Winnipeg | Retail

[CoryB]

Originally Posted by BAKGUY

The Bay had to expand after Eatons closed as their groceteria did $10 million a year. The Bay beagn doing near that after awhile.

Pretty sure specific sales numbers are not public knowledge so it is impossible to source or verify. That said gross sales v net revenue is something important to look at here. Hudson Bay never operated a grocery supply chain so they were likely buying from one of the big players (Sobeys, Weston, Safeway) even when they operated the Zeller's chain.

Originally Posted by OTA in Winnipeg

^They should have tried harder. It's not like they didn't/don't have resources. That place was a money maker.

Originally Posted by flatlander

They may or may not have operated it but they certainly could've found someone who could.

Would love to see this public, citable source that people kept referencing indirectly that the grocery section of the downtown bay store "was a money maker". If it was bringing in "$10 million a year" in net revenue that is the exact sort of information you shop behind an NDA to get someone to take over the operations. That no one stepped in to take it over says lots, ie it was more likely a break even operation or even a slight loss leader.

Originally Posted by buzzg

I'm sure they did, but no other grocers wanted to. HBC was/would be able to operate the grocery on thinner margins then others: they own the building, and the traffic the store brought in had a big impact on the core Bay business. A third party would be paying rent, and the boost in Bay sales does not benefit them.

That would be quite an accomplishment. Especially without operating a large supply chain of their own to leverage volume discounts from suppliers like the big players in the industry do.

Originally Posted by Industry Canada

In 2017, Canada's pre-tax profit margin in this industry was 1.5%.

Source: Industry Canada

Also if this wasn't a major disadvantage for Zeller's/Hudson Bay why did Target specifically partner with Sobey's to be their food and grocery supplier.

Originally Posted by Sobey's Press Release

Sobeys Inc. and Target Canada Co. announced today they have entered into a long-term wholesale distribution arrangement that will see Sobeys supply Target stores in Canada with select food and grocery products.

Sobey's Press Release on Target deal

--

Originally Posted by esquire

Not a good sign for the chain... things must be getting dire.

I have said it before, Hudson's Bay as a whole is in significant risk of continuing as a going concern. They made a number of fairly high risk moves over the last approximately 10 years. Some went in their favor (selling Zeller's to Target) and others have been really poor choices (opening their first ever stores in Europe). My gut feel (no sources) is Hudson Bay is going to hit creditor protection before the year is done and attempt to continue as a going concern. The looming fear is Eaton's (1.0) went through the same process and was quickly back for full bankruptcy and planned to stop operations completely. Then Sears Canada swooped in to pickup the massive tax credits Eaton's 1.0 had. At the time that seemed like a reasonable plan but somehow was very poorly executed. It likely didn't contribute much though to overall pulling Sears Canada down as the US leadership did a heck of a job there.

[bomberjet]

I like shopping at the Bay. But with all the low cost competitors, I can see why people get sticker shock and never come back.

[buzzg]

Originally Posted by cslusarc

Apparently, the Francophone media has reported that Hudson's Bay has defaulted on its rent on some of its locations in Québec. They have had their leases terminated, but are the stores are still open.

One of the smaller city stores was announced to be closing the same day as Downtown Winnipeg. I heard there were more underperforming stores to come that COVID will kill.

[esquire]

Originally Posted by bomberjet

I like shopping at the Bay. But with all the low cost competitors, I can see why people get sticker shock and never come back.

Retail observers have been talking for years about the stratification of retail... I suppose it follows that department stores, which tended to cater to the middle range, would get squeezed out as a result of this trend.

[esquire]

Originally Posted by buzzg

One of the smaller city stores was announced to be closing the same day as Downtown Winnipeg. I heard there were more underperforming stores to come that COVID will kill.

Our world is going to look a lot different once covid settles down... there are so many stores and institutions that were just kind of hanging on, coasting along that are going to get wiped out now.

A classic example is something like a curling club... curling hasn't been hugely popular in decades, but just enough people played to keep the lights on in the clubs. With a couple of potentially lost seasons looming, it's surely going to be the end of many curling clubs across Canada, and they won't come back. It probably would have happened eventually anyway, but covid is accelerating the process greatly.

It's the same thing with The Bay.

[buzzg]

I actually think curling is going to see an uptick this year – less people travelling, looking for more things to do. Activity is on the rise. Snowbirds are probably the #1 target for curling rinks, and most will be home this year.

I know a few people who are starting curling again for the first time in years.

[esquire]

^ A lot of the 55+ crowd, which is the bedrock of many curling clubs, will have to stay away. I've seen articles saying that some clubs are hurting from the lack of activity, the fact that people aren't socializing in the lounges, etc.

[BAKGUY]

Originally Posted by CoryB

Pretty sure specific sales numbers are not public knowledge so it is impossible to source or verify. That said gross sales v net revenue is something important to look at here. Hudson Bay never operated a grocery supply chain so they were likely buying from one of the big players (Sobeys, Weston, Safeway) even when they operated the Zeller's chain.






Would love to see this public, citable source that people kept referencing indirectly that the grocery section of the downtown bay store "was a money maker". If it was bringing in "$10 million a year" in net revenue that is the exact sort of information you shop behind an NDA to get someone to take over the operations. That no one stepped in to take it over says lots, ie it was more likely a break even operation or even a slight loss leader.



That would be quite an accomplishment. Especially without operating a large supply chain of their own to leverage volume discounts from suppliers like the big players in the industry do.

Source: Industry Canada

Also if this wasn't a major disadvantage for Zeller's/Hudson Bay why did Target specifically partner with Sobey's to be their food and grocery supplier.

Sobey's Press Release on Target deal

--



I have said it before, Hudson's Bay as a whole is in significant risk of continuing as a going concern. They made a number of fairly high risk moves over the last approximately 10 years. Some went in their favor (selling Zeller's to Target) and others have been really poor choices (opening their first ever stores in Europe). My gut feel (no sources) is Hudson Bay is going to hit creditor protection before the year is done and attempt to continue as a going concern. The looming fear is Eaton's (1.0) went through the same process and was quickly back for full bankruptcy and planned to stop operations completely. Then Sears Canada swooped in to pickup the massive tax credits Eaton's 1.0 had. At the time that seemed like a reasonable plan but somehow was very poorly executed. It likely didn't contribute much though to overall pulling Sears Canada down as the US leadership did a heck of a job there.

I know you love to argue with em and most on here. I did work for all 3 dept stores. I was @ Eatons in management up to the closure and I may not have the paperwork to prove it to you to back up my comment nor should it be privy..but that is what was happening. Any comments I have made about HBC or Sears, you were thrilled to argue over those statements yet I worked these places as Eatons,then HBC afterwards for a number of years.... and @ Sears up to one of the store closures. Go ahead, have at it. Lecture me ..I am Waiting. I will likely not reply as I have grown tired of your challenging any others statements...I am likely not going to waste my life arguing with strangers on here. I worked in retail all my life but you always know better. If I did not know what I was saying I would not say it. Have a terrific day.

[Andy6]

Originally Posted by esquire

Our world is going to look a lot different once covid settles down... there are so many stores and institutions that were just kind of hanging on, coasting along that are going to get wiped out now.

A classic example is something like a curling club... curling hasn't been hugely popular in decades, but just enough people played to keep the lights on in the clubs. With a couple of potentially lost seasons looming, it's surely going to be the end of many curling clubs across Canada, and they won't come back. It probably would have happened eventually anyway, but covid is accelerating the process greatly.

It's the same thing with The Bay.

And the CFL.

[robertocarlos]

Originally Posted by bomberjet

I like shopping at the Bay. But with all the low cost competitors, I can see why people get sticker shock and never come back.

I paid 4 dollars at GT for 4 nice wash-cloths made in Bangladesh. The next week they were 50 cents each. I will never shop at Giant Tiger again!

[robertocarlos]

I shopped at the Bay grocery store. It was busy enough to turn a profit.

[LilZebra]

Originally Posted by esquire

Our world is going to look a lot different once covid settles down... there are so many stores and institutions that were just kind of hanging on, coasting along that are going to get wiped out now.

A classic example is something like a curling club... curling hasn't been hugely popular in decades, but just enough people played to keep the lights on in the clubs. With a couple of potentially lost seasons looming, it's surely going to be the end of many curling clubs across Canada, and they won't come back. It probably would have happened eventually anyway, but covid is accelerating the process greatly.

It's the same thing with The Bay.

Why go out with your team to play curling when you can curl up on your sofa and watch something on Netflix.

Stupid culture we live in today.

[bomberjet]

Originally Posted by robertocarlos

I paid 4 dollars at GT for 4 nice wash-cloths made in Bangladesh. The next week they were 50 cents each. I will never shop at Giant Tiger again!

hahaha see how is the bay supposed to compete with that!

[esquire]

Originally Posted by Andy6

And the CFL.

Possibly, although I wouldn't necessarily say that given that as a national entity, the CFL still brings in a fair bit of money... the problem there is that the CFL is used to spending that much, plus a little bit more. The CFL may have to shrink financially to adjust to its new reality, but it has room to do that.

Conversely, a local curling club is likely a shoestring operation to begin with. Once it eliminates all expenditures beyond the bare minimum required to keep the lights on, there isn't really much wiggle room left.

[CoryB]

Originally Posted by robertocarlos

I shopped at the Bay grocery store. It was busy enough to turn a profit.

That's just it though, taking the "$10 million in sales" reported but unsourced in this thread and the Industry Canada pre-tax industry profit margin of 1.5% means that revenue is $150,000 pre-tax for the whole year. That is significantly worse than if you tied on that same investment in GICs for 12 months and had zero risk. As I covered in my previous post Hudson Bay is likely below average on the profit margin as it lacks both the volume in and supply chain in the grocery space, even at its peak. This basically confirms the groceries in the Bay basement were effective a loss leader (ie something there to only generate store traffic). It also speaks to why no one took it over as a going concern and no one is interested in taking on the seemingly open market with zero competition. Groceries is also an extremely price sensitive segment, meaning if you tried to say squeeze and extra 2% out of the customers they are as likely to avoid you completely as you are the generate revenue. Remember how people talk about the Doanld St store as being "too expensive" and "for emergencies only"?

[OTA in Winnipeg]

Originally Posted by robertocarlos

I shopped at the Bay grocery store. It was busy enough to turn a profit.

It was stupidly expensive but always busy.

[esquire]

If the margins on a grocery store are only 1.5 per cent then why does anyone voluntarily operate a grocery store anywhere in Canada?

[Andy6]

Originally Posted by esquire

If the margins on a grocery store are only 1.5 per cent then why does anyone voluntarily operate a grocery store anywhere in Canada?

It's a guaranteed revenue stream, more or less (grocery stores would be a good thing to own right about now) I would also think that the margin figure is for grocery items - stores would also have other revenue streams (non-food items they sell, renting space to pharmacists, etc.). That said, it's an incredibly competitive industry and margins are definitely cut to the bone.

[Andy6]

Originally Posted by CoryB

That's just it though, taking the "$10 million in sales" reported but unsourced in this thread and the Industry Canada pre-tax industry profit margin of 1.5% means that revenue is $150,000 pre-tax for the whole year. That is significantly worse than if you tied on that same investment in GICs for 12 months and had zero risk. As I covered in my previous post Hudson Bay is likely below average on the profit margin as it lacks both the volume in and supply chain in the grocery space, even at its peak. This basically confirms the groceries in the Bay basement were effective a loss leader (ie something there to only generate store traffic). It also speaks to why no one took it over as a going concern and no one is interested in taking on the seemingly open market with zero competition. Groceries is also an extremely price sensitive segment, meaning if you tried to say squeeze and extra 2% out of the customers they are as likely to avoid you completely as you are the generate revenue. Remember how people talk about the Doanld St store as being "too expensive" and "for emergencies only"?

Plus downtown you're having to make up for much higher losses from theft than usual. If you look at what we have in downtown Toronto (where there weren't many grocery stores until recently, but are now) it's quite different: downtown dwellers are a captive, carless market, usually younger people with lots of money and not price-sensitive, and (I imagine) a rate of theft that isn't wildly out of line with what you'd find at a suburban location.

[horrorbro123]

Well it’s Confirmed Oomomo is Opening Second Location In Winnipeg Taking Over Former Home Outfitters aka Hudson Bay Home Next To Canadian Tire In St James Street Will Open In December Just In Time For Christmas