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View Full Version : Richmond-based T&T Supermarket sold to Ontario-based Loblaws for $225-million



mr.x
Jul 25, 2009, 2:07 AM
I really hope this doesn't mean the store's products will slowly change to the stuff Weston sells...





Loblaws buys B.C.'s T&T Supermarket for $225 million
CEO Cindy Lee says deal won't change Richmond-based business that has catered to Asian Canadians for 16 years

By Joanne Lee-Young, Vancouver Sun
July 24, 2009 5:24 PM

VANCOUVER — Cindy Lee was a self-described housewife in 1993 when she opened her first Asian grocery store in Richmond.

For years, she had been working as a part-time bookkeeper with her husband’s real estate development business, and peddling various entrepreneurial ideas, literally going from store to store with her wares — all the while trying to usher her three kids around in the rain trying to get her shopping done in Chinatown.

On Friday, the 17-store chain that Lee built into the iconic T&T Supermarkets was sold to Loblaws Inc. for $225 million.

The deal brings together Galen G. Weston — heir to an established, Euro-centric, Ontario-based supermarket empire — and Lee, an immigrant who capitalized on waves of migration from greater China to B.C. to corner what is one of the country’s fastest-growing consumer segments.

Having provided Asian consumers in Canada with specialty foods for the last 16 years, Lee said on Friday that the company is now at a new stage.

“For the company to expand in the future, we have to plant deeper roots,” Lee said. “To do this, we must get our products to more Canadian consumers. There are only two ways: Either we bring these mainstream consumers into our stores, or we put our products into their aisles.”

In a call with Chinese-language media, Lee emphasized her belief that the sale to Loblaws would not change what has become an popular ethnic shopping experience.

“It’s only with our unique characteristics that we are attractive,” she said. “We emphasized this important point in negotiations [with Loblaw]. They see us as having had success in handling the Asian supermarket segment. That is why they are buying us.

“They approached us because they want to break further into Asian groceries. They don’t want to change us. We are both thinking the same thing.”

Lee spent Friday assuring the company’s approximately 4,000 staff (about 2,000 in B.C. and Alberta, and about 2,000 more in Ontario) that there “will be four no’s: There will be no layoffs, no pay cuts, no change in their benefits, and no change to management.”

T&T currently operates 17 stores in total. To compare, most independent grocers — there aren’t many — have fewer than 10 stores. Many have just one. Sales in the 12 months ending June 30 were about $514 million.

According to terms of the transaction with Loblaws, $191 million of the purchase price will be funded in cash and the remaining through preferred shares, the value of which will be tied to the future performance of the business.

The first T&T stores in Richmond and Burnaby were started by Lee back in 1993.

When her husband, Jack Lee, started developing President Plaza on No. 3 Road in the late 1980s, the shiny, $60-million complex had some small stores, a Radisson hotel, and a temple, but it needed a supermarket anchor. Cindy Lee stepped in to open what quickly became the family’s most successful venture.

To do this, the Lees brought in deep-pocketed and savvy joint venture partners: A listed conglomerate from Taiwan, Uni-President Enterprises, which operates 7-Eleven convenience stores; and an Asian grocery chain from California, Tawa Supermarket Inc.

The three original shareholders, including the Lees, are the same, but it is not publicly known how much each owns, according to T&T spokesperson Herman Poon.

The supermarkets grew as more new immigrants — especially from greater China (first, Hong Kong and Taiwan, and in more recent years, mainland China) — made their way to Metro Vancouver.

After gaining a toehold in the West, with 10-plus stores across B.C. and Alberta, T&T took on Ontario in 2002 with a store in Thornhill, near Toronto.

The move east put it on the radar screen of consumers there, but also of Bay Street analysts and bankers.

“We started getting noticed. People started asking questions. ‘Are you for sale?’” said Poon.

One of the first Bay Street observers to flag T&T was Perry Caicco, a Toronto-based CIBC World Markets analyst. When institutional investors came by for retail conferences to discuss the likes of Loblaws, Shoppers Drug Mart and Canadian Tire, he would detour them for a walk through T&T.

“T&T’s fast growth is a huge testament to its cleanliness, the beauty and presentation of its products,” said Caicco in an interview with the Vancouver Sun in January 2007. “It has appealed to first and second generation Chinese customers. It is now also reaching to non-Asians, which is such a difficult thing to do.”

Indeed, Chinese-language reporters wondered on Friday how T&T would reach out but still tend to its core Asian consumers after the Loblaws purchase.

Lee said: “There will be no change to store formats. Our brand will be the same. It will continue to be T&T — not ‘Loblaws T&T’ or anything like that.

“There is an Asian sense of pride here. I don’t want them to change it.”

She acknowledged that “in the big picture, we have the same thinking, but no integration between two companies can ever be completely smooth. There will be bumps.”

Chief among these, in her mind, are linguistic and cultural issues, the kind that multi-national transactions usually involve.

“Most of our staff mainly speak Cantonese or Mandarin. Loblaws obviously won’t be speaking to us in Chinese. But it’s a small challenge, not a big one. Pushed to it, we can be quick to adapt,” said Lee.

jlee-young@vancouversun.com
© Copyright © The Vancouver Sun





Comments from the Vancouver Sun:


Eastern Block
July 24, 2009 - 4:32 PM

Don't worry about the employee's english as they'll all be replaced with caucasians, then they'll replace all the asian products with caucasian products, finally replace the t & t name with some other name...say loblaws.



Shaun
July 24, 2009 - 4:23 PM

Lol, what does it matter if there is a stench in a asian food mart, have you ever been to chinatown? Stupid comment. I'm white and I love asian food, T&T has had some great prices for seafood and everything else, probably the cheapest there is, let's hope it stays that way.




STEVE
July 24, 2009 - 3:51 PM

great, T&T will cease to be the way it is. I hope they don't start selling white person's food there much otherwise, it'll be just another supermarket.




J
July 24, 2009 - 1:46 PM

I am worry T&T will have full of No Name products on its shelves. in the future, I may not be served like the way right now when buying meats and seafoods. And I will have to switch my breakfast from Asian pastry to wonders bread. how sad.

NetMapel
Jul 25, 2009, 2:13 AM
T&T is the primary grocery store that our family shops at. This worries me indeed.

ryanmaccdn
Jul 25, 2009, 2:40 AM
ugh good!

maybe finally they will have stores that resemble a decently run operation.

I swear I walk into the one near Stadium and fall on the floor with that horrible old seafood/whatever that smell is sorta thing.

I hope they turn into No Frills stores....

mezzanine
Jul 25, 2009, 5:07 AM
^no way, man, the chinatown T+T rocks. You cannot find a better source of live fish at any T+T vs the pitiful selection at superstore, let alone DT vancouver. Live lobster at $7.99/lb? bring it on! they have an eclectic mixture of goods unique in large format groceries nowadays (Find me a better/cheaper fruit/veg section anywhere among large grocers. asian snack foods? bingo. And for some reason, olive oil, balsamic vinegar and italian pasta (from italy) is always inexpensive there). if you are looking for an inexpensive lunch, wait around the prepared food section after 1700 when they start mark downs.

Most importantly, I am seeing more and more mixed folks there. The asian language students brought the latin american language students. And more and more caucasian people from international village getting stuff and checking out the durian whle they are there. warms my heart...:cheers:




another loss of a locally-based business. I hope loblaws doesn't screw them up....:(

CLC
Jul 25, 2009, 5:24 AM
From a consumer point of view, T & T isn't that "inexpensive"
a number of independent grocers (usually opened by Chinese) around Vancouver and Richmond offers better prices in a lot of Asian foods and imports

the chinatown T+T (perhaps because its proximity to DT) particularly tends to mark up their product prices, sometimes you can find the same thing sell for a bit lower in T & T Metrotown or Surrey store

nname
Jul 25, 2009, 6:50 AM
Maybe their employees can now have a more manageable schedule and get better paid...

deasine
Jul 25, 2009, 7:04 AM
Maybe their employees can now have a more manageable schedule and get better paid...

I think Lee meant "five no's...;" he forgot no raises.

usog
Jul 25, 2009, 7:19 AM
As long as they don't touch the selection and pricing, I'm good. It's the only place I got to buy stuff I got used to back overseas and have the occasional craving to make =X

SpongeG
Jul 25, 2009, 8:50 AM
if its loblaws they already pay pretty crappy - they never hire full time either - that way they can avoid benefits

it seems to say they will keep the T&T as it is and expand it since its a growing segment - Calagary only have 2 stores i think - i don't think there are any in winnipeg or saskatchewan

Spork
Jul 25, 2009, 10:17 AM
Sweet, another potential head office gone from Vancouver as they will surely consolidate operations to Ontario.

shaners
Jul 25, 2009, 2:36 PM
hate when this happens. the chain gets bigger and bigger!

twoNeurons
Jul 29, 2009, 1:36 PM
As much as I don't like this, it seems a fairly good fit.

Superstore caters to minorities. It's one of their strategies.

metroXpress
Sep 28, 2009, 8:43 PM
Loblaws closes the purchase of T&T Supermarket for $225 million

(CP) – 3 hours ago

VANCOUVER, B.C. — Loblaw Companies Limited (TSX: L), Canada's largest grocery store chain, has closed the $225 million acquisition of Richmond, B.C.-based T&T Supermarket Inc., Canada's largest retailer of Asian foods.

The deal was announced July 24 and is part of the Toronto company's expansion in ethnic food markets to counter the impact of the recession on its traditional business.

T&T operates 17 stores in British Columbia, Alberta and Ontario and has four distribution centres, three in Vancouver and one in Toronto.

The two cities have large Chinese-speaking populations.

The ethnic food retailer has annual sales of about $500 million.

Under the deal, Loblaws is paying $191 million in cash for T&T and the rest in preferred shares to be issued by a new subsidiary, Loblaws Inc.

The grocer, a subsidiary of George Weston Ltd. (TSX:WN), is Canada's largest food distributor, with more than 1,000 corporate and franchised stores across the country and a workforce of 139,000 full-time and part-time employees.

Loblaw banners include: Loblaws, Zehrs, Fortinos, Real Canadian Superstore, valu-mart, Atlantic Superstore, no frills, Provigo and more.

Copyright © 2009 The Canadian Press. All rights reserved.

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