'Staying true to our customers': Giant Tiger still a ferocious retail force at age 60
By: David Sali, OBJ
Published: May 11, 2021 4:22pm EDT
It might not be the youngest cat in the retail jungle, but Ottawa’s iconic discount department store chain still has plenty of roar as it enters its seventh decade in business.
Sixty years ago this month – on May 3, 1961 – a former travelling salesman named Gordon Reid opened the first Giant Tiger store on George Street in the ByWard Market.
The location remains in operation to this day, fitting for a company that’s never forgotten where it came from even as it has grown into a nationwide force with 259 stores, more than 10,000 employees and $2 billion in annual sales.
“It’s really a testament to staying true to our customers and staying connected with the communities in which we serve those customers,” Paul Wood, a longtime company executive who was promoted to president and CEO last fall, said recently when asked to explain how the chain has managed to keep thriving in an increasingly competitive retail landscape.
“Longevity comes from staying abreast of what the customer needs and providing them something in an environment they enjoy coming back to.”
Indeed, Giant Tiger’s bright yellow signage and familiar feline logo have become a ubiquitous feature of neighbourhoods across the country.
Catering to budget-minded customers, the chain has become famous for offering a wider selection of goods than dollar stores in smaller, more intimate layouts than the big-box chains.
“I think that they’re every bit as smart, sharp, sophisticated in their business strategy as Walmart,” said Ian Lee, an associate professor at Carleton University’s Sprott School of Business who often cites the Ottawa-based chain to his students as an example of how to run a successful discount retail operation.
“Giant Tiger has never lost sight of their core market. I think that they have really been very astute in pursuing and executing on their business strategy.”
Other industry watchers agree, noting the company sits in a sweet spot between competitors.
“They have an interesting price point that is above Dollarama but below Walmart,” retail analyst Bruce Winder said.
The retailer has also managed to outlast many other Canadian discounters that have come and gone, such as Bargain Harold’s and BiWay.
“There used to be a few chains that offered that mid-discount price point, call it $10 and up, and Giant Tiger seems to have a monopoly in that area now,” Winder said.
One of the store’s appeals is its product mix – an assortment of groceries, housewares, apparel, beauty, outdoor gear and kids’ toys and games.
“It’s like a mini value department store,” said Lisa Hutcheson, managing partner at Toronto-based consulting firm J.C. Williams Group. “You can sort of get anything there.”
A big part of the reason for the retailer’s longevity, Lee explained, is its strategy of putting stores in small towns, main streets and suburban communities that aren’t well-served by other chains.
“Giant Tiger has been brilliant at going into markets where there’s not a lot of competition because the competition has ignored certain regional markets,” he said. “In neighbourhoods where there are a lot more modest incomes, there are opportunities there. I give them full credit for what they’re doing.”
Targeting those locations plays into the corporate brand, added Hutcheson.
“They’ve always been about community, about family and about saving Canadians money, and I don’t think they’ve ever really deviated from that,” she said.
The retailer has continued to expand during the pandemic, opening its first stores in Chicoutimi, Sault Ste. Marie and Thunder Bay last summer while adding a second location in North Bay.
Another batch of openings is slated for the next few months as Giant Tiger continues to move closer to its goal of operating stores from coast to coast.
“We’ve still got some good opportunities to continue to grow, but growing at a measured, selective pace where it makes sense for us and where we believe we can have success,” Wood said, noting the chain still does not have a footprint in British Columbia or Newfoundland and Labrador.
While historically the retailer has been a staple of Canada’s small-town retail strips, the veteran executive said that’s changing.
“In more recent years, we’ve continued to expand into some pretty typical markets,” Wood said. “We’re in the same shopping node as our key competitors. Walmart is within five kilometres of our stores in 90 per cent of our markets.”
As Giant Tiger grows, the new stores will be based on value and opportunity, which could include urban centres, he said.
“We haven’t put a presence yet in downtown Toronto, but we’re in Mississauga, we’re in Brampton, we’re in Etobicoke, we're in Scarborough,” he said. “It’s about finding the right space at the right price where we can access a good number of shoppers, and convenience is part of that.”
Out of the company's 259 stores, about 100 are corporate owned – a number the retailer hopes to whittle down.
“Ultimately, we'd like to have our stores locally owned and operated by a franchise owner,” Wood said. “But because of the natural churn of opening new stores and people retiring and selling stores back, we have an inventory of corporate stores that we’re in the process of building out to be franchised.”
Meanwhile, Giant Tiger recently reconfigured its supply chain and e-commerce network. In 2018, the retailer opened a new 56,000-square-metre distribution centre in Johnstown, just east of Brockville on the St. Lawrence River.
The company has focused on bolstering its online presence since the beginning of the COVID-19 crisis, Wood said.
“The pandemic has really accelerated that pace of change, and we also had to accelerate the road map we were following with respect to our development of e-commerce,” he explained. “We still have a ways to go there.”
Giant Tiger’s line of groceries and other essentials has allowed its brick-and-mortar stores to remain open during the pandemic. But with other items such as clothing off-limits in many jurisdictions, it’s sparked frustration among some customers, Wood conceded.
“That certainly creates a new challenge for our store owners and managers to deal with,” he said. “But the team has been very resilient.”
That could also describe the chain itself. Despite disruptive forces such as e-commerce and the rise of big-box stores, Giant Tiger has remained a nimble cat that’s navigated its way around every obstacle over the past six decades.
“The retail landscape in Canada right now is really competitive, with a bunch of very strong players,” Wood said. “We’re thankful to still have our niche and to be still growing and thriving as a business in that environment.
“Giant Tiger has really weathered, adapted and changed, and that's I believe by sticking true to our values, true to our customers.”
– With additional reporting from the Canadian Press
https://www.obj.ca/article/local/retail/...iger-still-ferocious-retail-force-age-60
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