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King Street Food Co. Expanding Buca Restaurant Brand

By
Mario Toneguzzi
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Future Yonge & St. Clair Buca (Image: King Street Food)

King Street Food Company is expanding its premier Buca brand of rustic Italian fare to two new locations in Toronto in 2018.

Peter Tsebelis, partner and managing director of King Street Food Company, says the brand will open locations at Yonge & Eglinton and Yonge & St.Clair. Stan Vyriotes and David Wedermire of DWSV Remax Ultimate Realty Inc. represented King Street Food in the deals. 

“We have identified two thriving neighbourhoods that are a perfect fit to grow the Buca brand,” says Tsebelis. “We look forward to drawing inspiration from our new surroundings in order to build community-specific concepts that we hope will become the fabric of the area.”

The first Buca Osteria and Enoteca location opened in September 2009 on King Street. In 2014, Bar Buca opened right across the street which operates seven days a week from 7 a.m. until 2 a.m. Also in 2014, a Buca Osteria was opened at the Four Seasons.

Photo: King Street Food Company

Earlier this year, it was announced that Buca Vaughan would open in three years.

Chef Rob Gentile, partner and culinary director of King Street Food Company, designs and curates the food programs for the brand.

Tsebelis says the Yonge & Eglinton location, an expanded Bar Buca, will be open in the Spring of 2018, and it will serve as an all-day Italian-inspired bar and café with a focus on small,  seasonal dishes, specialty coffee, pastries and a crafted cocktail list of Italian classics. It will also have an extended homemade gelato offering, new pizza menu and takeaway service.

Photo: King Street Food Company

A new restaurant and Buca concept at Yonge & St. Clair will open in late 2018. Tsebelis says it will be tailored specifically for the neighbourhood and it will serve as a dining spot for building tenants and the surrounding community.

“In the spirit of the Buca brand, these new locations will embrace and enhance the community energy by providing quality food and beverage, warm hospitality and a balance of old world and new,” says King Street Food Company of the new locations.

Tsebelis says the key to Buca’s success is the quality and unique offering of food that it brings to customers – focused on “the approach and philosophy that Italians bring to cooking which is simple, integrity and ingredient driven.”

Offering a classic Italian experience of hospitality in both food and drink is what has driven the success of the brand.

Tsebelis says there are plans for more locations in the future and the brand could even move into other cities.

King Street Food Company was founded in 2006 by Tsebelis and Gus Giazitzidis.

Their portfolio includes Jacobs & Co. Steakhouse (2007), Buca, the first Jamie’s Italian in North America at Yorkdale Shopping Centre (2015) and Jamie’s Italian Square One (2016), french-influenced La Banane (2017) and CXBO Chocolates (2015).

*All photos are via Buca’s website, and the top photo is of the future Yonge & St. Clair Buca location. 

BRIEF: Deciem Lands in Vancouver, COS Opens in Laval, Holts Expands Yorkdale Boutiques

By
Craig Patterson
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Deciem Launches Vancouver Expansion: Self-proclaimed “Abnormal Beauty Company” Deciem is opening stores worldwide, in an effort to enhance brand awareness. Part of the strategy is to open multiple locations in each city it enters in order to be seen by a wider variety of potential consumers.

The strategy appears to be working — Deciem is gaining a cult following in cities like Toronto, where it launched its first store in the summer of 2016. Deciem now has seven stores in the Greater Toronto Area, including urban street front, in a mall (Square One), in the Financial District, and even a massive space in Toronto’s Distillery District, which is worth checking out if you’re in the area. 

Construction signage recently went up for Deciem to open at 408 Howe Street at West Hastings Street in downtown Vancouver, in a small retail space that has housed retailers in the past including Cartier, Alfred Dunhill, and beauty brand Euoko. Another location is also confirmed to be opening soon at Metropolis at Metrotown in Burnaby, and sources say more Deciem stores are on the way for the Vancouver area. 

Stan Vyriotes and David Wedermire of DWSV Remax Ultimate Realty Inc. represented Deciem in five of its Toronto lease deals, as well as for a handful of international deals. 

COS Opens 6th Canadian Store at CF Carrefour Laval: H&M’s upscale sister brand COS (stands for ‘Collection of Style’, which just marked two years of business in Canada, has opened its 6th Canadian store at suburban Montreal’s CF Carrefour Laval. The attractive minimalist space features the brand’s collections for men, women and children. 

The store is one of Canada’s largest for COS, spanning almost 7,200 square feet over one level. 

COS launched its first Canadian store in September 2015 in Toronto at 85 Bloor Street West (former Tiffany & Co. space), followed by a second store in October of 2015 at 1310 Sainte Catherine Street West in Montreal (formerly occupied by Le Chateau). A store at Toronto’s Yorkdale Shopping Centre opened in October of 2016 and in March of this year, COS debuted its first Vancouver store at 18 Water Street in Gastown. Most recently, the brand opened at Square One in Mississauga over the summer. 

NEIGHBOUR Expands into Toronto: Upscale Vancouver-based retailer NEIGHBOUR has opened a Toronto location in the city’s affluent Yorkville neighbourhood. The independently owned and operated boutique includes menswear, accessories and books from around the world. 

It’s a bit off the beaten path at 126A Davenport Road at the corner of Belmont Street, away from Yorkville’s typical luxury streets such as Yorkville Avenue and Bloor Street West.

The minimalist retail space includes some pricy luxury brands for men including Marni, Comme des Garcons, Stone Island and others. The store is two levels and includes a cozy basement featuring edgy luxury clothing.

The retailer launched in Vancouver several years ago with a men’s store at 12 Water Street in Gastown, followed by a standalone women’s shop at 45 Powell Street. 

Mastermind Toys Opens in Millionaires Row: Popular Canadian toy retailer Mastermind Toys has just opened in Toronto’s Rosedale area, at 1133 Yonge Street. The 3,414 square foot store is situated at the southeast corner of Yonge St. and Shaftesbury Ave., just north of the Summerhill LCBO, and is the company’s 60th location to date. 

Some of the wealthiest families in Canada live nearby in neighbourhoods including Rosedale, Forest Hill, South Hill Summer Hill. It’s a smart move by the company that has been opening several stores per year for the past several years, with tremendous success. 

Mastermind Toys was founded in Toronto 1984 by brothers Andy and Jon Levy, who wanted to offer shoppers a classic toy store experience. Its first location measured only 300 square feet, selling children’s software and home computers. It carries thousands of educational toys, books, games, arts and crafts, puzzles and science kits. The Levy brothers partnered with Birch Hill Equity Partners in 2010, facilitating the company’s national expansion.

Zadig & Voltaire Opens 1st Canadian Boutique at Yorkdale: It’s official, Paris-based fashion brand Zadig & Voltaire has opened its first standalone Canadian boutique at Toronto’s Yorkdale Shopping Centre. The 2,000 square foot space is located in the mall’s Nordstrom-anchored expansion wing. 

A second store will open this fall in Montreal’s Westmount area, and Jeff Berkowitz of Aurora Realty Consultants represented Zadig in that deal, as well as for any future deals. Montreal-based Axxys Construction is building both stores. 

Moose Knuckles Opens 1st-Ever Store: Montreal-based outerwear and fashion brand Moose Knuckles has opened its first store at Toronto’s Yorkdale Shopping Centre. The unique retail space was designed by award-winning Toronto-based Burdifilek, and we’re awaiting more photos of the space to profile in a separate article, likely next week. 

DWSV Remax Ultimate Realty Inc.‘s David Wedemire and Stan Vyriotes represented Moose Knuckles in the lease deal with Yorkdale’s landlord Oxford Properties Group, and prominent retail consultant Andrea Elliott of r2 retail resources acted as advisor for the store’s retail portfolio. 

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Retail Insider to Launch ‘Pop-Up’ Briefs: Temporary retail spaces are hotter than ever, as retailers and landlords aim to activate spaces and to create experiences. Some of the pop-up spaces opening in Canada are newsworthy, and we’ll be doing periodic ‘Briefs’ discussing some of these, beginning next week, in partnership with pop-up go — an online platform that helps pair retailers with available temporary retail spaces, which also features a curated pop-up match service that provides access to the ever-growing pipeline of pop-up seekers looking for space. 

Holt Renfrew Yorkdale Continues Adding Boutiques: Holt Renfrew’s Yorkdale Shopping Centre store in Toronto is seeing some renovations in certain departments that, when finished, will make the store even more interesting. Last week, we discussed the new Miu Miu accessories boutique which launched with a walk-through handbag — and across from it, Italian luxury brand Loro Piana has opened an accessories boutique beside the store’s escalators. Loro Piana is pushing into Canada in a big way, which makes sense — it’s one of the country’s top-selling luxury brands, known particularly for its cashmere designs. As well, Chanel is expanding its Yorkdale boutique, having taken over small retail spaces formerly occupied by Roger Vivier and Michael Kors accessories — Chanel Yorkdale’s expansion is expected to be unveiled in about a month (the massive Yorkville flagship opens next week, stay tuned). And men in Toronto should know that Fendi will open a standalone men’s concession at Holt’s at Yorkdale this fall — the first of its kind in Canada, with details to follow. 

Retail Insider will now be regularly including these briefs as part of our expanding reporting mandate. For more information, contact Editor-in-Chief Craig Patterson at: craig@retail-insider.com. 

For more of today’s retail news, visit: Canadian Retail News From Around The Web: November 9, 2017

Sears Canada Tarnishes the Gold Standard of Pensions

By
Retail Insider
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Michael J. Armstrong, Brock University

Like many department stores, Sears Canada has struggled with competition from specialty stores and online retailers. Its bankruptcy will eliminate some 12,000 jobs and leave 16,000 retirees worried about their pensions.

It’s just the latest signal that employees and regulators should rethink their approaches to defined-benefit pensions.

Pensions are promises

Pensions represent deferred wages, money promised to employees in the future. With defined-contribution plans, employers make short-term promises to invest each year in their pension accounts. The eventual pension cheques depend on how the investments perform.

With defined-benefit plans, employers also promise to invest more if investment returns are poor. That reassurance makes those plans the “gold standard.”

However, such top-ups may be needed decades after the promises were made. If you start work at 25 and retire at 65, your first pension cheque arrives 40 years after your first paycheque. That very long-term promise presents two risks for employees.

Funding shortfalls

First, the money might not be there when needed. Defined-benefit plans should pay better than defined-contribution plans during recessions. But that’s when employers are least able to invest.

For the private sector, 40 years is roughly six economic cycles of boom and bust. Will your employer survive that?

Consider Sears. Its retirement funds are short $308 million, forcing a 19 per cent pension cut. That may be partly replaced if liquidation sales go well.

(Incidentally, consulting firm Morneau Shepell now administers the impoverished plan. That indirectly connects federal Finance Minister Bill Morneau’s name to another pension controversy.)

Or look at ex-telecom Nortel. Its 2009 bankruptcy cut pensions 30 per cent. Twenty thousand pensioners waited eight years to see how much might be restored. That’s not very “defined.”

Unfortunately, pension underfunding is common. In Ontario, single-employer defined-benefit plans are short $37 billion in total. Only 18 per cent are fully funded. Those numbers exclude plans serving multiple employers, like the Ontario Municipal Employees Retirement System.

Total obligations and assets for single-employer defined-benefit pension funds in Ontario. The gap between the lines represents the overall funding shortfall. Data is from https://www.fsco.gov.on.ca/en/pensions/actuarial/Pages/solvency-funded-estimate-reports.aspx.

 

Public sector plans face other risks. Forty years is about 10 election cycles. Will all those politicians keep their predecessors’ promises?

They didn’t in Detroit. To escape bankruptcy in 2014, the city cut pensions by 4.5 per cent. Some cuts were retroactive – retirees had to give money back.

And they didn’t in Rhode Island. In 2011, that state had only 56 per cent of the pension money needed. To avoid disaster, it reduced retirees “defined” benefits.

Transient employees

The second risk with defined-benefit pensions is employee turnover. Plans typically calculate payments based on age and years of service. If you work there longer, you’ll receive more.

But quitting sooner gets you less. Depending on where you work and how long, you may get only your contributions back, plus interest. In effect, the defined-benefit plan becomes a defined-contribution one.

Or you’ll receive a deferred pension based on your salary when you quit, say at age 35. That’s likely much lower than your final salary 30 years later at age 65. So, it’s “defined” smaller.

Defined-benefit pensions are nicknamed “golden handcuffs.” They penalize people who switch employers.

But people do switch. Professionals change companies for career advancement. Temporary workers struggle from contract to contract.

Half of U.S. workers have been with their current employer less than 4.2 years. For those aged 55 to 64, 14 per cent have been there less than two years. That jumps to 38 per cent for those 25 to 34. For them, defined benefits are no better than defined contributions.

I’m not suggesting employees should abandon defined-benefit plans. They’re great if employers and employees are stable. But they aren’t risk-free, so some unions might consider bargaining for other benefits instead.

Government action needed

Meanwhile, governments should increase pension protections. For example, Ontario’s Pension Benefits Guarantee Fund will soon protect up to $1,500 of monthly pension payments. Other provinces should follow suit.

Unfortunately, Ontario is also letting pension funds become 15 per cent underfunded before requiring employer top-ups. Currently, 58 per cent of plans fit that category. That allows employers to ignore temporary investment downturns. But it also risks greater shortfalls during bankruptcies.

Sears pensions are 19 per cent underfunded, despite the company making top-ups. Imagine a future company bankruptcy with 19 per cent underfunding below the 15 per cent allowance. Retirees would lose 34 per cent of their pensions.

The federal government should also act. It could ban dividend payments whenever pensions are underfunded. Some corporate loan agreements already contain similar restrictions. That could have helped Sears workers.

Bankruptcy laws need updating too. Current rules first pay off secured debts, like mortgages. Underfunded pensions are considered unsecured debts. They get paid last with whatever money is left.

A Bloc Québécois proposal would put pensions before secured debts. As an employee, I find that tempting. But as a business professor, I think it’s extreme. Instead, I prefer the NDP proposal to make pensions equal to secured debts. That would improve pensioners’ prospects while respecting mortgagees’ rights.

The ConversationThe Liberals advocated for similar changes while in opposition, and federal Innovation Minister Navdeep Bains says he’s open to discussions now. Is he open to action?

Michael J. Armstrong, Associate professor of operations research, Brock University

This article was originally published on The Conversation. Read the original article.

BeaverTails Turns To Outlet Malls For Growth

By
Megan Harman
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Photo by BeaverTails via Instagram

Iconic Canadian pastry brand BeaverTails is setting out to grow its presence in Canada and abroad, and the brand is targeting outlet malls as a key new avenue of growth.

BeaverTails specializes in quick-serve pastries and other desserts, as well as hot and cold beverages.

The chain of 136 locations has traditionally focused on positioning its locations in touristy areas such as ski resorts, amusement parks, beach towns and waterfront areas. Having already established a presence in most major tourist destinations in Canada, however, the company is now exploring other types of locations, such as outlet centres.

Photo: BeaverTails

“We are opening up a new avenue to development in Canada, which is outlet shopping malls,” says Kristina Zappavigna, development director at BeaverTails. “It’s not necessarily something that we were looking to develop, but we happened to open one and it did very well, and have continued to do so in a few other malls since then.”

Although traditional shopping malls haven’t provided a successful venue for BeaverTails in the past, outlet malls tend to attract a different type of shopper, Zappavigna notes.

“The outlet mall provides that impulse-driven customer, so that works well and speaks to our brand, because we’re such a treat,” she says. “So that works beautifully for us.”

So far, BeaverTails has locations at Toronto Premium Outlets, Tanger Outlets in Ottawa, Outlet Collection at Niagara and Philadelphia Premium Outlets in Pennsylvania.

The company also has plans to open a location at Premium Outlets Montreal in the near future, and is exploring more potential outlet mall locations in the U.S., including Pittsburgh and Florida.

Location is key for the company, according to Pino Di Ioia, CEO of BeaverTails.

“We are so impulse-driven that we need to be not just near the activity, but in the activity,” he says. Some of the brand’s most successful locations, Di Ioia says, include the store in the ByWard Market in Ottawa, the location on Queens Quay in Toronto, and the Banff store.

Saskatchewan is the only Canadian province in which BeaverTails does not have a location, and the brand is actively exploring opportunities for shops in Saskatoon and Regina, according to Di Ioia. In addition, the company is looking to expand its presence in Vancouver.

Photo: BeaverTails

BeaverTails is also looking internationally for growth. The brand currently has locations in Japan, the United Arab Emirates and South Korea, and is working on expanding to other markets, including France and Mexico.

“North American brands are coveted elsewhere,” says Zappavigna. “We happen to be one of those quintessentially Canadian brands that stick out.”

BeaverTails’ namesake product is a fried dough pastry that is stretched to resemble a beaver’s tail, and is available in nine different flavours. In recent years, the company has expanded its menu to include a variety of other items, including poutine, ‘BeaverDogs’ (a hotdog wrapped in a BeaverTail pastry), and ice cream.

“We offer all of the indulgence snacks that you could hope to eat,” Zappavigna says.

*Photos by BeaverTails via Instagram

France’s Optical Center Enters Canada with 3 Locations

By
Mario Toneguzzi
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Optical Center (Image: Optical Center)

Optical Center, an eye and hearing care store, is geared for big future expansion after opening three locations in the past year in the Montreal area.

Benjamin Blaise, director of development for the company in Quebec, says Optical Center is a company based in France with the first store opening in 1991. The company currently has 522 stores in seven countries – 90 per cent of them in France. The others are in Spain, Turkey, Switzerland, Belgium, Israel and now Canada.

The company plans to grow more locations in Quebec.

“We want to open a lot of stores – to franchise the concept of Optical Center,” says Blaise. “Right now we don’t have a good number to know how many stores will open. We want to make good on these three stores and after that probably open a lot of stores. In Quebec, we will have probably 40 or 50 stores (in the future).”

Optical Center

The next step after that could even include expansion outside of the province’s boundaries.

“The last store in Pointe-Claire is in the English part in West Island. We are trying a new concept with the English part. If this one works very well, maybe we think of moving West or maybe even south,” says Blaise.

The first Canadian store opened in LaSalle, Quebec followed by one in Montreal and then another in Pointe-Claire.

“All of them opened this year,” says Blaise.

Optical Center

Optical Center has opticians and optometrists as well as audiologists. It sells eye frames, lenses and contact lenses. About 12 years ago the company began to offer audiology services.

“Now we are probably one of the first stores in Canada with both parts hearing and eye care,” says Blaise.

Each of the three Quebec stores has opticians and optometrists based there. There is one audiologist for the three stores.

Blaise says the company has a great partnership with Construction Vergo – Mylène Hardy, Paul Belanger and Yves Ducharme – which allowed the concept to come to fruition.

“Paul went to Europe to see what exactly an Optical Center store is and what we exactly wanted for Quebec,” he says. “Mylène was my eyes and my ears during construction. It was so nice to have somebody who understood exactly what we wanted and being self-motivated.”

“It’s our first stores in North America and we wanted to share this adventure with someone who truly understands our concept store. Working with them was one of our best decisions.”

Optical Center
Optical Center

Hardy, Account Manager, Commercial Interiors Division with Construction Vergo, says the company was tasked with finding the right architects and engineers that would respect the concept and design of the stores which were already created in France.

“We needed to understand their concept and apply it to Canada,” says Hardy. “For example with the lights. We had to find an equivalent here in Canada to make sure that it was as per their spec and as per their needs. They have special needs for lighting . . .  We applied their design to our Canadian stores.”

Italian Luxury Brand Mr. and Mrs. Italy to Open 1st Standalone Canadian Boutique

By
Craig Patterson
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Mr and Mrs Italy Storefront

Pricey Italian luxury brand Mr. and Mrs. Italy will open its first Canadian store at Toronto’s Yorkdale Shopping Centre in December of this year, according to construction signage in the mall. Toronto joins a handful of cities globally to boast having a Mr. and Mrs. Italy store location. 

Mr. and Mrs. Italy was founded in 2007 in Milan and is known particularly for its parkas lined with fur detailing. Prices aren’t cheap — parkas are generally priced between about $2,000 and $6,000 each, with some approaching $10,000. The brand also features men’s and women’s ready-to-wear clothing and accessories, including collections of unique and expensive footwear that often features fur accents. 

The company initially gained awareness for its army green cotton parkas that are lined with rabbit, fox, beaver and mink. The vintage inspired shells and luxury fur design became a hit with celebrities, propelling the brand. The company says on its website that everything is made in Italy. 

(CLICK FOR INTERACTIVE YORKDALE MALL MAP)
(CONSTRUCTION SIGNAGE AT YORKDALE. PHOTO: CRAIG PATTERSON)

  • (PRICES ON WEBSITE IN US$)

The Yorkdale boutique will be located in half of the 2,930 square foot retail space formerly occupied by Birks (which relocated), across from a soon-to-open Ladurée boutique (Toronto’s first) and next to luxury brand Saint Laurent, as per the floor plan below. The former Birks space had originally been earmarked to become Canada’s first standalone Marc Jacobs store, though that’s since changed. 

According to its website, there are only eight standalone Mr. and Mrs. Italy stores in the world, in seven cities. There’s one store location in Milan — its flagship, as well as locations in New York City, Bal Harbour Florida (Bal Harbour Shops), Paris, Shanghai, Beijing, and Hong Kong, which has two stores. 

Yorkdale could now be considered to be Canada’s ‘parka central’ — Moose Knuckles opened its very first concept store last week in the mall’s Nordstrom-anchored expansion wing, across from the world’s first Canada Goose retail store that opened last year. Montreal-based Mackage is also located nearby, and Woolrich is about to open its first Canadian store across from Mackage. Moncler and Rudsak are known for their warm jackets as well, and there are plenty of other stores in the mall that carry outerwear including Holt Renfrew, Harry Rosen, Hudson’s Bay, Nordstrom, Sport Chek, Sporting Life, The North Face and others. 

*Top Photo: Mr. and Mrs. Italy at Hong Kong’s IFC Mall.

RONA Unveils New Store Prototype

By
Mario Toneguzzi
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Lowe’s Canada has launched its first new RONA store prototype in Longueil, Quebec as it embarks on a plan to roll out the new building centre model in 15 stores by the end of 2018.

Serge Éthier, Executive Vice-President of RONA Proximity, says the new RONA store concept was developed with three goals in mind: to better meet current needs and trends in renovation; to establish the store as its customers’ go-to destination for projects; and to enhance its offering for contractors and pros, who account for a larger portion of building centres’ client base than is the case for big box stores.

Lowe’s says its goal is to make RONA the No. 1 banner in the building centre market in the country – a segment of retail that accounts for close to half of Canada’s home improvement market.

Éthier says the stores that will be transformed are located across the country. They’re basically building centres ranging in size between 20,000 to 45,000 square feet. They usually include a drive-thru and a yard.

“So in the future, RONA is going to be dedicated to the building centre segment which accounts for more than 50 per cent of the overall renovation market in Canada,” says Éthier.

“We have a strategy for full remodel or minor remodel and we do have a strategy for greenfield. So new stores across the country . . . We already started this year with three new stores in Quebec and we’re in the market analysis throughout the country to where would be the best locations for us.”

RONA’s Longueuil store is located on Roland-Therrien Boulevard and the transformation to the new concept involves an investment of more than $2.6 million.

“Overall, the new RONA store model is designed to better reflect new trends in the residential housing market — open floor plans, brighter rooms, and outside spaces designed to become natural extensions of the interior. These trends are reflected both in the store layout and strategic placement of some departments, as well as in the product selection,” says the company. “

“The result is a brighter, less compartmentalized store, with racking entirely redesigned and not as tall, except on the perimeter of the store, which allows customers to have a 360-degree view of the store and thereby find the section they are looking for at a glance. In addition, seasonal products have been moved up near the entrance so the shopping experience is renewed on a regular basis, and household appliances now have a prime location near the kitchen project section.”

The company also says the new building centre model is designed to make RONA the go-to destination for turnkey renovation projects. Services will include design consulting, 3D renderings, as well as installation services.

For contractors and other home improvement professionals, there is a reserved parking area, a dedicated entrance and service counter, extended business hours to fit contractors’ schedules, a special fleet of trucks for construction-site deliveries, a minimum 15,000-square-foot drive-through lumberyard, and charge-account services to speed up and simplify purchasing.

“A big chunk of our overall spend from our customer is attached to projects. That’s why you go to a building centre because you have more associates, more knowledge inside the store. So we’re definitely trying to position ourselves more as a project destination in the future,” says Éthier.

“That remodel is also positioning us better to answer the pro in the future in that contractor segment.”

The RONA banner, created in 1939, falls under Lowe’s Canada with more than 430 stores across the country. Many of the big box RONA stores are being transformed in the country to the Lowe’s brand.

Lowe’s Companies Inc., based in the United States, serves more than 17 million customers a week in the United States, Canada and Mexico. It had $65 billion in sales in its fiscal year 2016.

Based in Boucherville, Quebec, Lowe’s Canadian business, together with its wholly-owned subsidiary, RONA inc., operates or services more than 600 corporate and independent affiliate dealer stores in a number of complementary formats under different banners. These include Lowe’s, RONA, Réno-Dépôt, Marcil, Dick’s Lumber and Ace. In Canada, the companies have more than 25,000 employees, in addition to nearly 5,000 employees in the stores of RONA’s independent affiliate dealers.

**Photos provided by RONA

The Grocerant: How Smart Grocery Stores are Becoming Hybrids

By
Retail Insider
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Sylvain Charlebois, Dalhousie University

Food trends are difficult to follow these days. Just like hip sectors like tech, the food industry is coming up with its own peculiar lingo when describing market shifts.

One of the latest examples is “grocerant,” a word combining “grocer” and “restaurant.” The term has been around for a few years, but it seems to have gone mainstream in recent months. Or at least it’s a term most of us will be hearing more often.

But as trendy as it is, the term “grocerant” is also in fact quite relevant and accurately captures what is happening in the food industry these days. In short, a grocerant is a grocery store that sells prepared meals, to either eat on site or take home.

The numbers are staggering. According to NPD Group, a research outfit in the U.S., grocerants generated 2.4 billion new visits and over US$10 billion in sales in 2016 — a massive shift.

Efforts to offer more convenience are resulting in numbers not seen since the drive-through phenomenon several decades ago.

In Canada, while the numbers are little more obscure, we are seeing similar trends. Many retailers are on the move.

Given that convenience seems to have more currency than ever before, two worlds are currently colliding in the ready-to-eat space at grocery stores, which caters to people seeking portable solutions to accommodate their hectic daily lives.

Grocerants offer a one-stop-shopping solution for consumers driven by either curiosity or a lack of time. An increasing number of grocery stores now allow customers to buy and eat on the spot. Some stores in Canada and the U.S., including several independents such as Longo’s and even larger outfits like Loblaw, Sobeys and Metro, deftly merge both food retailing and food service under one roof.

Grocery stores challenging restaurants

Research suggests many consumers generally perceive grab-and-go food products to be healthier than meals you can get at a restaurant. This works well for grocers.

Price wars constitute the other driving issue for grocers. Over the last 15 months in Canada, food retail prices have barely moved. But the price of food purchased at restaurants has increased significantly, more than double the general inflation rate.

This would suggest that menu prices are much more immune to market cycles than retail food prices. Demand in food service is inherently more inelastic, so margins can be kept up and defended in most cases, no matter what the economy is doing.

But restaurants aren’t staying quiet in the face of this new trend. Restaurant operators are fighting back by using technology to their advantage. Many are responding by using UberEats and other food delivery services, even expanding their market by offering meal kits and developing new ways to reach consumers.

In other words, they are trying to go where the money is instead of just waiting for the consumers to come to them.

Some say it’s all about millennials. It is indeed about offering fresh, healthy, reasonably priced products for the largest generation that is slowly taking over the economy.

Aging baby boomers have an impact too

But the changes are more deep-rooted, beyond just millennials. Millennials certainly have the economic influence to trigger the changes we’re seeing, but many demographics are behaving differently around food.

Families with older children like the enhanced grocerant experience, while aging baby boomers need the convenience. The appeal is across the board. Millennials were the first generation not willing to settle for what was being offered to them by grocery stores. The rise of the grocerant represents the awakening of an industry that’s been complacent for quite some time.

In the realm of the convenience factor that’s a critical part of the grocerant movement, the ready-to-cook market is also emerging as an interesting opportunity, but not without some headaches.

In the U.S., Blue Apron, the largest and best-known meal-kit provider in the world, is waging an uphill battle. The company has just laid off six per cent of its staff and its stock has gone nowhere since going public in June.

On the other hand, we’re seeing evidence that grocers like what they see from meal-kit outlets. Plated, the five-year-old American meal-kit company, was acquired last month by the grocery giant Albertsons, for approximately US$200 million.

Grocers do have the capacity to cover a broader market with their product offerings, but have not yet made much of a play on meal delivery and quality.

Grocery chains, in fact, are often not hardwired to successfully meet new challenges. But that’s slowly changing. Metro made a significant move this year by acquiring Miss Fresh, and many expect other grocers to follow suit.

In processing as well, Campbell’s Soup, Unilever and many others are investing in meal kits to explore what could become a US$10 billion industry by the end of next year.

It’s all a growth opportunity that cannot be overlooked by grocers. They’ll need to hire the right people, with the right mindset, in order to capitalize on these new opportunities. And because of changing consumer expectations and behaviours, survival seems unlikely for stand-alone meal-kit outlets.

The ConversationSo the convenience food battle is alive and well. Grocers were losing for a while, but the emergence of grocerants across the country is a sign that the industry is listening to what the modern consumer is telling them.

Sylvain Charlebois, Professor in Food Distribution and Policy, Dalhousie University

This article was originally published on The Conversation. Read the original article.

The Puzzling Probe into Canada’s Alleged Bread Cartel

By
Sylvain Charlebois
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Loaves of fresh-baked bread line the shelves at a bakery. THE CANADIAN PRESS/AP-Douglas C. Pizac

A bread cartel is alive and well in Canada. Or is it?

Canada’s Competition Bureau is investigating major grocery chains for evidence of retail price fixing.

Loblaws, Sobeys, Metro, Wal-Mart and other companies have acknowledged the ongoing investigation. The outcome of the inquiry will likely not amount to much, but it does raise the question: Why is bread is being targeted by the bureau?

Demonstrating beyond a reasonable doubt that grocers are colluding to keep retail prices artificially high is almost impossible. Several attempts have been made in the past, with mixed results.

The average grocery store carries well over 30,000 different products, and prices can be affected by an array of factors: Commodity prices, energy and labour costs, new food safety and packaging regulations among them. These and others factors can all influence price points in many categories more or less simultaneously. An intentional collusion to falsely inflate profit margins would be hard to prove.

Historically, bread prices have been quite stable, with the exemption of 2008 and 2009, when prices jumped almost 50 per cent in a single year for all bakery products.

On the whole — unlike prices for fruits, vegetables and even meat products — bread has been immune to fluctuating prices for some time. In fact, Canadians have access to the most affordable food basket in the world.

Canadian food prices are relatively low

After the United States, Ireland and a few other countries like Singapore, Canadians spend less on food relative to their income than most countries in the world.

Nonetheless, since we live so close to the United States, where food quality is generally questionable but amazingly cheap, we often believe our own food prices are unfairly high. Prices are indeed higher here than in the United States, but much lower than in many places around the world.

In the last month alone, food retail prices have dropped in Canada, including bakery products. So, to suggest that food prices are inflated in Canada is somewhat far-fetched. And if Canadian consumers are paying too much for bread due to price-fixing schemes, the evidence isn’t readily apparent.

At the centre of this investigation, however, is a much deeper problem that lies in the food supply chain.

For years now, grocers have engaged in an open war with food processors, with grocers trying to position themselves as protectors of the public interest by pushing vendors to lower prices in order to remain competitive.

For the past few years, tensions between grocers and vendors have been at an all-time high. Major grocers have demanded price cuts from suppliers, causing a domino effect on the entire industry.

Small grocers complain

So, it’s not surprising to learn that independent grocers, through an industry association, passed along their concerns to the Competition Bureau. Consumers have barely noticed the conflict. Until now, that is.

Almost by design, the Competition Bureau may be trying to communicate to the market that grocers are on watch for squeezing processors.

As a food staple, bread is an appealing target. The bureau could have selected any food product, but bread’s status as a staple makes it an obvious choice — a clear majority of Canadians eat bakery products almost daily and, as a result, its price is an ongoing concern.

Everyone loves bread. That’s why Canada’s Competition Bureau might have chosen it to make a point to big grocers about their treatment of food processors.
(Shutterstock)

It was chosen for a reason: To make an otherwise dreary, obscure, supply-side issue more imperative to the daily lives of consumers.

Publicly traded companies extorting each other is less of a political or PR concern than allegations that grocers are allegedly gouging consumers. The investigation will likely not yield material results, but bread is clearly the best medium through which the bureau can send its message.

It’s not likely any grocer will be accused or arrested any time soon, but the Competition Bureau investigation could potentially restore peace within the food industry family.

Probe could bolster the food sector

A vibrant food sector is not possible without a strong food-processing sector, and making sure all make a decent profit within the food industry is difficult.

Nonetheless, consumers can only benefit if all sectors, from farm to table, succeed over time: we end up with a greater variety of decently priced, high-quality, innovative food products. Ultimately, and without sending anyone to prison, this investigation could strengthen the food sector.

Grocers know better than to engage in a doomed strategy of quotas and illegal price-setting activities. The mere spectre of a grocery cartel would not only be bad business, it threatens to tear up the social contract with the Canadian public that they adhere to every single day.

Consumers can expect to see deals being made within the industry in the days ahead.

The ConversationFood shoppers will almost certainly experience rebates in the bakery section as grocers rush to reassure their customers that a bread cartel in Canada is nothing more than a myth.

Sylvain Charlebois, Professor in Food Distribution and Policy, Dalhousie University

This article was originally published on The Conversation. Read the original article.

Inside Yorkdale’s Impressive 70,000 Square Foot RH Restoration Hardware Gallery [Photos]

By
Craig Patterson
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Restoration Hardware Exterior at Yorkdale Shopping Centre

RH, aka Restoration Hardware, opened its massive four-level Toronto Yorkdale Shopping Centre flagship last week, and the space is impressive. The store looks like a spectacular mansion, with indoor and outdoor retail spaces, a courtyard café, Interactive design atelier, and rooftop conservatory/park. 

The flagship spans a total of almost 70,000 square feet of interior and exterior space, including entire floors dedicated to RH Interiors, RH Modern and RH Outdoor. This store also includes an interactive Design Atelier, offering professional interior design services in a studio environment.

“The vision for our new design galleries has been to blur the lines between residential and retail, and create spaces that are more home than store. The next logical step was to further blur the lines between home and hospitality, with an integrated restaurant, wine and coffee bar,” says RH Chairman & CEO Gary Friedman.”What we are doing goes far beyond attaching a restaurant onto a store – that’s been done before. What’s unique is we’ve created a completely integrated hospitality experience, led by famed Chicago restaurateur Brendan Sodikoff, that reflects our taste, style and point of view. We’re proud to bring this first-of-its-kind concept to Toronto, one of the most metropolitan cities in the world,” he said. 

Mr. Sodikoff is the founder, CEO and creative director of rapidly growing Chicago-based restaurant group Hogsalt Hospitality, which now boasts 14 concepts and 15 locations. 

RH Yorkdale’s initial design was by architect James Gillam of Backen, Gillam & Kroeger, and Toronto-based architectural firm Quadrangle completed the drawings, coordinated final design details, obtained city approvals, oversaw construction and ensured that the RH brand goals and design concept was faithfully executed in the final building.

The following is a brief description of the store, floor-by-floor:

Ground Floor: Glass-and-steel French doors open onto a streetscape with Boston ivy, geometric topiaries and towering trees rising out of a continuous boxwood hedge. The gallery’s eastern entrance, accessed from within the mall, features a terraced façade of Venetian plaster and a lush interior courtyard flanked by open-air loggias that act as the central location for the gallery’s Courtyard Café. The restaurant includes banquette seating layered with green velvet boxwood hedging, cascading English ivy, trickling fountains, glimmering lanterns and 19th C. Rococo crystal chandeliers. 

The store’s central hall, with impressive 14-foot ceilings, leads to the RH Barista Bar – a focal point that features a Tuscan colonnade and facet-edged limestone slabs. Fresh house-made doughnuts and pastries are among the offerings. 

Barrel-vaulted passageways lead customers to a classical arrangement of rooms featuring RH Interiors collections from internationally renowned artisans and designers — it’s like walking from room-to-room in an impeccably decorated residence. 

Second Floor: The RH Design Atelier is a 5,000-square-foot studio anchored by four, 15-foot custom tables that offer a fully integrated workspace for customers, designers and architects to design spaces both  inside and out. A trained team of staff has access to RH’s vast library of fabrics, leathers and furniture and lighting finishes. The Design Atelier also includes a Ben Soleimani rug showroom displaying the designer’s hand-knotted and hand-woven rugs, as well as various other specialized galleries for window treatments. Bed and bath linens and bath hardware can also be found on the second floor. 

Third Floor: A 12,000-square-foot exhibition space, called RH Modern, is one of the world’s largest curated and fully integrated assortments of modern furnishings, lighting and décor under one brand. The aesthetic is minimalist, with glass and steel French doors paired with Juliet balconies that line the perimeter of the floor.

Fourth Floor: At the top of the grand stairway is the ‘Conservatory and Rooftop Park’ — an impressive 12,000-square-foot garden space with towering banana palms, heritage olive trees, exotic succulents, and 20-foot ceilings. The indoor space opens onto a rooftop patio featuring mature Himalayan birch trees set within colossal steel planters accented with cascading English ivy. Open-air pavilions, chandeliers and trickling fountains can be found among vignettes of RH Outdoor collections, and there’s even a view of the CN Tower and Toronto skyline when looking southward on a clear day. 

(FOURTH FLOOR) 
(FOURTH FLOOR EXTERIOR TERRACE, WITH VIEWS OF DOWNTOWN TORONTO) 

Overall, the space is very impressive and Yorkdale’s RH Gallery is worth a visit for anyone living or visiting the Toronto area. There’s nothing quite like it, and Yorkdale’s new Sporting Life store, which also opened a couple of weeks ago, is another beautiful new retail space in Canada’s most productive shopping centre. 

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