Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.
WLKN, a Quebec based fashion retailer, will be adding three to four new locations this year and has plans on expanding throughout Canada with a goal of 12 locations within three years. After a recent decline in sales, the company is being careful about expansions, but still sees opportunities with landlords.
“We are still looking to open more locations, but it has been a very tough year business-wise,” says Pierre-Olivier Mercier, the CEO of WLKN. “The retail environment has been challenging, and we have seen a significant drop in sales. Despite this, we are working on securing deals with landlords to make new expansions feasible. We are currently negotiating for three to four new locations this year, with a goal of opening 12 stores across Canada within the next three years. We are focused on making strategic decisions to ensure our growth is sustainable.”
Expansions
WLKN Boutique Place Rosemere (Image: Oakmont)
The first few new locations for this year will be in Toronto, Alberta, and Vancouver. After these first locations, the brand will be opening six a year to meet its goal. Exact locations are unknown right now but will be available at a later date.
“We want to see if we are able to find good locations with good deals with the landlord, and if possible to have a group of locations in Alberta and Vancouver. We are currently working on these negotiations and have already started on the Western expansions. During the next two to three years, we would like to open 12 locations from Toronto to Vancouver. Once a deal is done, we can move pretty quickly.”
In addition to Western Canada, the brand is also looking at expanding on the East Coast leaning towards New Brunswick and Halifax. Currently, WLKN does not have any expansion plans set for Quebec.
As the brand continues to expand, Mercier says they are looking for mall locations ranging from 22,000 square feet to 3,500 square feet.
New store design and online shopping experience
WLKN Boutique Place Rosemere (Image: Oakmont)
In addition to opening new locations, WLKN is also planning on redesigning stores for its existing locations in Sherbrooke and other locations by 2025.
“We will redesign as our current design now is about ten years old, so we will bring a fully new design to customers by Spring 2025. Our Sherbrooke location and other locations are part of this plan. We are aiming to create a modern and engaging shopping environment that meets the expectations of our target demographic, which is primarily between the ages of 15 to 35.”
To maintain loyalty and to attract new consumers, Mercier says he wants to ensure the brand continues to reflect the latest trends and offers a unique shopping experience. The brand is looking to give locations a fresh, contemporary look: “These designs are not just cosmetic, they are part of our strategy to stay competitive and attract more foot traffic to our locations.”
Mercier says the brand will also be enhancing its e-commerce platform to provide a more seamless shopping experience for consumers who shop online. The new e-commerce refresh includes integrating inventory across all locations which will allow consumers to have more options and better availability of sizes, colours, and styles.
“We are still focused on customer service based, human to human interactions, but we have updated our website. So every customer who shops online will have more options now. But in store, we still like focusing on customer service. We still think that most of the physical retail part is still the customer service, and sadly, I think it is something that is lost but that is why are are trying to keep it strong in our locations.”
The company was founded in 2010 and provides a variety of streetwear clothing for men, women, and youth. The brand also carries a selection of accessories and jewelry. The first expansion into the Ontario market was in 2016 and because of economic pressures, have been struggling with sales, but will refresh the brand and expand to raise success.
“Right now, we are trying to survive. I think economically in Canada, we are not in good shape and I think it is just going to get worse. We are trying as much as we can to be online, on Instagram, TikTok, and Facebook to raise awareness and we try to work with influencers in Toronto and Montreal, but we are very careful about everything we are doing. We want to expand more because we think we will get a better deal. But, we are very careful about everything because business is very tough this year.”
Retail giant Sleep Country Canada is being acquired by a wholly-owned subsidiary of Fairfax Financial Holdings Limited in a $1.7 billion deal.
Christine Magee
“We have concluded that this transaction is in the best interests of Sleep Country and is fair to our shareholders. Following a comprehensive assessment and our extensive negotiations with Fairfax, we are pleased to have reached an agreement that provides certainty of significant and immediate value to shareholders,” said Christine Magee, Chair of the special committee of independent directors of Sleep Country that oversaw the negotiation of the transaction, in a statement.
In a news release, it was announced that Fairfax will acquire all of the issued and outstanding common shares of Sleep Country for $35 in cash per common share. The purchase price represents a 34 per cent premium to the 20-day volume-weighted average price of the company’s common shares on the TSX for the period ending on July 19, 2024, and a 28 per cent premium to the closing price on July 19, 2024.
Sleep Country is Canada’s leading specialty sleep retailer and operates under the retailer banners; Sleep Country Canada, Dormez-vous, the rest, Endy, Silk & Snow, Hush and Casper Canada. The company has omnichannel and eCommerce operations, including 307 corporate-owned stores and 18 warehouses across Canada.
Stewart Schaefer
“I am extremely proud of the accomplishments of our team. This Transaction clearly demonstrates the value and strength of our brands and organization. We look forward to partnering with Fairfax in this new chapter of Sleep Country where we can continue to execute on our strategic initiatives and transform lives by awakening Canadians to the power of sleep,” said Stewart Schaefer, President and Chief Executive Officer of Sleep Country.
In an interview with Retail Insider, Schaefer said what the new deal means is “probably status quo but maybe even with a greater sense of acceleration.”
“It’s almost like a new horizon with some familiar faces. That’s how I look at it. I’m excited about it. We’re already a strong company with some fabulous, incredible brands but the fact that we’re teaming up with another Canadian iconic super power like Fairfax is quite exciting and the possibilities they were endless before but it just became a little bit more endless with the bank of Fairfax behind you if you know what I mean.
“We’ve been quite active. I’m not going anywhere. Actually it’s a rebirth and re-excitement more than ever before and there’s going to be a lot of exciting things that I’m sure the Fairfax folks will be able to support and help with in the future.”
Schaefer said he foresees company growth through new stores and acquisitions.
“We’ll continue on the path of opening our Sleep Country stores, we’re going to be opening up Casper, Endy, Silk and Snow stores. And we’re actively looking for good real estate and M&A (mergers and acquisitions). We never will buy for the sake of growth, we will be looking to buy companies that we think are great companies, great brands, and companies that we could take to the next level and obviously in my world.”
Fairfax is a holding company which, through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance and the associated investment management.
“We are thrilled to have Sleep Country and its talented team led by Stewart Schaefer join the Fairfax Group. Sleep Country is Canada’s leading sleep retailer with brands that are recognized by all Canadians. We look forward to working with Stewart and the entire Sleep Country team to further develop this remarkable Canadian success story over the long term,” said Prem Watsa, Chairman and Chief Executive Officer of Fairfax.
“Sleep Country is a great success story but found itself in a very difficult furniture industry that surged during the pandemic but has since suffered,” he said. “Sleep Country purchased the Casper brand last year and although top line sales were growing slightly (due to new store openings and the acquisition), it was getting hammered on the bottom line the last two quarters.
“Fairfax provides Sleep Country shareholders with a premium to recent share price and through its strategy to take Sleep Country private, provides an opportunity to lower the retailer’s cost structure out of the public eye. This deal provides an opportunity for Sleep Country to shed cost and build back stronger in a very difficult consumer environment.”
“What makes this industry attractive is its purchase cycle, which is about every seven to nine years. The Canadian mattress industry is approximately $1.3 billion annually, and Sleep Country controls most of that,” he said. “Add in a growing Canadian population, and the demand is long-term.
George Minakakis
“However, Sleep Country missed earnings in Q1 of this year and has been experiencing a rise in its cost structures, mainly from acquisitions, which seem to have been a distraction. The company also saw a decline in same-store sales of -1.8 per cent in 2022 and -6.4 per cent in 2023.
Does all of this weigh in on this acquisition? It might, of course, with a slower economy driven by inflationary pressures and higher interest rates, which is not helping retailers as we know. Canada’s retail sales in May of this year were down. Some suggest that it may be as low as -3.2 per cent when you black out the impact of the higher immigration we’ve experienced.
“In my view, this is more of an opportunity to remove the brand from the public market’s scrutiny. Pursue an organizational restructure, invest in AI and automation to reduce cost structures as much as possible, and further improve customer experiences and marketing capabilities. This brand has always been a Canadian success story, and this next shift for them will secure their future.”
“Sleep Country Canada is one of Canada’s most respected retail brands and a dominant player in the sleep retail category. I am expecting that the strength of the Sleep Country brand will be enhanced with the Fairfax partnership once all approvals are secured and the transaction is complete,” he said.
“From a commercial real estate standpoint, it will be interesting to see how future Sleep Country strategic initiatives may add to the existing 307 corporate-owned stores and 18 warehouses across Canada. This will be a new chapter for the Sleep Country brand and my expectations are high for their continued success.”
Officials said the transaction will be implemented by way of a court-approved plan of arrangement under the Canada Business Corporations Act and is expected to close in the fourth quarter of 2024. The transaction is subject to customary conditions, including the receipt of shareholder and court approvals and regulatory approval under the Competition Act (Canada). Completion of the transaction is not subject to a financing condition. In connection with and subject to closing the Transaction, the company will apply to have its common shares delisted from the TSX and the Company will cease to be a reporting issuer under Canadian securities laws.
“The Transaction was reviewed and overseen by the Special Committee. The Board, on the unanimous recommendation of the Special Committee, in consultation with its financial and legal advisors, and following a consideration of a number of factors, unanimously determined that the Arrangement is fair to Sleep Country shareholders and is in the best interests of Sleep Country, and recommended that Sleep Country shareholders vote in favour of the Arrangement at a special meeting of Sleep Country’s shareholders to be held to consider the Arrangement and approve the Transaction,” said Sleep Country.
“In connection with such determinations and resolutions, the Special Committee and the Board received an opinion from CIBC Capital Markets to the effect that, as of July 21, 2024, the consideration to be received by the holders of Sleep Country common shares is fair, from a financial point of view, to such holders, subject to the limitations, qualifications, assumptions and other matters set forth in such opinion. The Special Committee also received an independent opinion from Blair Franklin Capital Partners as of that same date, on a fixed-fee basis, to the effect that the consideration to be received by the holders of Sleep Country common shares is fair, from a financial point of view to such holders, subject to the limitations, qualifications, assumptions and other matters set forth in Blair Franklin Capital Partners’ opinion.”
The deal will be subject to the approval of (i) at least 66 ⅔ per cent of the votes cast by holders of all Sleep Country common shares present in person or represented by proxy at the meeting; and (ii) a simple majority of the votes cast by shareholders at the meeting, excluding votes from certain shareholders, as required under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.
In addition to shareholder approval, the Arrangement is subject to approval by the Ontario Superior Court of Justice (Commercial List) and regulatory approval under the Competition Act (Canada), as well as the satisfaction of certain other customary closing conditions. The completion of the Arrangement is not subject to any financing condition.
The company expects to call and hold the Meeting of shareholders prior to the end of the third quarter of 2024.
CIBC Capital Markets is acting as financial advisor and Davies Ward Phillips & Vineberg LLP is acting as legal advisor to the Special Committee and the company. Blair Franklin Capital Partners is acting as financial advisor to the Special Committee, including providing a fixed-fee fairness opinion regarding the transaction. Torys LLP is acting as legal advisor to Fairfax.
Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past three days.
Holt Renfrew flagship store at 50 Bloor St. W. in Toronto. Photo: Craig Patterson
The first phase of the renovation to the third floor of Holt Renfrew’s 50 Bloor St. W. Toronto flagship store has been completed, featuring a considerably different design than what was there before. The overhauled women’s department features contemporary fashions as well as boutique spaces for denim, H Project and SKIMS and this winter, a new men’s department will be unveiled in an adjacent area on the same floor.
The new womenswear space has a bold look with a denim focal area featuring bright carpeting and plants hanging from the ceiling — the Holt Renfrew design team worked with Studio Paolo Ferrari and master architect Gensler to create the space that is meant to evoke brand values including “warmth, sustainability, inspiration and joy”.
Various women’s departments on the third floor that were there prior to the renovation now feature updated spaces — that includes an expansive contemporary designer area with brands such as Vince, Theory, Frame, Alexander Wang, Ganni and others. The boutique for popular Kardashian-founded brand SKIMS was updated with a contemporary look, as was space for the purpose-driven department ‘H-Project’.
Denim area at the centre of the newly renovated third floor of Holt Renfrew at 50 Bloor Street West in Toronto. Men’s denim will be added in December of this year when the new men’s store opens in an area adjacent on the same floor. Photo: Holt Renfrew. Women’s contemporary area on the renovated third floor of Holt Renfrew at 50 Bloor Street West in Toronto. Photo: Holt Renfrew.
The Denim Lab on the centre of the floor currently houses women’s denim only, for now — this winter, men’s denim will be added to create a communal shopping environment. That will coincide with the unveiling of an adjacent men’s department, expected for on or close to December 5 of this year. Details of the new men’s store have been for the most part hush-hush for now, and construction will start soon on the space that once housed women’s contemporary fashions. So far we know that there will be a personal shopping area for men that will be accessed from near the denim area, according to a sales associate.
“The opening is very exciting for our customers, brand partners and everyone at Holt Renfrew. We are so proud to unveil the first phase of a completely revamped space of our Flagship Bloor store”, said Sebastian Picardo, President and CEO of Holt Renfrew in a statement. “This is just the beginning of what will be a new, bright, beautiful and creative place for our customers to shop. And where you’ll see our mission of empowering self-expression and igniting positive change come to life.”
“I am tremendously proud of everyone involved and want to thank our customers for their patience as we work towards the ultimate goal – a newly imagined men’s shop and a completely transformed space that will wow them.”
Women’s contemporary area on the renovated third floor of Holt Renfrew at 50 Bloor Street West in Toronto. Photo: Holt Renfrew. H-Project area on the renovated third floor of Holt Renfrew at 50 Bloor Street West in Toronto. Photo: Holt Renfrew.
Sustainability was part of the building process for the women’s third floor renovation, with Holt Renfrew’s Greenbuild Guidelines being strictly followed. Sustainability elements included using efficient LED lighting tied into building automation system, HVAC modernization, and retention of existing travertine floor to minimize waste going to landfill.
Holt Renfrew continues to operate a 16,000 square foot menswear store nearby, in a standalone two-level space at 100 Bloor Street West. The store opened in September of 2014, and with its lease expiring, Holts is relocating menswear back into the 50 Bloor Holts flagship. Prior to opening the standalone menswear store in 2014, Holt Renfrew’s menswear department was on the main floor of 50 Bloor as well as part of the basement.
Current standalone Holt Renfrew Men store at 100 Bloor St. W. in Toronto. Photo: Craig Patterson Looking from the Mezzanine level (footwear/bags/restaurant) up to the third floor women’s department and downwards to the second level women’s designer floor. Photo: Craig PattersonMezzanine level, looking past a Marimekko pop-up and women’s shoes to a Delveaux boutique concession. Photo: Craig Patterson
Holt Renfrew has been renovating the 50 Bloor flagship since before the pandemic. The second floor of the store, housing designer fashions, has seen updates including new boutique spaces for luxury brands Chanel, Gucci, Brunello Cucinelli and Celine, and a ‘Studio’ area for stylists. The mezzanine level saw a renovation in late 2018 that included an updated restaurant and women’s footwear, bags and home goods areas. Currently a Delvaux boutique occupies a space on the mezzanine along with boutique spaces for Dior footwear and Roger Vivier, and an expansive footwear area as well as bags, home goods and some food.
The store’s main floor saw an expansive renovation shortly before the pandemic that added 12 luxury brand concessions, which currently include Louis Vuitton, Saint Laurent, Prada, Fendi, Gucci, Dior, David Yurman, Balenciaga, Burberry, Miu Miu and Bulgari. The Bulgari concession will be closing in the near future after a standalone flagship opened on Bloor Street nearby several weeks ago.
Second level women’s designer floor – Brunello Cucinelli boutique is to the right, with other shops for Chanel, Gucci, Prada, and other designers on the same floor. Photo: Craig Patterson The view riding down the escalator from the second floor to the ground floor of Holt Renfrew at 50 Bloor Street West in Toronto — the basement level beauty hall is also visible below. Photo: Craig Patterson
The basement level of the 50 Bloor Holts flagship also saw a renovation in the spring of 2019, becoming a beauty hall with an adjacent Chanel beauty boutique. Years prior the basement had housed menswear and home goods, as well as a cafe.
Canadian retail sales in May experienced a modest increase of 1.1% YOY for All Stores, according to the latest data. However, discretionary spending underperformed, with All Stores Less Automotive, Food, and Pharmacies decreasing by -0.6% YOY.
The Supermarkets and Other Grocery Stores category saw a 1.8% YOY increase in sales, indicating that the recent boycotts targeting major grocery chains had a minimal impact on the industry overall. Inflation in food over the past year (May 2024 compared to May 2023) is at 1.5%, therefore large grocers still exceeded last year’s sales as a whole.
Specialty Food Stores, on the other hand, received a slight boost of 2.9% YOY, potentially due to consumers shifting towards smaller, local grocers in response to high inflation and the boycotts. There are many Specialty Food Stores that are not reported in Canadian StatCan data, so this could mean that the increase is actually higher than reported.
Interestingly, as noted last month, retail sales in Alberta continue to decrease, and were down -0.3% YTD compared to 2023. This is despite the province’s significant population growth. Considerations included:
Newcomers are shopping locally, though this alone shouldn’t have a significant impact.
The costs associated with moving have constrained their immediate spending capacity.
Alberta’s appeal lies in its lower cost of living, suggesting that many of the new residents might already be more frugal shoppers.
While Canadians continue to be constrained on cost of living expenses, they may be headed to other less-expensive areas, such as the Maritimes, for Ontarians, British Columbians, and maybe now even Albertans. Atlantic Canada experienced the second highest growth in retail sales of all Canadian regions (4.6% YTD). However, just as what is likely occurring in Alberta, this could backfire in the near future as the cost of living increases to a point where the differences in lifestyle begin to outweigh the savings in housing and relocating. These interprovincial migrations will also continue to be strained by the requirements to return to office.
As we move into the summer months, JCWG will be closely monitoring several key trends and factors that will continue to shape the Canadian retail landscape:
Will Canada begin to see the benefits of “coolcation” tourism? (tourists looking for cooler climates to travel to in the summer to avoid heat waves).
As we approach the mid-point of 2024, how will Q1/Q2 trends develop through the rest of the year?
How will upcoming mortgage renewals impact discretionary spending?
Is news on construction, flooding, fires, etc. keeping tourists from wanting to travel to popular Canadian destinations?
With limited growth in the percentage of online sales, could enhancements in retail experiences be the underlying cause?
How are YOU strategizing to encourage tourists to visit your store?
Canadian Retail Sales by Product Category, Same Month Comparison
Sales for the Month of May
May-24
May-23
YOY
All Stores
73,246,319
72,465,329
1.08%
Motor Vehicle and Parts Dealers
21,105,126
20,817,788
1.38%
Gasoline Stations
7,022,737
6,748,090
4.07%
All Stores Less Automotive
45,118,456
44,899,451
0.49%
Food and Beverage Stores
13,420,965
13,268,769
1.15%
Supermarkets and Other Grocery Stores*
9,448,356
9,281,237
1.80%
Convenience Stores
783,489
795,575
-1.52%
Specialty Food Stores
929,333
903,234
2.89%
Beer, Wine and Liquor Stores
2,259,787
2,288,723
-1.26%
Health and Personal Care Stores
5,658,393
5,436,995
4.07%
All Stores Less Automotive, Food, and Pharmacies
26,039,098
26,193,687
-0.59%
General Merchandise Stores
9,846,684
9,556,835
3.03%
Furniture, Home Furnishings, Electronic and Appliance Stores
3,495,373
3,501,616
-0.18%
Furniture Stores
1,175,700
1,178,782
-0.26%
Home Furnishings Stores
742,438
734,665
1.06%
Electronics and Appliance Stores
1,577,235
1,588,169
-0.69%
Clothing and Accessories Stores
3,630,648
3,653,592
-0.63%
Clothing Stores
2,775,750
2,780,342
-0.17%
Shoe Stores
455,778
453,956
0.40%
Jewellery, Luggage and Leather Goods Stores
399,120
419,293
-4.81%
Sporting Goods, Hobby, Book and Music Stores
3,963,343
4,145,280
-4.39%
Building Material and Garden Equipment
5,103,049
5,336,364
-4.37%
Miscellaneous Store Retailers
2,613,910
2,812,805
-7.07%
Cannabis Retailers
434,457
425,360
2.14%
Canadian Ecommerce Sales
Ecommerce Sales
May-24
May-23
Percent Change
Year-to-Date
18,164,599
17,142,294
5.96%
Year-Over-Year
3,867,846
3,435,243
12,59%
Canadian Retail Sales by Store Category, Year to Date Comparison
Year-to-Date, Ending May
May-24
May-23
YTD
All Stores
315,851,564
310,686,579
1.66%
Motor Vehicle and Parts Dealers
87,973,502
86,094,939
2.18%
Gasoline Stations
31,285,262
31,559,920
-0.87%
All Stores Less Automotive
196,592,800
193,031,720
1.84%
Food and Beverage Stores
61,359,101
60,281,645
1.79%
Supermarkets and Other Grocery Stores*
44,282,343
43,134,605
2.66%
Convenience Stores
3,441,433
3,505,006
-1.81%
Specialty Food Stores
4,077,411
3,862,595
5.56%
Beer, Wine and Liquor Stores
9,557,915
9,779,437
-2.27%
Health and Personal Care Stores
27,278,064
25,660,492
6.30%
All Stores Less Automotive, Food, and Pharmacies
107,955,635
107,089,583
0.81%
General Merchandise Stores
41,752,032
39,641,745
5.32%
Furniture, Home Furnishings, Electronic and Appliance Stores
16,609,275
16,680,458
-0.43%
Furniture Stores
5,446,315
5,497,713
-0.93%
Home Furnishings Stores
3,272,941
3,465,021
-5.54%
Electronics and Appliance Stores
7,890,019
7,717,722
2.23%
Clothing and Accessories Stores
14,747,681
15,018,795
-1.81%
Clothing Stores
11,362,460
11,576,802
-1.85%
Shoe Stores
1,733,333
1,765,148
-1.80%
Jewellery, Luggage and Leather Goods Stores
1,651,887
1,676,843
-1.49%
Sporting Goods, Hobby, Book and Music Stores
17,019,486
17,827,262
-4.53%
Building Material and Garden Equipment
17,827,159
17,921,323
-0.53%
Miscellaneous Store Retailers
11,052,140
11,682,117
-5.39%
Cannabis Retailers
2,058,626
2,024,034
1.71%
Retail Trade, Canada, All Stores, by Geographic Regions
Retailers worldwide are losing billions in unsold inventory but YDISTRI’s AI solution is turning this ‘deadstock’ into revenue by redistributing it based on real-time demand.
YDISTRI, an innovative AI-optimized SaaS solution for retail inventory management, is redefining how retail chains address inventory challenges. It goes beyond forecasting to dramatically rebalance inventory across locations.
By intelligently redistributing unsold inventory to real-time demand, YDISTRI empowers retailers to maximize revenue and minimize waste, going far beyond traditional forecasting methods.
Unsold inventory, or “deadstock,” poses a massive financial drain on retailers, tying up capital in merchandise that may never sell. YDISTRI is the leader in solving this $637 billion global crisis, using cutting-edge AI to identify stagnant stock and automatically redistribute it to higher-demand locations before it goes to waste.
“YDISTRI represents the future of retail inventory management – an AI-optimized paradigm shift that finally aligns overstock with real demand to maximize revenue,” said Roland Dzogan, CEO of YDISTRI. “We are excited to bring this game-changing solution to retailers across North America and enable them to sell what others deem as unsellable inventory — at full price.”
Photo: Shutterstock/licensed
YDISTRI has revolutionized inventory for clients in the US, Canada, Mexico, UK, EU, and Central Europe since 2019. By predicting trends and intelligently redistributing inventory, YDISTRI empowers retailers to increase sales, lower waste, and navigate today’s landscape.
Here are some of the key benefits for retailers of using YDISTRI’s AI solution:
Go Beyond Forecasting: Exceeds traditional forecasting methods to dynamically rebalance inventory based on real-time demand;
Sell ‘Unsellable’ Inventory: Eliminate deadstock and slow-moving items by selling them at full price rather than resorting to write-offs or discounting;
Boost On-Shelf Availability: Ensure consistent availability for hot products network-wide, even during promotions, without additional inventory investment by better utilizing current inventory;
Expand Retail Footprint: Open new stores at dramatically lower costs without additional inventory investment by reallocating existing inventory;
Minimize Working Capital: Improve inventory turnover and cash flow with optimized redistribution across retail networks; and
Reduce Logistics Costs: Intelligently reassign stock to high-demand locations, significantly reducing logistics and transportation expenses.
YDISTRI is making a significant financial impact for retailers. On average:
90 per cent of products redistributed are sold within two months;
10 per cent (or higher) increase in net profit margin;
10X increase in inventory turnover of low-velocity inventory;
30 per cent improvement in working capital company-wide;
Two to five per cent logistics costs – firmly in control versus 40-50 per cent markdowns;
Up to 90 per cent of redistributed deadstock sold at full price, increasing net profits up to 20 per cent.
As the retail industry faces continued pressure to adopt sustainable practices, YDISTRI is leading the charge with its innovative AI-optimized SaaS solution. By transforming inventory management, YDISTRI enables retailers to reduce environmental impact, achieve significant cost savings, and implement more sustainable practices.
“We believe that sustainable retail practices are not just beneficial for the environment, but also for the bottom line. Our technology empowers retailers to make smarter inventory decisions, reducing shipping costs and waste, therefore, enhancing profitability,” said Dzogan.
“By leveraging our AI algorithms, we help retailers not only enhance their sustainability efforts but also improve their financial performance. It’s a comprehensive solution that addresses both environmental and economic challenges in the retail industry.”
Photo: Shutterstock/licensed
One of many client success stories is EU beauty retailer DOUGLAS, which had faced an overstock issue with inventory languishing on shelves which resulted in capital being tied up while product was being marked down. The retailer utilized YDISTRI’s innovative algorithm and as a result, was able to strategically shift its inventory management.
Inventory was aligned with regional demand through YDISTRI’s platform, while overstock was addressed by reallocating items to where they were needed the most. Within three months, DOUGLAS saw a significant reduction in deadstock with 90 per cent of previously stagnant products selling, which increased cash flow and reduced the need for discounting. Furthermore, in six months, it reduced total inventory by 32 per cent.
“The impact of cost-effective inventory redistribution is two-fold: not only does it improve customer experience, but it also significantly boosts our retailers’ profitability company-wide,” said Dzogan. “For example, our client DOUGLAS reduced their working capital requirements by an impressive 12%, while maintaining the same level of product availability for their customers.”
The environmental toll of retail practices, from plastic packaging to the disposal of unsold perishables, is staggering. YDISTRI addresses these issues head-on by optimizing inventory to reduce overproduction and minimize the transportation of unwanted goods. This approach prevents waste from ending up in landfills and significantly reduces the use of plastic packaging, contributing to a healthier planet.
True inventory optimization requires more than just planning and forecasting – it’s critical to close the loop with real-time inventory correction and optimization. Many retailers mistakenly believe their existing solutions are sufficient but fail to account for customer nuances and dynamically adjust inventory across locations. YDISTRI’s differentiator is its ability to go beyond planning, leveraging AI to continuously analyze data, pinpoint “deadstock”, and profitably redistribute inventory to prevent shortages and overstocks. Simply reducing assortment is a risky faux solution that can do more harm than good.
For retailers, shrinkage from theft and other inventory distortion costs billions annually as physical stock levels diverge from digital records. YDISTRI uses data analysis to identify “phantom” merchandise that should be in stock but has truly gone missing. By continuously syncing the digital and physical worlds, YDISTRI eliminates inventory blind spots to reduce multi-billion-dollar shrinkage costs that many retailers simply accept as unavoidable losses.
For more information on YDISTRI, visit ydistri.com
Retail sales in Canada decreased 0.8 per cent to $66.1 billion in May as sales were down in eight of nine subsectors, led by decreases at food and beverage retailers, reported Statistics Canada.
The federal agency said core retail sales—which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers—were down 1.4% in May and in volume terms, retail sales decreased 0.7 per cent in May.
“Following an increase of 1.2 per cent in April, core retail sales were down 1.4 per cent in May on lower receipts at all core retail subsectors, with the largest decrease in sales being at food and beverage retailers (-1.9 per cent). Sales at food and beverage retailers were down on lower sales at supermarkets and other grocery retailers (except convenience retailers) (-2.1 per cent) and beer, wine and liquor retailers (-3.3 per cent),” said the report.
“Lower sales in May were also reported at building material and garden equipment and supplies dealers (-2.7 per cent) and general merchandise retailers (-1.0 per cent).
“On a seasonally adjusted basis, retail e-commerce sales were down 3.6 per cent to $3.9 billion in May, accounting for 5.9 per cent of total retail trade, compared with 6.1% in April.”
Alexandra-Maria
An advance estimate of retail sales by StatsCan suggests that sales decreased 0.3 per cent in June.
Maria Solovieva, Economist with TD Economics, said April’s momentum in retail sales proved to be short-lived, with a sharp reversal in May and an expected sluggish performance in June.
“Our internal credit and debit card spending data also indicate softness. Although certain sectors, particularly services, show some resilience, the overall spending trajectory suggests that consumers remain cautious, preferring to build precautionary savings rather than spend,” she said.
Maria Solovieva
“Considering this, real personal spending is tracking around +0.7% (quarter-on-quarter annualized) in Q2. (The) report adds further to the evidence that the BoC (Bank of Canada) will cut rates when it meets next week.”
Last week retail giant Amazon reported its biggest sales this year for Prime Day.
Canadian data from Salesforce showed:
Discount rates (averaging at 27% off) were much more enticing this year compared to last year’s Prime Day with Canadian retailers increasing discount usage by 11%
Sales for non-Amazon retailers in Canada grew by 8% YoY
Canadian retailers witnessed consumers buying more units per transaction YOY (4.7% compared to 4.2 in 2023)
Canadian web traffic grew by 5% YoY (compared to +2% globally), while order growth shows an increase of 6% (higher than the flat 0% growth globally)
Add to cart value (19%), conversion rate (2.5%) and cart abandonment rate (87%) for Canada remains stable YOY
Social traffic grew by 1% YOY (11% compared to 10% in 2023)
Caila Schwartz
“For the first time in a long time we’re seeing order volumes turn positive in certain markets and discounting is high. The lesson from the US and Australia is a simple one — if retailers deliver on discounting and providing true value, they will release that pressure valve of built-up demand and see incredible success. If they don’t, retailers may risk losing out as shoppers will go elsewhere,” said Caila Schwartz, Director of Consumer Insights, Salesforce.
“Both measures have improved substantially in recent quarters, although they remain higher than they were before the COVID‑19 pandemic. Most consumers continue to think that domestic factors—in particular, high government spending and elevated housing costs—are contributing to high inflation,” it said.
Helena Lopes
“Sentiment remains subdued and unchanged from last quarter, as high inflation and elevated interest rates continue to constrain people’s budgets. Perceived financial stress remains high, most consumers continue to report spending cuts, and pessimism about future economic conditions persists. However, homebuying intentions are close to the historical average, supported by strong plans among newcomers to purchase a home,” added the report.
“Consumers’ perceptions of the labour market have weakened this quarter, especially among private sector employees. However, overall wage growth expectations reached a new survey high, driven by public sector employees who anticipate their salaries will catch up with the higher cost of living.”
Walmart at The Stockyards in Toronto. Photo: Walmart Canada
The recent announcement that American retail giants Walmart and Costco will be joining the Grocer Code of Conduct, alongside established Canadian players such as Loblaw, Sobeys, and Metro, marks a critical step forward in the evolution of Canada’s grocery sector. This collective adherence to the code by all major players is essential for its efficacy and represents a monumental effort that has taken years to materialize.
To many, the Grocer Code of Conduct remains an enigma. Fundamentally, this code aims to enhance competition in the Canadian market by imposing accountability across the food industry, particularly targeting practices that have traditionally occurred out of public view. Under this new regime, various opaque practices, such as the exorbitant fees charged to suppliers by retailers, will be subjected to scrutiny and regulation.
For instance, consider a Canadian jam producer who wants to distribute products through major retailers like Loblaw. Initially, the grocer might impose listing fees and other charges amounting to over $100,000 annually. As the product gains popularity, these fees can escalate dramatically, compelling the supplier to increase prices to maintain profitability. This cycle contributes to market volatility and ultimately penalizes consumers. The implementation of the code is poised to mitigate such scenarios by regulating fee escalations and fostering a more stable pricing environment.
Furthermore, the code promises a more equitable landscape for independent grocers who will be able to negotiate on more level terms. While giants like Loblaw and Walmart will maintain significant market influence, their conduct is expected to become less predatory under the new guidelines.
Costco Rexdale NW Toronto (Image: Costco)
The industry’s need for an image overhaul cannot be overstated, especially in the wake of scandals such as the bread price-fixing debacle and the controversy over ‘hero pay’ during the pandemic. These incidents have severely tarnished the public’s perception of the grocery sector.
Key figures such as Michael Medline, CEO of Sobeys, have played pivotal roles in advancing the code. Medline’s call for greater discipline and respect within the industry, alongside the tireless advocacy by Michael Graydon and Sylvie Cloutier on behalf of Canadian food manufacturers, has significantly shaped the discourse and mobilized support among policymakers. The efforts of François-Philippe Champagne and the Parliamentary Agriculture Committee, chaired by MP Kody Blois, have also been instrumental in positioning the code as a strategic blueprint for fostering competition and enhancing supplier relations in Canada.
With the code’s implementation, food manufacturers and independent grocers will gain a stronger voice, leading to greater product diversity for consumers. This is a straightforward equation: more suppliers equate to more choices on the shelves.
While securing the commitment of all five major retailers is a commendable achievement, the real challenge lies ahead in ensuring compliance and tangible results. Canadians’ skepticism will likely persist until they witness the benefits of these reforms firsthand—a sentiment that is both understandable and justified.
Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.
