Gene Detroyer

Consumers Go for Bad Idea and Buy Food in Tire Stores

February 25, 2010

FROM RETAILWIRE:
In a RetailWire poll back in October 2008, respondents were asked, "How difficult is it for a retailer not in the food business to succeed at selling groceries?" It appears as though Canadian Tire is beating the poll's odds as the chain has expanded food sales.... What challenges will Canadian Tire face if it significantly ramps up its food operations?      [more...]

Did we ask the same questions when Wal-Mart started building grocery aisles?

Since we are revisiting comments of October '08, let me repeat mine. They seem to be as relevant....

Canadian Tire seems like a fascinating retailer. I have never been to one, but my Canadian friends seem to always be talking about it and always have a reason for going there. Canadian Tire is surely getting more traffic and more frequency than a "tire store" would be expected to experience. Clearly Canadian Tire has built a brand that transcends "Tire." It is that branding that opens multiple retailing opportunities.

From the article, I would hardly assume that they are going to be the next big grocery chain in Canada. The groceries they are bringing in are of limited assortment and not illogical extensions of soft drinks and snacks. So far it sounds like a C-store assortment more than a Loblaws assortment. If so, my bet is they are successful.

But, what also strikes me as interesting is that Canadian Tire has had some success in holding off the Wal-Mart invasion. Could their long-term plan in fact be to measure up against Wal-Mart? Certainly, a challenging objective if they are. But, let's not get carried away with where they are going. They are simply using a domino principal in growing their business. That is "what can we sell to our current customers?" And, "can we bring a bit more traffic by expanding our offerings?" The drug chains in the U.S. have followed the exact same strategy, with bread, milk, cereal and frozen pizza...and don't forget the ice cream!