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SSLL Jun 2, 2005 9:26 AM

Canadian Retail Thread
I thought it might be a good idea to have a thread to post any snippets of retail information that might not necessarily warrant a thread of its own.

Here's an article about Lowe's coming into Canada. They're a big box home improvement chain à la Home Depot or Rona. There are talks of them buying Rona up.
Home reno giant Lowe's readies move into Canadian
Thursday, June 2, 2005 Updated at 3:55 AM EDT
From Thursday's Globe and Mail

Retailing and real estate insiders are bracing for the arrival of Lowe's Cos. Inc., a U.S. home improvement powerhouse whose entry into Canada could further shake up an already competitive retail landscape.

Two consultants have been quietly talking to Canadian landlords over the past few weeks, discussing possible deals for superstore sites, and industry sources believe Lowe's, the second-largest U.S. home improvement merchant, is the prospective tenant.

Lowe's could make an announcement about its plans for Canada as early as next week, real estate sources said. A number have been told to expect an announcement on June 6. Lowe's said it does not comment on rumours, but confirmed it has a global growth strategy.

"We have said for a number of years that we are evaluating international opportunities. At some point we will be a global company," said Chris Ahearn, a spokeswoman for Lowe's in Mooresville, N.C.

The chain has been a rival to Home Depot Inc., the world's biggest home improvement retailer, which already operates in Canada.

Lowe's has ridden the wave of women's growing interest in tackling home improvement projects. With annual sales of about $36.5-billion (U.S.) and more than 1,100 stores in the United States, Lowe's courts women by pushing home decor and other related items.

It has designed its mega-outlets in a more inviting manner, with wide aisles and bright lights to ease the stresses of shopping.

In Canada, Rona Inc. of Boucherville, Que., has become a powerful contender to the No. 1 Home Depot also by catering to women's tastes. As well, Rona has grown rapidly in recent years by swallowing rivals.

Now, industry insiders suggest that Lowe's may eventually try to snap up Rona, if it hasn't already attempted such a move.

When Robert Nibock took over as chief executive officer in January, he told analysts that he was interested in international growth.

"Certainly there's a lot of opportunity on the international side, and it's something that we will, over the next year or two, be in the process of assessing," Mr. Nibock said.

Retail consultant John Williams of J.C. Williams Group Ltd., said it may be difficult for Lowe's to establish itself quickly in this country without eventually making a big acquisition.

He pointed to the huge head start of both Rona and Home Depot. "It's a very difficult market," Mr. Williams said. "Rona and Home Depot are so well positioned now . . . They're really duking it out."

Home Depot has 120 superstores here while Rona has 530 outlets of varying sizes.

Sylvain Morrissette, a spokesman for Rona, said he couldn't comment on rumours. But he insisted that Rona has developed a strong strategy to ensure its future.

Rona differs from Home Depot in that it has a wide array of store types, from uber-sized big boxes to small outlets. Lowe's may only be interested in Rona's superstores.

The rumours about Lowe's possible arrival in Canada have created a buzz in the industry. One retailing source said he had heard that Lowe's representatives have tied up as many as a dozen sites for its mega-outlets, and that is has set up a Canadian office. It is expected that the first stores will be in Southern Ontario by next year.

Real estate officials said Michael Goulais and Alan MacKenzie of M. Goulais Consultants in Toronto have been meeting with them to discuss locations for a U.S. retailer entering Canada. "They are producing letters of intent," one official said.

Reached this week, Mr. MacKenzie did not comment on whether he and his partner represent Lowe's and are trying to find store locations for the retailer.

One real estate source said Mr. MacKenzie expressed interest in some of his company's locations, and he is waiting to hear back about offers for the sites.

"We've been told it's an existing American organization that's looking for anywhere from 10 to 15 acres," the source said. "There's not that many, even in the States, American guys that take that size unit. Most of the ones that do take it are already here."

U.S. discounter Target Corp. has also been interested in coming to Canada. But Target CEO Bob Ulrich said last month [May] that it has no immediate plans to expand outside the United States.

Roger Plamondon, regional operations manager for Eastern Canada at Home Depot Canada, said he has heard the rumours about Lowe's but "for us, it's business as usual . . .

"We have been in Canada for 11 years. We are very proud of our performance in Canada. We know the Canadian marketplace very well," Mr. Plamondon said.

Lowdown on Lowe's

In 60 years, Lowe's has grown form a modest collection of North Carolina hardware stores to a megastore chain that rang up $36.5-billion (U.S.) in sales last year.

The big box

Employees: 160,000 (80 per cent of them full-time)

Outlets: 1,100 in 48 U.S. States

Typical store: 117,000 square feet of retail space, selling about 40,000 products

The foundation

Began in the mid-1940s after H. Carl Buchan bought out his brother-in-law James Lowe and rode the postwar boom with a modest chain of hardware/lumber stores. In the 1980s with the rise of do-it-yourself, it evolved into full-fledged building centres.

The design

Make old stores feel like new - spent $500-million (U.S.) last year to upgrade stores and plans to invest $700-million this year.

The big three

Lowe's three-pronged sales strategy:

1-Installations (such as cabinets and decks)

2-Special orders (up to 500,000 items, such as fashion plumbing)

3-Commercial business customers.

The nuts and bolts

Company went public in 1961.

Joined NYSE in 1979 (NYSE: LOW)

Reached billion-dollar-annual-sales mark in 1980.

Over the past 10 years, results have risen steadily - for fiscal 2004, profit reached $2.18-billion on sales of $36.5-billion, 18% better than 2003.

Average customer transaction $63.43 in 2004.

The rivals in Canada

Home Depot, the Atlanta-based chain that entered Canada 11 years ago, has 120 superstores.

Rona, based in Boucherville, Que., has 530 stores of varying sizes.

warrenmark Jun 2, 2005 10:23 AM

I wonder whether miketoronto will post in this thread?

Mike K. Jun 2, 2005 1:51 PM

It's odd there's no mention of Home Hardware in the article. They're a big player in this country and an ankle biter for Rona.

habsfan Jun 2, 2005 2:36 PM

I guess in terms of sales, Home hardware doesn't come close to Home Depot and Rona's numbers!?!?!

duper Jun 2, 2005 2:52 PM

I live not too far from a Canadian Tire, which is next to a Home Depot, which is Next to a Rona. Whenever I need anything, I always visit them in that order. I've got to stop doing that because Canadian Tire and Home Depot constantly disappoint me--they never have what I'm looking for. I need to start going just to Rona.

Rona is awesome.

RWin Jun 2, 2005 2:55 PM

I live not too far from a Canadian Tire, which is next to a Home Depot, which is Next to a Rona. Wait a minute, do we live in the same town? Its getting to be that I don't have to travel. Everything is the same (I can barely tell the difference between Canada and the States these days).


Saska2ntown Jun 2, 2005 2:57 PM

I'm tired, hungover, and horny... so fuck it...I'm posting this article.

Stonegate huge retail gamble

Gerry Klein
The StarPhoenix

Wednesday, June 01, 2005

The game, folks, is Saskatoon stud. The pot consists of a $40-million power retail centre, a $10-million to $14-million overpass and -- from those reluctant betters along Eighth Street, Broadway Avenue, in Riversdale and in the downtown -- the potential for retail districts to become as cold and bleak as (horror of horrors) Regina's downtown after hours.

All eyes are now on First Pro Shopping Centres, the developer proposing to turn 41 acres of field and pond south of Circle Drive and east of Clarence Avenue into a regional retail centre called Stonegate, which would be anchored by a Wal-Mart and contain a collection of smaller stores.

Most of the councillors have already shamelessly shown their cards. About half are ready to roll over to the Vancouver developer's desire for a development just a little sweeter than one now in existence in the city's northeast.

Preston Crossing was Saskatoon's first comprehensive big-box retail development. When it was proposed, businesses along Eighth Street, in existing malls, in the downtown and on Broadway expressed fear they would be unable to compete. The council of the day agreed to let Preston go ahead, but insisted the development be phased in, with retail studies done before building continued to be sure there was no damage to the city's existing industry.

Preston Crossing also had strict controls -- set out in a zoning law referred to as a direct control district (DCD3) -- which insisted 63 per cent of the 47-acre plot be big-box stores of at least 100,000 square feet and most of the remainder be stores greater than 10,000 square feet. The developer is now looking to complete Preston Crossing's third stage with those smaller stores.

First Pro initially insisted it wanted to set its own rules, but city hall balked. Councillors sent administrators back to the drawing board, where they came up with a compromise limiting the big box to 50 per cent of the site and allowing First Pro to build nine smaller stores. The return on smaller stores is greater for the developer, and First Pro insisted it needed more small stores in order to pay its $2-million share of a new overpass at Circle and Clarence.

Representatives of the city's vibrant retail sector warned that allowing First Pro to have more small stores would snowball, as Preston Crossing would demand equal treatment, and a third so-called "power centre" development -- this one on a 32-acre, city-owned site on the west side -- would also need small stores to compete.

In fact, when Preston Crossing's third phase is added to First Pro's Stonegate development, the city's west-side site and a new retail expansion planned for University Heights, Saskatoon potentially has 1.3 million square feet of new retail space coming on stream in the next five years -- more than a third of the size of the West Edmonton Mall, a development that dealt a severe blow to that much larger city's downtown.

Saskatoon, unlike the Alberta capital, is going through a period of modest growth at one per cent a year.

So here are First Pro's betting choices: go back to its original position that it alone should determine the rules for development; go with the compromise it reached with city hall for a deal just slightly sweeter than Preston Crossing's; hedge its bets by asking for some smaller stores (that is, seven instead of nine); or take the safe route, ask for the DCD3 zoning deal the city has already agreed to for Preston Crossing and be assured of a successful vote?

As of Tuesday, the die has been cast (pardon the mixed metaphor). First Pro is going for the controversial proposal for nine small stores. It will likely garner support from half of council, and bet the majority won't be swayed by the existing retail representatives, who are now able to lobby relentlessly all month, pointing to the dangers of the West Edmonton Mall and the spectre of Regina's downtown.

The question is will councillors see the big (1.3-million-square-foot) picture or focus on the short-term development? It's an all or nothing gamble. If council votes down its own bylaw, it will have to start over from scratch.

circle33 Jun 2, 2005 3:08 PM

/\ wrong thread, buddy, but...

Does a city of less than 250k need three power centers?

big W Jun 2, 2005 3:44 PM


circle33 Jun 2, 2005 3:48 PM

I didn't think so.

WhipperSnapper Jun 2, 2005 3:48 PM

"I live not too far from a Canadian Tire, which is next to a Home Depot, which is Next to a Rona."

I live not too far from a Rona, Canadian Tire, Rona sandwich

malek Jun 2, 2005 5:36 PM

Rona has everything, ever seen their hilarious ads?

loose translation:

"Looking for your husband?"



duper Jun 2, 2005 5:57 PM

Never saw those ads. Must be a Quebec thing.

I read somewhere that Rona is actually beating Home Depot in the Canadian market. I would believe it-- they're excellent.

malek Jun 2, 2005 6:08 PM

yes they're in french, either on bill boards or on TV.

miketoronto Jun 3, 2005 4:40 AM

My views.

Chain retail is really getting boring. I was just in Detroit. And in the mall I was in, I think there was maybe 5 stores in that entire mall that I did not have back home in Canada in the mall near me.

Going to the USA use to be a different experience, seeing the different stores, etc.
Now it is almost all the same as in Canada. Kinda boring if you ask me.

Second. I don't get the obsession with Target. Yes I am obsessed with certain stores when I visit the USA, like Marshall Fields.
But Target. Come on, it looks just like ZELLERS, and sells the same crap we get at home already. They sell cleaning stuff, and cheap clothing. I just don't get the obsession with Target, when it is no different then a WOOLWORTHS or ZELLERS. Just don't get it when people in Toronto make weekend trips to go shop at Target. ITS A ZELLERS WITH A DIFFERENT NAME. My mom agrees with me to about that.

Third. Canadian cities better shape up when it comes to protecting the core city shopping districts. We have come far with protecting and nuturing our downtowns in the face of suburban malls. It would be a shame for our downtowns to lose out now, like that article on Saskatoon, etc.

But really I wish we could ship out some of the American chain stores and nuture home grown chain stores(if we must have chains in every single place). Because the selection now between the USA and Canada is very slim. Soon there will be no need to even go to the USA for a slice of something different.

And the European chains are no better. H&M, MANGO, ZARA. Soon there will be no need to visit Europe. Because all their stores will be in the Eaton Centre anyway. I will admit I have bought pants from ZARA($120.00 buck pants down to $30.00. Had to buy). But still, lets nuture some Canadian stuff for once, again.

Canada use to have such a proud retail history and unique stores. Now that is almost all gone.

Some interesting notes though.

Le Chateau manufactures something like 50% or 60% of their clothing in Canada.

Hudson's Bay Company the oldest corporation in North America, is totally redoing their downtown stores now, to make them more classy and bring them back to the 50's heyday attractions they once were in many of our cities and still are to some extent. So far the renovations at the downtown Toronto store are amazing.

harls Jun 3, 2005 1:23 PM


Originally Posted by miketoronto
My mom agrees with me to about that.

That's all I had to hear.

CorporateWhore Jun 3, 2005 1:46 PM

well if mike's mom says so, it has to be true.

hackunion Jun 3, 2005 2:49 PM


Originally Posted by miketoronto
Soon there will be no need to visit Europe.


harls Jun 3, 2005 2:51 PM

What I really want to know is why Target isn't good enough to be CAPITALIZED.

MTL-514 Jun 3, 2005 3:50 PM


Originally Posted by miketoronto
H&M, MANGO, ZARA. Soon there will be no need to visit Europe. Because all their stores will be in the Eaton Centre anyway.

although it is not a widespread phenomenon, there is still a dying breed of travellers out there who actually go to europe for reasons other than their selection of chain stores.

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