to see a larger-footprint store that has a range of items,” said Distasio, noting residents of lower-income areas often don’t have access to a vehicle, and affordability is top of mind for them.

“So we really want to see as many households as possible have access to decent-quality, affordable food, usually within a kilometre of their home.”

No Frills stores strive to offer the lowest prices by keeping their operating costs as low as possible. That means carrying a smaller assortment of items, having customers bag their own groceries, and using “minimal cost” decor — things such as warehouse-style racking and cardboard cases on the shelves.

“We call ourselves limited line,” Venton said. “As a customer, you could easily do a full shop, but you would not see the assortment (of products) you would see in a conventional food store.”

No Frills stores carry produce, meat, deli, dairy and baked goods, although there’s no production on-site. They carry President’s Choice, No Name and national-brand products, and the store owners always have the option of adding products that cater to specific needs of the neighbourhood.

Prior to becoming a No Frills franchise, Hellard was a district manager responsible for all Extra Foods stores in Manitoba, Saskatchewan and northwestern Ontario.

“He’s going to have a good sense of the products required,” Venton said.

murray.mcneill@freepress.mb.ca