Winnipeg Retail

[Simplicity]

Originally Posted by esquire

I wonder if it will end up housing a company that might not have otherwise bothered coming to Winnipeg? I can see someone like Nordstrom Rack or Simons not wanting to bother with the expense of a new building when they are moving into a bigger, wealthier markets... but with a nice new building just sitting there, perhaps the balance tips in favour of coming here.

There's no question that real estate is a large expense associated with retail, but it's not enough to tip the balance where profitability and market suitability are concerned. I think why these stores have so far avoided the Winnipeg marketplace has more to do with our buying habits and demographics than the risk associated with getting the real estate ready for game day.

But who knows, maybe I'm completely off-base. It would just be very surprising to see a company like Nordstrom who avoided Canada even in our flushest economic times decide that a busted oil bubble, increasing personal debt, and declining real estate values was a good time to make that market entree...

[Simplicity]

Fantastic stuff from CoryB in that last post.

Not that I'm the arbiter of what's good around here, but that was a solid breakdown of the numerous retail entities that could even be considered a fit.

[esquire]

Originally Posted by Simplicity

There's no question that real estate is a large expense associated with retail, but it's not enough to tip the balance where profitability and market suitability are concerned. I think why these stores have so far avoided the Winnipeg marketplace has more to do with our buying habits and demographics than the risk associated with getting the real estate ready for game day.

But who knows, maybe I'm completely off-base. It would just be very surprising to see a company like Nordstrom who avoided Canada even in our flushest economic times decide that a busted oil bubble, increasing personal debt, and declining real estate values was a good time to make that market entree...

Fair points all. I'm just envisioning a scenario where a so-so market that might not have been appealing 3 years ago when there weren't really many desirable locations might suddenly become a bit more interested if they can get a good lease deal. Just spitballing here, but a reasonable lease can help to offset sales that are marginally lower, but of course that assumes that the fundamentals are at least reasonably in check.

But as you pointed out, the timing isn't necessarily great. It suddenly feels like 1989 all over again so far as the local retail market is concerned.

[Riverman]

Originally Posted by CoryB

The issues with Sears are pretty well documented. Lots of store closing in the US and selling off prime locations and owned properties, included KP, in Canada.

I know as do we all. I was making an observation of one store during the busy shopping season. I implied nothing else.

[esquire]

Originally Posted by Riverman

I know as do we all. I was making an observation of one store during the busy shopping season. I implied nothing else.

I kind of like Sears. Now that The Bay is basically becoming a de facto men's and women's fashions/housewares store, Sears feels like the last true department store left. But for whatever reason it has fallen badly out of style. I wonder if they can pull out of their nosedive?

[Riverman]

Originally Posted by esquire

I kind of like Sears.

Me too, a lot.

[CoryB]

Originally Posted by esquire

Fair points all. I'm just envisioning a scenario where a so-so market that might not have been appealing 3 years ago when there weren't really many desirable locations might suddenly become a bit more interested if they can get a good lease deal. Just spitballing here, but a reasonable lease can help to offset sales that are marginally lower, but of course that assumes that the fundamentals are at least reasonably in check.

Shindico will definitely be highly motivated to land someone for the Polo Park site.

Winnipeg is on the target list to eventually get the following stores: Bass Pro Shop, Whole Foods, Simons, Nordstroms (like a Nordstroms Rack), 5th Ave (likely Off 5th or the current HBC Outlet) and in theory a HR2 (Holt Renfrew's discount chain) although that is likely the last to come due to their history here.

Of those, I do not know a lot about Bass Pro Shop's current expansion plans. The rest of that list is carefully managing their rollouts with very limited store openings. It would definitely be surprising to see any of those suddenly change their own course to grab a significant number of Target leases.

[esquire]

^ Knowing this city and the fact that even Safeway is seen by many as an extravagant place to shop, I cannot see Whole Foods doing well here. This is no criticism of the city either... I've been to Whole Foods several times in the US, and the place seems preposterous. It's like the Lululemon of the food world... for people who pay $120 for what basically amounts to a pair of leggings, there is Whole Foods where they can also pay $14 for a couple of pork chops or $8 for a bottle of juice. Winnipeggers have more common sense than that!

I can see one or two of the Rack/Off 5th/HR2 coming here in lieu of a top-line version of those retailers. Bass Pro Shops seems inevitable. Simons seems likely too, but probably not until they spread out to the biggest cities first.

[Simplicity]

Originally Posted by CoryB

Shindico will definitely be highly motivated to land someone for the Polo Park site.

Winnipeg is on the target list to eventually get the following stores: Bass Pro Shop, Whole Foods, Simons, Nordstroms (like a Nordstroms Rack), 5th Ave (likely Off 5th or the current HBC Outlet) and in theory a HR2 (Holt Renfrew's discount chain) although that is likely the last to come due to their history here.

Of those, I do not know a lot about Bass Pro Shop's current expansion plans. The rest of that list is carefully managing their rollouts with very limited store openings. It would definitely be surprising to see any of those suddenly change their own course to grab a significant number of Target leases.

You had mentioned the Bass Pro Shops before as a potential Polo Park site. The only thing I see as an issue there is the same one that faces any of the hardware stores. Generally, Bass Pro Shops sell Nitro Boats and various other rec vehicles. Unless they're bringing a pared back version, they're going to need a parking lot to store that stock...

[CoryB]

^^ Thanks Simplicity. I am obviously not familiar enough with the layout of Bass Pro Shops. That said the volume of boat sales compared to the typical movement of goods through a lumber yard could make the Polo Park site slightly more workable. It seems we have the demographics to support that type of retailer and limited competition. They also have stores in other Canadian cities and don't routinely get mentioned as a troubled retailer. Basically all the indicators for a store that would be interested in the Winnipeg market.

Whole Foods on the other side, I agree the fit doesn't seem there. It has been a while since I saw the expansion plans for Canada but the store count was too high to be completely ignoring Manitoba. I wonder if they had any discussions about the taking over the court-ordered divestment of stores in the Sobey's and Safeway merger.

[esquire]

Originally Posted by CoryB

Whole Foods on the other side, I agree the fit doesn't seem there. It has been a while since I saw the expansion plans for Canada but the store count was too high to be completely ignoring Manitoba. I wonder if they had any discussions about the taking over the court-ordered divestment of stores in the Sobey's and Safeway merger.

Winnipeg is a pretty socioeconomically mixed city... even in an area with posh, million dollar plus homes, you're never more than an easy bike ride away from Manitoba Housing complexes. I get the impression that to make a Whole Foods work, you need to put it into an area dominated by high-income earners. I'm not sure where you could really find space like that in Winnipeg... maybe along Kenaston, or hey, come to think of it, the old Target space at Grant Park (but Co-op is already there). But even then it would seem unlikely.

Just look at the list... all their locations in Canada are in fairly upscale areas. http://www.wholefoodsmarket.com/stores/list/canada

[Simplicity]

Originally Posted by CoryB

^^ Thanks Simplicity. I am obviously not familiar enough with the layout of Bass Pro Shops. That said the volume of boat sales compared to the typical movement of goods through a lumber yard could make the Polo Park site slightly more workable. It seems we have the demographics to support that type of retailer and limited competition. They also have stores in other Canadian cities and don't routinely get mentioned as a troubled retailer. Basically all the indicators for a store that would be interested in the Winnipeg market.

Whole Foods on the other side, I agree the fit doesn't seem there. It has been a while since I saw the expansion plans for Canada but the store count was too high to be completely ignoring Manitoba. I wonder if they had any discussions about the taking over the court-ordered divestment of stores in the Sobey's and Safeway merger.

I agree with all the Whole Foods sentiment. I think Vita Health has the model down pat. Small stores all over the city that cater to a certain contingent of the population that is interested in that stuff. Esquire really makes the point. Safeway was almost considered too upmarket for Winnipeg. People say they'll shop at Whole Foods, but when it really comes down to it, I think they know our market well. And I think that's largely the reason we're not getting one.

I saw somebody mention taking over the Bay and putting a Whole Foods on the bottom floor and I could only laugh.

[Riverman]

Originally Posted by esquire

I cannot see Whole Foods doing well here.

Haha, that made me think of this.

https://medium.com/culture-club/amer...e-d778c31aa9be

[esquire]

Originally Posted by Riverman

Haha, that made me think of this.

https://medium.com/culture-club/amer...e-d778c31aa9be

See, there you go. Not enough shitheads to support it

But seriously, a couple of visits were enough for me. The experience is generally pleasant but the cost is ridiculous... you could eat out for what Whole Foods charges for basics.

[CoryB]

Originally Posted by Simplicity

I saw somebody mention taking over the Bay and putting a Whole Foods on the bottom floor and I could only laugh.

I think the best fit for the Bay basement might be the year-round downtown Farmer's Market discussion that rolls around every summer. The issue here is some deep thinking needs to go into why the year-round farmers market concept at the Forks Market became what it is today before we head down that road again.

[vjose32]

I still think Menards would be better than Lowes, perhaps they can get their hands on Rona.

I see Brandon is in a bit of trouble. Their mall lost Safeway and is now loosing Target. It's going to be an anchor-less mall soon!

[esquire]

Originally Posted by vjose32

I see Brandon is in a bit of trouble. Their mall lost Safeway and is now loosing Target. It's going to be an anchor-less mall soon!

What a quick turn of events... just two years ago Brandon was in a retail building frenzy with the mall and the North Hill Shindico big box mall being packed. Now the mall will probably go through a tough few years with both anchors suddenly disappearing.

[horrorbro123]

Originally Posted by esquire

What a quick turn of events... just two years ago Brandon was in a retail building frenzy with the mall and the North Hill Shindico big box mall being packed. Now the mall will probably go through a tough few years with both anchors suddenly disappearing.

Yeah Maybe Will Bring Bed Bath & Beyond In Brandon Will Replace Target In Shoppers Mall I Think

[CoryB]

Originally Posted by vjose32

I still think Menards would be better than Lowes, perhaps they can get their hands on Rona.

Rona runs significant supply chain operations in Quebec. When Lowe's made their take over offer the provincial government stepped in to block it. That Rona also runs TruServ Canada further complicates any possible takeover.

In terms of Menards, with no existing Canadian operations the barrier for entry are higher for them than Lowe's who has Canadian but not Manitoban operations.

[CoryB]

This CBC article talks a little about which company could fill the space left by Target. It specifically suggests Wal-Mart and Loblaws (Superstore) are thought to be especially interested as it would limit potential for a new competitor to enter the market.

In terms of Winnipeg, only Southdale would seem to have a strong Wal-Mart potential. The other three locations are too close to existing stores even if they were bringing something like the Neighborhood concept to Canada. Polo Park is a possibility but would need to replace the Empress store and there is likely little advantage to the move.

Loblaws though struck me as definitely being an interesting opportunity. For most people Loblaws in Winnipeg is Superstore. A few more will think of it as Extra Foods and perhaps even the No Frills we will soon see here. Their recently acquired Shoppers brand is also likely not a player in these leases. What is potentially interesting though is the smaller brands they have to play with, specifically T&T and the currently mothballed Nutshell concept. T&T is an Asian grocery store similar to Lucky's which was announced as a tenant for Polo North (where Marshalls is located). Nutshell is basically Loblaws take on a Whole Foods style of store that they were preparing to pilot however they cancelled those plans before the first store opened.

If Loblaws used multiple banners they definitely could be a player. For example Extra Foods or No Frills in Southdale, T&T at Polo Park and perhaps Nutshell at Kildonan Place. Grant Park of course gets the short end there again but it is unlikely that there will be a 100% fit regardless of who takes over the leases.