This month marks the 25th anniversary of the bankruptcy of catalogue-based Canadian retail chain Consumers Distributing — the reminder was announced on the weekend in Halifax ReTales. Consumers Distributing had stores in all provinces in Canada and for years was a part of Canadian retail history.
The main product focus of Consumers Distributing was jewellery, appliances, kitchenware, toys, personal care, discount furniture, electronics and seasonal goods. Stores were laid out in a series of glass cabinets that displayed merchandise. Customers would select their products from catalogues located throughout the store, filling out a request form for the item they desired. This form was given to a store clerk and processed for fulfilment, with the goods stored in non-public space in a warehouse system stock area behind the counters.
Two main catalogues launched yearly with seasonal mini-catalogues issued more frequently to highlight various items. The entire line changed twice a year and new items were introduced only with a new catalogue. Specialty lines such as batteries, film and some jewellery lines on counter racks were not found in the catalogue. Photo processing was a service available in many stores.
Those who remember the retailer may realize its potential today as a business model — if it had maintained operations and innovated, it could have been what Amazon is for retail today. The business model of Consumers Distributing has been described as “Internet shopping before the Internet”.
At the height of its success, Consumers Distributing had 243 stores in Canada and 217 in the United States. The chain was founded in 1957 by Jack Stupp and Sydney Druckman in Toronto and the company was taken public in 1969. In 1988, the chain’s revenues surpassed $1 billion annually. Despite its success, customers often complained of products being out of stock which led to a concept called the ‘Flashboard’ which was a steel bulletin board with magnetic catalogue numbers for out of stock items.
In the 1980s the retailer launched a chain of toy stores called Toy City (Toyville in Quebec) and in 1990 stores became Toy City/Consumers Distributing before being shuttered in the mid 90s. Quebec-based grocer Provigo bought Consumers Distributing in 1987 and it was sold in 1993 to a Belgian holding company.
Stocking issues remained a problem for the retailer into the 1990s when it undertook several initiatives to dispel its out-of-stock perception. That included launching ‘super stores’ that had all of the in-stock products on display, as well as free home delivery or store to store transfer for items that were not in stock. Consumers Distributing also implemented a state-of-the-art inventory system that could check the availability of other stores in real time, and would suggest alternate products at the store which were in stock.
The retailer was one of the first in Canada to implement the real-time stock checking and prepayment for products available at other branches and the main warehouse. These initiatives, including the superstore expansion, free delivery, and costly new inventory management software led to the company being overextended financially.
High operating expenses along with increasing competition and changing retailing trends (such as warehouse format stores) contributed to the chains demise. Other issues contributing to this was deflation in several product categories including jewellery and electronics as well a lingering recession and the expansion of Walmart into Canada all contributed to the company’s bankruptcy in 1996.
In 2006, former Consumers Distributing employee Marc King relaunched the company as an online retailer until 2013 when it was shuttered amid controversy — King was accused of owing back wages to employees. In May 2015, the company was issued a compliance order by Consumer Protection B.C. for deceptive acts and practices and for failing to issue refunds.
Interesting, retailer Argos, modelled on the Consumers Distributing format, continues to succeed in Ireland and the UK. And interestingly as well, there is still a Consumers Distributing website selling goods with a Canadian office in Montreal and a US office in Florida.