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Calgary-Based Sausage and Deli Brand ‘Spolumbo’s’ Sees Success Amid Retail Expansion

PHOTO: SPOLUMBO’S INSTAGRAM

Mention the word sausage in Calgary and inevitably Spolumbo’s Fine Foods and Deli comes to mind.

You could say that entrepreneurs Tony Spoletini, Tom Spoletini, and Mike Palumbo – all former Canadian Football League players – have built a sausage empire in the city and have become synonymous with the popular food item. 

The idea that began in the winter of 1992 in the basement of Tom Spoletini’s in-laws’ restaurant is now the king of sausage making and selling in Calgary.

When Tony Spoletini is asked how many sausages the company pumps out on a yearly basis, he has to stop and think for awhile – doing the calculation in his head and asking for input from one of his staff.

PHOTO: MARIO TONEGUZZI

“We process over 20,000 kilos a week,” says the staff member, sitting at a table nearby.

“So that’s about a million kilos a year. There’s six sausages in a kilo. So we probably process in a year six million sausages,” chuckles Tony, who is the public face of the company.

“You know what kept us going, and it’s an old sports adage, I don’t think we looked beyond the first series or the first play. Our first goal was to survive and once we survived we said okay let’s start taking home a little bit of money and then I just think we kept our goals attainable and short. We never overextended and we always made sure we paid our suppliers, paid our staff, had money in the bank. Maybe the process could have been a lot faster. We took it a little bit more conservative but we never were caught so to speak with our pants down.”

PHOTO: MARIO TONEGUZZI

Tony Spoletini won two Vanier Cups, the national university football championship, with the University of Calgary in 1983 and 1985. As a professional, he played with the Edmonton Eskimos in the Canadian Football League and then the Calgary Stampeders. He won a Grey Cup in 1987 with the Eskimos and he was with Stampeders in 1991 when they lost the Grey Cup to the Toronto Argonauts.

“When I finished and retired after the ‘91 season Tom and Mike had this idea of doing authentic Italian sausages and promote it to restaurants and food services,” says Spoletini. “I decided I wasn’t going to go back and play the ‘92 season. I joined those guys. We started making sausages out of the basement of Tom’s father-in-law’s restaurant La Villa Firenze. We used those old 30-pound hand cranks and started hitting the streets and restaurants.

“But when we really got going is when this little deli two blocks down the street from where we are now became available and we bought the 9th Avenue Deli. We opened that July 7 of 1992. The reason for that is we thought it was futuristic. But it was like a 1960 German sausage machine. It was a hydraulic, 100-pound sausage machine. You fill it, you press it with your knee and it pushes the meat up and it shoots it out on the table. For us that was like state-of-the-art but it was really behind the times. We bought that deli because of that sausage equipment. But we needed cash flow so we kept the front end selling the sandwiches. We kept a few of the favourite sandwiches this 9th Avenue Deli had and added our own Italian flare.”

Initially the deli grew faster than the sausage business. Slowly but surely the sausage business grew. A few years later a piece of land became available a couple of blocks up the street and the trio bought it. They had money for the land but they couldn’t get the banks to loan them money to build.

“We ended up winning the Calgary Chamber of Commerce’s Small Business of the Year in 1997 and next thing you know everybody wants to invest in us. So on August 4, 1998 we opened up this new deli that’s got 100 seats and a 5,000-square-foot federal facility (approved) where we make the sausage and we can now sell that sausage really anywhere in the world,” says Spoletini. The old deli was about 2,000 square feet including the kitchen.

The current location in the trendy inner-city Inglewood neighbourhood is about 10,000 square feet altogether.

PHOTO: MARIO TONEGUZZI

Spolumbo’s opened a smaller location in a nearby neighbourhood about a year and a half ago. Other locations are at the U.S. terminal of the Calgary International Airport and most recently at one of Calgary Co-op grocery stores.

“We’re very blessed. We have a great relationship with Co-op, Sobeys with a lot of the food service places, Gordon Food Service and we’re in Community Natural Foods, Urban Fare. We’re in City Market. We have a really strong presence in Calgary especially and southern Alberta. And you can find us in Edmonton too and places in B.C. and Manitoba. We really have a loyal and strong following in Calgary and surrounding areas,” says Spoletini.

He said people in Calgary like to embrace entrepreneurs and part of Spolumbo’s success is due to the three owners having their roots in the city and the story of their success is an interesting one.

PHOTO: MARIO TONEGUZZI (TONY SPOLETINI)
PHOTO: MARIO TONEGUZZI

“The story’s good but if you don’t have a good product to back it up you’re going to go nowhere,” said Spoletini. “We had a good story. We had a good reputation in the city and I think we provided a really good product. The story and the product just kind of worked. What set us apart first was doing a high-quality, low-fat sausage.”

The company, which is known for its customer service and community involvement, continues to add different services. For example, the main deli recently started experimenting with new alcoholic beverage systems which allow customers to pour their own beer and wine from automatic dispensers – while they have one of those six million sausages Spolumbo’s produces each year.

Canadian Retail Sales Growth Headed for 10 Year Low

PHOTO: NJENE/SHUTTERSTOCK

The latest numbers from Statistics Canada show that Canadian retail sales growth continues to weaken. For the 3 months ending August 2019, retail sales gained a mere 1.0% year-over-year on a not seasonally adjusted basis. After 8 months of 2019, or 2/3 of the year, year-to-date Canadian retail sales are up only 1.8% compared to a year ago.

Current trends imply things are going to get worse before they get better. The 3 month sales growth trend (orange line in the chart above) continues to decline, while the underlying 12 month trend (green line) is at another new low. At current rates, retail sales growth in 2019 could end up at around 1.3% or 1.4%, which would make it the worst year since 2009 and the so-called Great Recession.

Most of the bad news however is coming from the Automotive & Related sector, due to declining gasoline station sales combined with very modest growth at new car dealers. The Food & Drug sector has also gone into a funk in the last several months. By comparison, the Store Merchandise sector is not doing too badly and is managing to keep its head above water.

Food & Drug

The Food & Drug sector’s retail sales growth was actually leading the market for most of the first half of 2019. That has now evaporated, with sales up only 1.2% for the 3 months ending August. This has now replaced July as the second worst such gain in the last 6 years.

The above chart shows how much the 3 month trend (orange line) has weakened recently. The underlying 12 month trend (green line) seems to be holding its ground but is unlikely to continue to do so. Under current circumstances, the Food & Drug sector stands to end up with a even lower retail sales in 2019 than last year’s weak showing.

Grocery stores are not doing well, with retail sales up a scant 0.2% year-over-year for the 3 months ending August 2019. Convenience stores’ performance was particularly weak, down 6.7% in the period.

PHOTO: LOBLAW

Health and personal care stores did somewhat better, gaining 2.4% in retail sales for the 3 months ending August 2019. Their year-to-date retail sales are up 2.6% after 8 months, which puts health and personal care stores on track to record slightly higher growth in 2019 than a year ago.

Store Merchandise

Store Merchandise retail sales gained 3.3% year-over-year for the 3 months ending August 2019. This was actually the highest such result so far in 2019, and a significantly better performance than the other major retail sectors.

The 3 month trend (orange line in the chart) is improving slightly compared to the start of the year. As a result, the underlying 12 month trend (green line) has flattened out and no longer appears to be declining. Year-to-date retail sales in Store Merchandise are up 2.5%, but current trends imply this could improve somewhat by year’s end.

PHOTO: MQN ARCHITECTS

As usual, there were big discrepancies in how well various store types performed. Miscellaneous store retailers led the pack with a year-over-year gain of 11.8% in the last 3 months, thanks to the addition of cannabis stores (the effect of which will decline at the start of next year). General Merchandise stores also had a healthy retail sales increase of 5.2% for the period.

On the other hand, electronics and appliance stores continue to be the doormat of retail, and their retail sales were down 10.2% year-over-year for the 3 months ending August 2019. Shoe stores and sporting goods, hobby, book & music stores also had slightly lower sales.

Note that Statistics Canada is now suppressing the breakdown of general merchandise stores for confidentiality reasons. The figures in the “By The Numbers” table below are estimates based on previous trends.

Automotive & Related

Things in the Automotive & Related sector got uglier in the latest StatsCan data. Retail sales were down 1.1% year-over-year for the 3 months ending August 2019. Year-to-date sales are up only 0.4% after 8 months, but only thanks to a brief uptick in the second quarter. The underlying 12 month trend (green line in the chart) is on a nose dive and could very well end up in negative territory for 2019 overall.

PHOTO: SHUTTERSTOCK

Slow retail sales at gas stations are the main problem. Their sales declined 5.2% in the 3 months ending August, and are off 4.7% on a year-to-date basis. This is because of depressed gasoline prices, but it is not apparent that consumers are using their savings to spend in other areas of retail.

In the past, automobile dealer sales tended to offset poor performance at gasoline stations, but this no longer appears to be the case. Retail sales at new car dealers were up just 0.4% year-over-year for the 3 months ending August 2019.

By The Numbers

Special Note: Statistics Canada revised historical data with the February 2019 release. Unadjusted monthly data were revised back to January 2018, while seasonally adjusted data were revised back to January 2015. Those keeping score should update their files. The analysis in this report is always based on unadjusted data.

Canadian E-Commerce Sales

StatsCan started providing ecommerce retail sales data in January 2016. While the amount of data is limited, some trends appear to be emerging. Here are some results.

Overall, e-commerce represented about 3.3% of total Canadian retail sales for the 12 months ending August 2019, including both pure play operators as well as the online operations of brick & mortar stores. Canadian consumers however also buy online from foreign websites which is not captured in these numbers.

Canadian e-commerce sales were up 29.9% year-over-year for the 3 months ending August 2019. This was much higher than for location based retail which gained just 1.0%.

Note that location based retail is the same as that in the preceding “By The Numbers” table. It’s what’s normally reported as Canadian retail sales. Except that it isn’t. Location based retail excludes another section called Non-Store Retailers (NAICS code 454), which includes electronic shopping and mail-order houses, which in turn is where (mostly) pure play e-commerce businesses are. For the 12 months ending August 2019, electronic shopping and mail-order houses had an estimated $12.8 billion in e-commerce sales.

But that’s not the only source of e-commerce, as (mostly) bricks & mortar location-based retailers also sell online. For the 12 months ending August 2019, this group had an estimated $7.8 billion in e-commerce sales. With electronic shopping and mail-order houses, there’s a grand total of $20.6 billion in e-commerce sales by Canadian operators over the year. Note that this does not include foreign e-commerce purchases made by Canadian consumers, but it does include e-commerce purchases made by foreigners at Canadian operations.

For electronic shopping and mail-order houses, an estimated 85.5% of their sales are allocated to e-commerce. For (mostly) bricks & mortar retailers, it can be estimated that just 1.3% of their total sales are attributable to e-commerce.

In the final section of the above table, (mostly) pure play operators (namely, under electronic shopping and mail-order houses) generated an estimated 62.1% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers’ share of e-commerce is 37.9%.

For more explanation on the e-commerce numbers, see Statistics Canada: Retail E-commerce in Canada.

This analysis is updated monthly as new numbers are published by Statistics Canada. If you would like notification of when an update becomes available (and you’ve read this far), please connect with Ed Strapagiel on LinkedIn.

Canada’s ‘Brunette the Label’ Collaborates With Juicy Couture for Limited-Edition Fashion Line

PHOTO: BRUNETTE THE LABEL (VANCOUVER FASHION WEEK)

Fans of the Canadian Brunette the Label clothing label marked their calendars when the Vancouver Fashion Week 2019 show announced a new limited-edition line. Branching out from their typical release schedule, Brunette is partnering with Juicy Couture for the first time to create an exclusive and limited-edition collection.

Brunette is a beloved Canadian clothing label that promotes positivity among women through its signature sweatshirts, t-shirts, and accessories. Since 2014, the company has focused on reclaiming the term “babe” to  include all women. Their goal is to create an inspiring and safe community within the fashion world.

Founder, Miriam Alden, entered the fashion industry with interest in sales and marketing. As the years passed, she became engrossed in starting her own showroom. In 2009, the Brunette Showroom was born. After spending years at trunk and pop-up shops, Gwyneth Paltrow’s ‘goop’ lifestyle brand featured Brunette in 2014, and the label took off. Now, Alden runs the company as CEO and Creative Director. She believes that the clothing produced by the label reclaims the term “babe” as an inclusive term that strengthens women as a non-physical descriptor. It’s resulted in the Brunette and Babe crewneck sweatshirts that fans around the world long to buy.

The collaboration, though recently announced, has been in the works since February of 2018. A senior associate with the parent company of Juicy Couture first saw Alden’s Brunette line at a show in Vegas. After viewing the neon pink “Babes Supporting Babes” sign, the collaboration began to take shape. What began as a Canadian collaboration expanded into the United States.

The 10-piece collection features all of Brunette’s popular styles with Juicy’s gothic font. In addition to the Brunette pieces, there will also be zip-up, pink velour tracksuits available for purchase. Every piece in the collection is versatile so that women can wear them for comfort and style. Everything will be available on November 4th at 100 brick-and-mortar Canadian retailers and the Juicy New York City location. For those who can’t make it in person, the collaboration will also be available on BrunetteTheLable.com and JuicyCouture.com for $88-$129 in US and Canadian currencies.

Brunette the Label has experienced massive expansions in the past five years, but  collaboration with Juicy Couture will speed that growth even more. Partnering with a major brand expands your reach and mines an established customer base. The NFL conducted a similar partnership to evaluate the potential retail success of selling men’s apparel all year round. After quantitative and qualitative research, the strategy was proven to be a future success, which led to more sales.

More prominent brands benefit from partnering with smaller brands because they gain access to a potential niche audience they may not have been able to reach before. Ultimately, Brunette and Juicy Couture’s business models align perfectly, so the match is nearly a guaranteed success.

Fans of both Brunette and Juicy Couture can check out the sale on November 4th. However, there will be more to come in the future. Juicy has confirmed that after the limited-edition collection ends, the partners will expand the fashion line in the spring of 2020.

For now, the future of Brunette looks brighter every day. Miriam Alden claims that, with two female-founded companies, she’s excited to collaborate on the upcoming collection. Both brands share similar visions and values, allowing the process to flow naturally. According to Alden — who says she’s been a fan of Juicy for years — this opportunity has been a dream come true. “I couldn’t  feel more proud to be a Canadian designer collaborating with such an iconic brand as Juicy Couture,” Alden said in a statement to Fashion. “Especially one that is such a leader in a similar fashion space to Brunette the Label.”

“Juicy Couture was a big part of my love for fashion as a young woman,” she said, “and as a female founded start-up brand it really gave me confidence to follow my dreams when I was first deciding to get into the fashion industry. My pink velour Juicy tracksuit was the first big purchase I made, and I always felt so confident wearing it. Now, years later one of my biggest goals as a creative director is to create a community with my brand that creates those same feelings I had back then.  And that is of course why we had to include a pink velour tracksuit as a part of the Brunette x Juicy Collaboration.”

109: Costco, Eataly and Furla

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This week Craig and Lee talk about Costco, Eataly and Furla.

The Weekly podcast by Retail Insider Canada is available on Apple Podcasts, Stitcher, TuneIn, Google Play, or through our dedicated RSS feed for Overcast and other podcast players.

Sponsored by Oberfeld Snowcap: Founded 40 years ago, Oberfeld Snowcap is a full-service real estate and retail advisory firm that focuses on retail tenant representation, strategic planning, property and project leasing, as well as real estate investment sales.

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Popular US Chain ‘MOD Pizza’ to Enter Canada Amid Significant Expansion Plans

PHOTO: MOD PIZZA (WISCONSIN)

MOD Pizza, based in Seattle with more than 400 locations in the U.S. and the UK, is expanding into Canada.

The first MOD location will open late this year in Langford, British Columbia, in the newly developed Belmont Market Shopping Centre – bringing Canadians MOD’s individual artisan-style pizzas which are made on demand where customers can create their own pizzas and salads with any combination of over 30 toppings for one price.

It will open in late November or early December.

The fast casual restaurant brand is being brought to Canada by V.I. Pizza Inc., led by Jim Hayden, Jeff Jefford, and Ken Whitaker, who have deep food industry experience and operate several successful brands across Vancouver Island. Their agreement includes development rights to bring five MOD locations to the island over the next several years. Mike Yasinski, co-founder of Hudsons Canada’s Pub and executive committee member of Restaurants Canada, is also an investor.

PHOTO: GRAPHITE DESIGN GROUP

“We are confident that MOD will translate well in the Canadian marketplace, and that the V.I. Pizza team will be great partners as we further expand our footprint. With Vancouver Island’s close proximity to our home base of Seattle, this feels like the perfect first step into Canada,” said Scott Svenson, co-founder and CEO of MOD.

“For us, the most important factor in selecting our franchisees is finding those who not only share our business values, but are committed to cultivating the MOD culture in their stores. The V.I. Pizza team are aligned with our belief that taking care of people, and using the platform of MOD to make a positive impact, leads to a successful business. As we continue to grow MOD’s footprint, we hope to identify additional like-minded partners who are interested in helping us expand across Canada.”

PHOTO: CROMBIE REIT (BELMONT MARKET, LANGFORD)

The concept was founded in 2008 by entrepreneurs Scott and Ally Svenson, who formerly owned Seattle Coffee Company and sold it to Starbucks in 1998. They also had helped form and grow a restaurant chain in the UK called Carluccio’s.

Today MOD Pizza has 464 locations, in 28 U.S. states and 10 locations in the UK, with an additional 20 plus stores slated to open by the end of this year.

PHOTO: EATER PORTLAD

“We’re absolutely thrilled to introduce MOD Pizza to Canada, and to share its compelling combination of superior food quality, value, speed and most importantly, its platform for doing good,” said Jim Hayden, COO of V.I. Pizza Inc. “MOD embodies everything we believe a brand should stand for – a people-first culture, a community driven approach, and a best-in-class business model. We can’t wait to debut the first store in our home market of Vancouver Island.”

MOD Pizza’s SVP of Partnerships John Dikos, who directed MOD’s expansion to Canada, said the company decided a few years ago it had some interest in going further afield from the U.S. and the UK.

“We’ve always had a lot of interest from international restaurateurs wanting to take our brand to other countries. We’ve remained quite disciplined keeping our focus here in the U.S. and over in the UK. But things really seemed to interest us as a leadership team to go further into North America. So we decided to focus on Canada,” said Dikos.

PHOTO: W. HILES PARTNERSHIP (LONDON FLAGSHIP)

“We decided that Canada would be very interesting. Not without its challenges. Obviously plenty of examples of companies that had their challenges in Canada. We really felt that it would be a worthwhile venture to enter Canada. We started contemplating and preparing for that a couple of years back.”

Dikos said as the co-founders initially put together the concept of MOD Pizza and the team and began testing the operating model, Ally Svenson famously said ‘the world does not need another soulless restaurant chain.”

So a lot of thought went on early on that MOD would be a platform for change, a platform for social good and the owners let that grow organically rather than beginning with a mandate from the top on exactly how that would come to life.

“In the first few years what grew was this really, really interesting focus on our team and on our people. The philosophy is pretty simple. If you take care of and inspire our team, they’ll take care of and inspire the customer and the business will take care of itself,” said Dikos.

On its website the company notes: “MOD Pizza is a business, but our real purpose is creating positive social impact in the lives of our employees and their communities. Yes, we make pizza, but our pizza makes people. Our measure for success isn’t the number of MOD locations – it’s the number of people employed and their well being. It’s something bigger than pizza – it’s a movement. Welcome to MOD.”

Indigenous Footwear Brand ‘Manitobah Mukluks’ Launches Aggressive Canadian Retail Store Strategy

PHOTO: MANITOBAH MUKLUKS

A pilot pop-up project last year for Manitobah Mukluks in three Canadian shopping centres was so successful that the company is expanding its number of retail locations this year to 18 stores in several major cities.

The company’s success is in producing and selling the original winter boot of Canada.

“We sell indigenous footwear. We sell footwear of all types. Our main product is what we call the original winter boot – the mukluk. Indigenous people have survived for thousands of years in the harshest conditions on earth wearing mukluks,” said Josh Fine, Chief Brand Officer and Partner with Manitobah Mukluks.

PHOTO: MANITOBAH MUKLUKS

Fine’s business partner is CEO Sean McCormick – a Metis entrepreneur who started the business in 1997. Fine partnered with him in 2008 to establish the Manitobah brand as people know it now. McCormick had a tannery and was tanning leathers and furs. He started trading them for moccasins and mukluks, leathers and furs, with indigenous makers. But over time he couldn’t get enough moccasins and mukluks to sell to gift shops and trading posts so he started making them himself.

“And it kind of grew from there,” said Fine. “He started selling them as a gift item but when I met him we had this vision of it’s such a great story here – both his story and the story of the mukluk itself and the product and the community story – how do we tell that story to more people was really my job. That’s why and how we partnered.”

The company’s most traditional mukluks are what it calls Storyboots which are the most authentic product handmade by indigenous people in their community with 100 per cent of the proceeds going back to those artists.

“We’ve combined that traditional product of the mukluk with modern materials and techniques. We didn’t invent the mukluk. We borrowed the mukluk as a design and we innovate on it certainly and partner with the most innovative people in the world to do it. We think there is a lot of innovation built into that design that people have let go,” said Fine. “So whether it be the flexibility in it, the natural materials, there’s no right/left foot on a mukluk believe it or not. There’s magic that is built into this historic design that people have forgotten about,” said Fine.

“So what I found as I brought the mukluk to the world is really we just have to tell that story. People have to try the product. It’s the most comfortable, the warmest boot anyone’s ever tried. People need to get the story because it looks different than the other winter boots out there.

“In the Prairies people get it. They get that this is a legitimate winter boot that’s really going to protect you better than some other high tech winter boot. But as soon as you leave the Prairies and you get into Toronto downtown, or New York, Chicago, or L.A., all of a sudden it’s a statement or a costume. And so we’re really trying to get away from that and tell people no this is function. We’re actually a performance brand here. It’s not meant to be fashion. It may be fashionable but the function of it is something that people don’t intuitively understand and so we need to communicate that and we need to tell that story. It’s really these pop-up experiences that we’re establishing where we’re telling that story. And so we’re trying to do it in places where people don’t quite understand it.”

 

 
 
 
 
 
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Exploring those crisp fall mornings in style. 🍂 . @this.is.serene . . . . . . . . . . #RockYourMocs #Moccasins #Manitobah #Beading #IndigenousStyle #HandMade

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Fall has officially arrived… so it’s time to start day dreaming about winter! 🍂 ❄️ #falldays #winternights #muklukseason

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In the fall and winter of 2018, three pilot pop-up stores were set up in CF Rideau Centre and Carlingwood Shopping Centre in Ottawa and West Edmonton Mall. All three stores over-achieved the company’s expectations.

The company jumped on the opportunity this year to take advantage of that success. It has 17 locations across the country – four in Calgary, two in Edmonton, five in Ottawa, and six in Toronto area.

It will be opening a location in the CF Toronto Eaton Centre in November.

The pop-up experiences are all temporary and open until Christmas. The company also has an online selling platform.

“We’re pretty new at it. We did three stores last year. They were so successful. It’s a pretty big expansion this year. Yes they worked very well and we plan on doing more. I think so far the results are exceptional and so we’re very excited about the prospects of using these to build the brand not only in Canada but outside of Canada as well,” said Fine.

Manitobah also partners with more than 600 retailers, from small trading posts to national chains such as Cabelas, Nordstrom, Holt Renfrew, and Sporting Life.

The company has three different types of manufacturing for its products – the storyboots which are authentic, handmade items by indigenous people; the Canadian production is made in its factory in Winnipeg; and there is a line of products made in Vietnam.

“We wanted to make footwear. We didn’t want to just make traditional footwear. We wanted to make modern footwear that we could scale on a global level and we found that we just didn’t have all the capacity and capabilities and economics to do it here at home. At the same time, we found it was difficult to find good partners that we could trust that abided by our same philosophy overseas,” said Fine. “We established our factory there. We partnered with someone in Vietnam. It is a factory that we own and control that is fair trade that we visit and it’s really allowing us to scale globally.”

Fine said more than half the company’s staff is indigenous and it hires indigenous performers and teachers to teach workshops.

Seafood Fraud a Problem in Retailers Across Canada: Expert

PHOTO: SHUTTERSTOCK

By Sylvain Charlebois

Oceana is known for its splashy reports on fish and seafood fraud. Their cumulative assessment across several Canadian cities showed that 44% of the fish samples assessed were falsely identified. After Halifax, Toronto, Victoria, Ottawa, and Vancouver, Montreal is the latest market Oceana has looked at, and results are not great.

According to the report released last week, 61% of samples picked up in Montreal’s restaurant and retail stores were mislabelled. More than one in three samples did not even have the right species identified. Apart from Victoria, where only 15 samples were analyzed, Montreal is the city where the largest percentage of mislabelled packages was recorded.

Food fraud is obviously a real problem, but by reading the report, we realize that the methodology used is not very clear. Ironically, Oceana itself lacked transparency when describing its sample design. We don’t know how establishments were chosen, or even if they were verified by a third-party organization that certifies ocean traceability practices, such as Ocean Wise. It exists, but Oceana makes no mention of it in their report. It’s a bit odd that no one has questioned Oceana’s methods or sampling strategy.

PHOTO: SHUTTERSTOCK

Based on what we know, in other Canadian cities, anyone could ask Oceana to send a sampling kit. Anyone is able to go to any restaurant or retail outlet for a sample and send it back to Oceana. Samples are then processed by a professional laboratory. In other words, Oceana has gone fishing – fishing for samples without using a scientific approach. It may have happened in Montreal as well.

To add to these questionable practices, it seems that suspect species were targeted by participants and the samples collected were purposefully not representative of seafood consumption habits. Oceana simply presented results that supported a narrative of rampant fraudulence. Food fraud is an issue we need to address, but the 61% is perhaps a little inflated. More than 100 scientific studies on mislabelling of seafood products have been conducted in dozens of countries to date. Tens of thousands of samples have been tested on hundreds of species. Los Angeles had the highest rate of mislabelling at 41%, but the report only looked at a handful of sushi restaurants. We are far from the 61% coming out of Montreal and other Canadian cities. The United Nations recently stated that anywhere between 20% to 25% of all fish and seafood sold in the Western world is mislabelled. Our country has a great number of wonderful, accountable restaurants and responsible grocers. We shouldn’t unfairly judge all establishments the same way.

MAJOR SEAFOOD FRAUD STUDIES SINCE 2015

Nevertheless, Oceana’s work reminds us that seafood-related food fraud is a widespread problem with dramatic consequences for public health and species conservation. More attention is being given to fish and seafood labelling in recent years; the Canadian Food Inspection Agency in Ottawa and some provinces like Quebec and Ontario have been working on this issue for a while now. However, fish and seafood fraud remain highly misunderstood and complex issues.

Oceana recommends that we implement a boat-to-plate traceability program to protect consumers. In an ideal world, it could work. But things do get muddy between the Canadian Food Inspection Agency and Fisheries and Oceans Canada, which does not even consider fish and seafood as food per se. What is required is random mandatory testing by businesses and the federal agency combined. Certification programs should also receive some support to reduce the risk of fraud. Most importantly though, no clear definition of food fraud is provided, and no laws or regulations directly address food fraud in Canada. This needs to be rectified as soon as possible so regulations can better align with our aspirations for eliminating food fraud across the board. In doing so, getting provinces and cities involved will only get easier. 

The most powerful weapon against food fraud will remain public pressure. For that, Ireland is an interesting case. The mislabelling rate there for fish and seafood went from 34% many years ago to 0%, just because everyone was talking about it. Public pressure-imposed discipline across the entire supply chain resulted in outright eliminating fish and seafood fraud. This could happen in Canada as well. 

Even if its methodology is questionable at best, Oceana should be credited for its work on seafood fraud and making sure we keep this issue on our radars.

Oceana Canada Response: Ottawa must act now on improving seafood traceability. 

By Sayara Thurston

Oceana Canada agrees with Mr. Charlebois that seafood fraud is a real problem. In fact, no amount of seafood fraud or mislabelling is acceptable. 

Oceana Canada’s most recent DNA testing found that 34.4 per cent of seafood samples were swapped species — for example, tilapia labelled as snapper — and a further 26.6 per cent were mislabelled because the name on the product didn’t correspond to accepted market names for seafood sold in Canada. The testing was conducted exclusively by Oceana Canada staff, and detailed results, the methodology (also used by CFIA) and information about the lab testing process are all available at oceana.ca. 

For consumers and responsible seafood businesses to make more informed decisions, information must follow fish from the point of capture to the point of sale, including the scientific name and catch documentation. Oceana Canada’s recommendations are based on the EU’s tested and proven model.  The EU’s boat-to-plate traceability regulations have resulted in significantly reduced mislabelling rates and are ensuring a safe, legal and transparent seafood supply chain.

Study after study shows that seafood fraud is a serious and persistent problem that must be addressed. As Mr. Charlebois says, public pressure is real, and showing signs of progress:  three of Canada’s federal political parties have now recognized that seafood traceability can combat seafood fraud by including it in their election platforms. The government must now take action.

Dr. Sylvain Charlebois is Dean of the Faculty of Management at Dalhousie University in Halifax. Also at Dalhousie, he is Professor in food distribution and policy in the Faculty of Agriculture. His current research interest lies in the broad area of food distribution, security and safety, and has published four books and many peer-reviewed journal articles in several publications. His research has been featured in a number of newspapers, including The Economist, the New York Times, the Boston Globe, the Wall Street Journal, Foreign Affairs, the Globe & Mail, the National Post and the Toronto Star. Follow him on twitter @scharleb.

Alberta-Based Men’s Lifestyle Retailer ‘Adesso Man’ Eyes National Store Expansion

PHOTO: ADESSO MAN

Calgary-based retailer Adesso Man began in 2016 with a mission to provide the latest in men’s lifestyle products at an accessible price point without compromising on quality.

And Abdul Ahmed, founder and CEO of the company, said the goal is to turn the brand into a global retailer in the coming years.

“We’re a men’s lifestyle brand and we specialize in men’s products. Kind of a full range from accessories, lifestyle goods, leather products, gifts. We want to create a one-stop-shop for men’s fashion, style, and personal care products so that we can ultimately help people feel more confident in their daily life,” said Ahmed.

“We have a five, 10-year plan we do want to eventually be a global company. We started off locally. We want to spread nationally. We want to expand into Toronto and Vancouver and across country hopefully in the next two or three years.”

PHOTO: ADESSO MAN

Ahmed said the company began in May 2016 with its first store in Edmonton in the Londonderry Mall. Currently, the company has two locations in Calgary in CF Market Mall and Southcentre Mall. It will have a couple of pop-ups over the holiday season in Kingsway Mall in Edmonton and the downtown Calgary Bow Valley Square. It also usually has a pop-up at the Calgary Farmers’ Market.

“We’re looking at Toronto for the spring/summer of 2020,” said Ahmed. “We’re going to do some locations temp locations to try out the market next year in Toronto.”

Ahmed said the business was started to cater to the niche in the market for men’s accessories and lifestyle products.

“We found that it was very hard to find European-inspired products that were a little bit unique, that were different, that were bold but were also affordable and accessible at the same time. Especially in the men’s market we had to go to four or five different places to get everything we needed. So we wanted to create convenience as well as offer really unique products,” he said.

“We originally were just going to be an accessory company and an accessory brand but our brand’s kind of expanded over the last three years to really cater to more of the lifestyle for men. Now we’ve expanded into grooming and leather goods and gifts. A little bit of apparel as well. Over time, our vision has changed a little bit.

“The problem we’re speaking to or trying to solve is to really help men feel more confident through fashion and personal care. We really want to offer an outlet for men to be expressive and feel comfortable and non-judged and really help them feel good through the platform that we have which is through fashion accessories and personal care and grooming and gifts.”

Ahmed said the company’s initial target market is men between the ages of 22 and 38 – in that Millennial kind of space. But it also has a plus 38 years old group which is different and looks for more classic, quality goods, and more conservative items. The brand also appeals to female customers who are looking for gifts for the men in their lives.

As he looks to the future, Ahmed said the goal is to expand.

“We definitely want to be a major player regionally and we’re looking to expand nationally into bigger markets as well. We see Adesso being the go-to men’s lifestyle brand in Canada and the United States within the next 10 years. Being a recognized brand, the brand of choice for men that are looking to really elevate the way that they look and feel,” said Ahmed.

“In the next three years depending on how things go, we want to have a presence in major cities. So eight to 10 stores would be highly doable but we also want to really expand our reach in North America through our online platform as well. So really being more global and having a lot more reach in the ecommerce space. Obviously having the pop-up stores and stores is great for presence and from a service standpoint too to really get our brand message across and let people experience the brand.

“I totally believe in brick and mortar. It’s highly important for our business and any retail business. But just to make it more interactive and more experienced based. Whereas from a reach perspective we definitely want to expand into the United States in the next two years and really start our growth in the U.S. It’s a large market and it’s a lot of opportunity for us as well.”

In Italian, the word adesso means ‘now’; ‘In the moment.’

“One of our business partners is Italian. When we first started out we were very inspired by Italian fashion. A lot of our products were coming from Italy. We were looking for something that resonated with our brand and who we were,” said Ahmed.

“Adesso means ‘now’ and ‘in the moment’. Current. It kind of signifies that we’re always going to be in the now, on trend and it’s also really easy to remember. It’s an easy name that resonates with people.”

JLL Releases Study Indicating Strong Retail Fundamentals and Record-Low Vacancy Rates in Canada

PHOTO: RETAIL INSIDER (QUEEN STREET, TORONTO)

By Mario Toneguzzi

Retail fundamentals in Canada remain strong as vacancy rates reached a record low in key markets and for most property types in the second quarter of this year, according to commercial real estate firm JLL’s .

The report says the Canadian retail market remains robust well into 2019 with the lowest vacancy recorded in four years at 2.3 per cent as net absorption continues to surpass deliveries. 

PHOTO: CADILLAC FAIRVIEW (TORONTO EATON CENTRE)

“The average asking rent growth has decelerated from its peak last year but remains positive. General retail reached the highest net absorption in the first half of the year with over 2.2 million square feet, followed by shopping centres with 1.4 million square feet of net absorption year-to-date,” says the report. 

“In contrast, malls have seen a slightly negative net absorption and a corresponding marginal increase in vacancy rates. This is particularly prevalent in Western Canada, where landlords are keen on redeveloping retail spaces, repositioning existing tenants or bringing new options to become more competitive in the marketplace.

PHOTO: JLL

“Overall retail sales growth in Canada is lower than historic averages but remains robust, growing at 1.9 per cent in the first half of 2019 compared to the same period in 2018. Montreal and Toronto are pulling that average up, however, growing by 6.4 and 4.5 per cent, respectively. The top contributors to sales growth are grocery, beer, wine, and liquor; jewellery, luggage and leather goods; and furniture sales. Cannabis sales have also seen exponential growth in Canada with the recent legalization of its use for recreational purposes.”

JLL described Canada, and in particular, Toronto and Vancouver as being in their “peaking market” category in the real estate cycle. Montreal and Ottawa were in the “rising market” category while Calgary and Edmonton were in “bottoming market” in the cycle.

Of course, the retail industry’s health is predicated on the overall economy.

“The Canadian economy picked up in the second quarter of this year. Overall, GDP grew at an annualized rate of 3.7 per cent, marking the best performance since 2017. Despite weak consumption and business investments, household disposable income has increased. As global economic conditions become less favourable, the trends Canada is seeing are certainly encouraging,” says the JLL report. “Strong job growth pushed unemployment down to 5.4 per cent this May, the lowest rate in 43 years. Consumer confidence remains above historical average levels and consumer spending has gradually grown each quarter over the past two years. 

“Going forward, Canada will confront short and mid-term challenges that may undermine its growth. The challenges include uncertainty surrounding the upcoming federal election, high household debt, slower housing activity, U.S.-China trade tensions, a possible U.S. recession, and moderating global economic growth. However, Canada has rising energy prices, manageable federal finances, and a growing labour population to help abate these threats and challenges. We expect Canada to continue its growth trajectory on par with its historic average.”

The report says Canada, like the U.S., is facing growing pressures of increasing rates of online sales, cost-efficiency of operating businesses, and the surplus of department store space from mid-price department store closures. But Canada has not been affected by the wave of U.S. store closures as one may think. Canada has about 40 per cent less shopping centre space per capita than the U.S., which has put Canada at an advantage during the wave of closures over the past few years. 

The influx of international retailers has reinforced Canada’s role as an entry point for U.S. brands looking to open stores abroad and Asian retailers that are trying to establish outposts in North America, says the report.

“Reflecting on Target and Sears’ Canadian experience, many brands have preferred to test the waters and gain small wins before rolling out multiple stores nation-wide,” the report says.

PHOTO: YORKDALE SHOPPING CENTRE

L.L. Bean opened its first store in the Greater Toronto Area (GTA) late this summer after launching a Canadian e-commerce site and selling products through Canadian retailers. L.A.-based Reformation opened its first location outside of the U.S. just north of Toronto at Yorkdale Shopping Centre in July. Ulta Beauty has announced the opening of its first international store in Canada sometime in 2020. Chick-fil-A opened its first Toronto location at Bloor and Yonge Streets, steps away from Nordstrom Rack and McEwan. UNTUCKit has plans to open additional stores following the success of its first storefront in Toronto that opened at the end of 2018. 

“After launching its first Canadian physical presence in 2017, digital native, mattress-in-a box retailer Casper now has locations in the GTA, Calgary, and Vancouver. Eyewear Warby Parker expands West with its first location in Vancouver’s Kitsilano in February 2019. Seafood City, a California-based Filipino-focused grocer, plans its expansion nationwide in partnership with fast-food chain Jollibee,” states the JLL report. 

“Japanese dollar store, Oomomo, opened the doors to its first Toronto location last December. MUMUSO, a Korean-inspired dollar store, opened its first Toronto location this July at the North York Centre. Though the brand is based in China, its business and products are marketed as Korean. Innisfree, an all-natural cosmetic brand based in South Korea opened its first Canadian store at Yorkdale Shopping Centre this summer. Korean-inspired retailer, Ximivogue is coming to Toronto at CF Fairview Mall and CF Sherway Gardens. The Japanese fashion retailer, Uniqlo opened its first Canadian store at the CF Toronto Eaton Centre in 2016. The retailer now has 11 stores and has just opened its first Alberta storefront at the West Edmonton Mall. Japanese minimalist style retailer Muji opened its first location in 2014 on Dundas Street in Toronto. After undergoing major renovations, the space reopened as the first flagship in Eastern Canada. 

Miniso, a Chinese-owned and operated company branding itself as a Japanese retailer, launched in Canada in 2017 and rapidly opened 67 stores across the country, with another 11 announced. This July, Miniso was granted credit protection for undercapitalization and intends to continue to operate the stores. With the goal to reach 100 branches over the next five years, Filipino fast-food restaurant Jollibee continues to expand in Canada and opened this August its fifth location in Edmonton, after Winnipeg and the GTA. Dutch retailer, HEMA, announced it will be opening in Ontario later this year thanks to a partnership with Walmart. The value-based retailer sells household goods, beauty products, clothing, and more. 

PHOTO: RETAIL INSIDER (WEST EDMONTON MALL)

“Italian food concept Eataly is set to open at the Manulife Centre in the Bloor-Yorkville corridor in Toronto this fall. It is rumoured that the concept will expand into Montreal and Vancouver in the future. The French sporting goods retailer, Décathlon, has announced expansion plans following its first successful storefront location in Quebec.”

JLL’s report also says Canada’s luxury market continues to grow and thrive with the continued concentration of luxury brands in Toronto’s Bloor-Yorkville corridor and Vancouver’s Robson Street corridor; the solidification of Yorkdale Shopping Centre as a luxury node where several international luxury brands have decided to establish their flagship; the emergence of luxury in West Edmonton Mall with new doors from Louis Vuitton and SJP by Sarah Jessica Parker; the under construction Royalmount in Montreal that will dedicate significant space to luxury brands. 

PHOTO: ROBSON STREET (VANCOUVER)

All in all, the report provides a comprehensive overview of the state of Canada‘s retail market, not only covering key trends and developments across the country, but also exploring the nuances of its major markets. It ultimately demonstrates with numerous examples and market indicators why retail in Canada, despite constant pressure and change, remains favourable.

*Partner content. To work with Retail Insider, email: craig@retail-insider.com

RioCan Intensifying Retail Properties in Canada to Create High-Density Mixed-Use Communities

PHOTO: RIOCAN (KING AND PORTLAND CENTRE, TORONTO)

RioCan Real Estate Investment Trust, through its residential brand RioCan Living, is shaping the communities where Canadians shop, live, and work by delivering best-in-class purpose-built rental units and condos along Canada’s most prominent transit corridors. Many projects involve site intensification of existing RioCan retail sites.

The real estate company has 41 potential residential projects, 20,000 potential units, 2,700 units currently under construction, 2,100 additional units underway by 2021, and they’re all located in Canada’s major markets.

The mixed-use developments are in high growth, high population, and transit-oriented major markets where existing retail properties may otherwise be under-utilized.

RioCan is one of Canada’s first and largest REITs focused on the ownership, management, and development of high-quality, mixed-use properties with strategic positioning in Canada’s six major markets.

“We have seen a trend towards urbanization and we’ve seen a trend toward transit-oriented, mixed-use developments for quite some time. We’ve got a lot of really well located retail properties that have always been an important component to any community but we also sense that in order to be a thoughtful land owner and city builder that a lot of these properties that are sort of 25 per cent coverage – where you’ve got a building covering only 25 per cent of the land it’s on – is certainly not at that property’s highest and best use to be utilized as such,” said Jonathan Gitlin, RioCan President and Chief Operating Officer.

“That there’s a much more important community building exercise that we can undertake which underscores the need for housing, underscores the need for a proper community hub, and underscores the need for new and dynamic retail which all makes up a part of a lot of these mixed-use developments. Based on all those components and ideas, we have gone about reviewing our portfolio of retail properties and where we think those themes all connect to a property we’ve really gone about rezoning them, ensuring that the market and area around us will absorb the property both in the sense that they will welcome it this new more dynamic mixed-use development and another prominent feature is making sure that the city, the municipality, likes the exercise because they are promoting a lot of density where there is transit. And we happen to have a lot of properties where there is transit.”

RioCan has an enterprise value of $14.3 billion with 230 properties and net leasable area of 39.1 million square feet.

The company’s strategy is to concentrate within major markets, drive organic growth, unlock intrinsic value, and mitigate risk effectively.

Those six markets have 97.8 per cent committed occupancy.

PHOTO: RIOCAN (BRENTWOOD VILLAGE & BRIO, CALGARY)

In the six major Canadian markets, RioCan has 175 assets with 30.9 million square feet. The breakdown of the number of assets and space for those cities is: Vancouver, seven, 1.8 million square feet; Edmonton, 12, two million square feet; Calgary 14, 3.4 million square feet; Ottawa, 36, 4.8 million square feet; Toronto, 86, 15.9 million square feet; and Montreal, 20, three million square feet.

RioCan has a total development pipeline of 27.2 million square feet – 48 per cent or 13.1 million square feet has zoning approval, 27 per cent or 7.3 million square feet has applications submitted, and 25 per cent or 6.8 million square feet is future estimated density.

RioCan has 2,700 residential units under construction with an additional 2,100 units underway by 2021.

PHOTO: RIOCAN (5TH & 3RD EAST VILLAGE, CALGARY)

“We have really tried to create a consistent portfolio so that when people see a RioCan Living building they know it because of certain attributes. One obviously the biggest is that they’re transit-oriented. They will typically be on or near LRT or subway lines or in some cases BRT lines. That is certainly something that is consistent throughout all of our mixed-use developments,” said Gitlin.

“The other is that they are operated in a first-class manner. They’ve got modern amenities. They are new purpose-built rental buildings. They’re also representative of really good mixed-use environments where we’ve married retail and residential in a really good manner. Being Canada’s largest retail landlord we bring a lot to the table being able to curate a perfect mix of retail that serves as a great amenity to the residents above and I think it also benefits the retailers below having these residents above them. We really strive to create that perfect balance between the retail and the residential.

“The other consistent theme is always ensuring what we build fits into the fabric of the community in which those properties are located. So we’re not just building for scale for the purpose of gaining scale. We’re building something that we usually go out to the community beforehand, consult with them, get their sense of what is needed in that neighbourhood.”

PHOTO: RIOCAN (NATIONS, TORONTO)

Part of RioCan’s success is staying ahead of changing consumer trends. The increasing strength and quality of its income is a result of growth in necessity-based and service-oriented tenants within its portfolio. In fact, as of the second quarter of this year, 74 per cent of rent came from necessity-based and service-oriented tenants. Also, no single tenant represents more than five per cent of annualized rental revenue.

PHOTO: RIOCAN (LAWRENCE ALLEN CENTRE, TORONTO)

“Our portfolio alone we’ve seen a pretty dramatic shift over the last call it decade or so where we’ve seen the amount of apparel and department stores as a portion of our overall portfolio shrink quite dramatically. It’s about eight per cent now and that’s down about eight per cent in the last 10 or 11 years. So you’ve seen a shift over towards in our portfolio more necessity-based goods. Grocery and personal services and value retailers like dollar stores. Specialty retailers. Even the apparel business has shifted dramatically where we are by and large getting out of that sort of middle of the road apparel purveyors and we’re getting more into the Winners and Marshalls and more value-oriented tenants,” said Gitlin.

PHOTO: RIOCAN (THE WELL CONDOS, TORONTO)

“The consumer out there wants value and we’re there to provide it. And these uses are harder to be disintermediated by the internet and internet shopping.”

Gitlin said that over the last few years RioCan has accelerated its shift towards being a major market portfolio.

“We announced it two years ago in 2017. At the end of 2017, we came out and said we want to be in a position where 90 per cent of our income is coming in from the six major markets in Canada and around 50 per cent of our income is coming in from the Greater Toronto Area. And we’re just about to succeed in both of those objectives and that’s simply a by-product of the fact that there’s just simply more population growth in those six markets,” he said.

“We speak to our retail tenants all the time, engage where their interest lies. More often than not, they’re looking to grow in those markets over some others. That to us has been a key strategic shift and it’s really a bit of a game change for us from the way we operated our business. Between that and our evolution to focus on developing these mixed-use communities that covers a significant amount of how we are changing our way of doing business.”