Canadian Retailer - Winter 2013 - 29

as the press portrays but it’s not an
economy when retailers can count
on major sales increases.”
According to Powell, London
Drugs has done “better than the
pack in lean times” by holding fast to
retail fundamentals.
That means making every opportunity for a sale count—offering the
right product mix, reaching the right
customers and offering the right price.
As a pharmacy and general merchandise retailer, Powell says London Drugs can play the volleys of the
economy in ways that niche retailers
cannot. If customers aren’t willing
to make big ticket buys in London
Drugs’ electronics department, the
store can still nab sales on prescriptions or other necessities.

floor than to lose them,” he explains.
Making the attempt to offer a better
price—and maybe even matching
prices—builds the kinds of customer
relationships retailers need to get
through tough times.
“We’re customer-driven and we don’t
take things for granted,” Powell says.
Looking for solutions

Has a stagnant economy and an
anxious consumer hurt retail?
“It depends on who you’re talking
about,” says Andy Gross, CEO of
Giant Tiger Stores.
For Giant Tiger’s customer base—
the paycheque-to-paycheque consumer—prolonged economic stagnation, a slack job market and mounting
household debt is a daily worry. These

isn’t a large enough country—Gross
says there are enough outdated tariffs that, if changed or removed,
could make a noticeable difference
to the retail business in Canada and
to the lives of Canadian shoppers.
“It’s a big enough challenge competing with large Canadian retailers [without outdated tariffs raising
operating costs].”
But Gross says it’s a long-term
goal. What matters right now is the
customer, and Gross says retailers
need to do all they can to earn the
trust and loyalty of nervous, budgetconscious consumers.
“You need to know who the customer is. You need to stay focused on
who they are and what they need.”
Lasting change

“I don't think hunkered down is going to cut
it in this kind of environment. You have to be
up there fighting, you have got to be trying
things that are different.”

— MAUREEN ATKINSON
J.C. Willams Group

London Drugs is also using new
technologies to create an enticing
environment for nervous consumers. Recently, the B.C.-based retailer
adopted tablet computers as part of
the customer service experience. The
tablets give floor staff quick access
to product information and—importantly—help to combat showrooming,
the phenomenon where customers browse products at a brick-andmortar retailer but make purchases
through an online seller.
London Drugs encourages floor
staff to engage customers in discussions about product pricing. If customers believe they can find a better price
online, the floor staff can search the
competitor listing and determine if
London Drugs can offer a better price.
It’s a proposition that risks cutting
into margins but Powell says it also
creates an opportunity to talk to customers face-to-face.
“It’s better to review price discrepancies with the customers on the

customers are most likely to put off
spending for months, a prospect that
gives Gross a reason for concern.
“It could be more serious for us,”
Gross says.
The post-recession stagnation has
only exacerbated a problem Gross
says has been undermining stores like
his: cross-border shopping. Budgetconscious consumers go where they
can find savings—nationalism and
community-mindedness be damned.
“They can save—they know they
can save big—and they do save.”
Gross cites a report released by
BMO recently that pegged the cost of
cross-border shopping at $20-billion.
“That’s big—as big as Wal-mart in
Canada.”
Part of the solution has to be modernized trade policies, Gross says.
Antiquated tariffs add costs to Canadian retailers that inhibit competition. While Canadians won’t ever
have the kind of purchasing power
that U.S. firms have—Canada just

One of the lasting effects of the
post-recession retail landscape will
be the entrenchment of aggressive
promotions, says Mike Moffatt, an
economist at the Richard Ivey School
of Business.
To keep up with U.S. retailers, many
Canadian retailers tapped into “Black
Friday,” the U.S. Thanksgiving retail
binge. Many more Canadian retailers, Moffatt observes, are following
the lead of U.S. retail and offering
incentives like free shipping, free returns for online purchases and more
aggressive online discounting.
“That’s really the effect. Because
of this fear that American consumers won’t spend, retailers are offering
these incentives, and some of these
incentives are already making their
way into Canada,” explains Moffatt.
He believes this kind of retailing is
here to stay. Certainly, it won’t slow
down until the economy recuperates
and consumers have more income at
their disposal.
“There is a real push out there for
retailers to try and attract people because there is this concern that consumers will pull back.”

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Canadian Retailer - Winter 2013

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