Winnipeg Retail

[armorand93]

Originally Posted by esquire

^ I went to that Giant Tiger once last winter on my way home from work to pick up milk and it was nearly empty. I don't get GT's business model of setting up so many of its stores in the shadow of Walmart, which beats it in nearly every way possible. The only GTs I see doing quite well are the ones that are nowhere near Walmarts, i.e. inner city and small town locations.

Or in the case of Calgary's singular GT location - marketing it off to the poor.

[rrskylar]

Originally Posted by esquire

^ I went to that Giant Tiger once last winter on my way home from work to pick up milk and it was nearly empty. I don't get GT's business model of setting up so many of its stores in the shadow of Walmart, which beats it in nearly every way possible. The only GTs I see doing quite well are the ones that are nowhere near Walmarts, i.e. inner city and small town locations.

Giant Tiger’s prices aren’t great in their locations in older parts of the city. GT and any other Canadian grocery retailer would be smart to follow Aldi or Lidl’s model for small grocery stores which have exploded in the US with over 1600 stores there now.

[CoryB]

T&T is again looking to expand, and aggressively this time. They would want 40,000 sq ft (or more) for a location. The former Sobeys on Burrows and Keewatin seems like a potentially prime location. Wonder if this might finally be the time for them to come here.

Also not sure it was posted here, Red River Co-Op has a sign up saying they are opening a food store at the Outlet Collection (northwest of the light by the Dairy Queen.

[EndoftheBeginning]

Mountain Equipment Co-Op is selling to a private equity firm out of the US. They lost $11.5 million last year on sales of about $460 million. Indications are that about 17 of the 22 stores in Canada will remain open (no indication where Winnipeg stands yet). You won't likely get your $5 back, as per the CBC article:

News of its acquisition Monday prompted many members of the co-operative to wonder whether they would get their co-operative shares — about $5 — back.

During the transition from a co-operative to a private company, members would have to claim themselves as creditors to stake a claim on their $5 shares.

But Claus says its "highly unlikely" that members would get their share value back.

"Like in any business, if it's a co-operative or another, equity ranks at the bottom of the list," he said. "I'm sure there'll be some people that won't be happy they lost their $5, but I think the co-op's given them over the years a lot more value than $5."

[esquire]

^ No inside knowledge here, but I can't imagine that the future is bright for the downtown MEC location. It opened at kind of the tail end of the downtown retail era, when there was still a bit of a push going on to attract new retailers and resulted in Staples, A&B Sound, MEC, Hangers, etc. setting up shop. Downtown retail has only declined since then and now MEC is kind of a fish out of water, practically by itself as a non-dollar store retailer on Portage.

Even if MEC remains in business in Winnipeg, it would probably make more sense for them to move somewhere else, like Polo Park or Seasons.

[CoryB]

^^ If 17 of the 22 MEC stores are expected to remain open, without doing a deep analysis it feels like the current Winnipeg location is safe, for now. Some cities have multiple MEC locations and those are most likely the ones that will close. If you are niche retailer with a strong online presence and losing money on operations consolidating sales into fewer stores plus online is an easy play to try and continue as a going concern.

In terms of relocating the Winnipeg store, the Polo area definitely makes sense as there is lots of available units with low demand. That said, store relocations cost a fair bit of money and is unlikely something that is taken on while under creditor protection.

The Winnipeg location seemed to always do a reasonable job pulling in the office worker crowd. The challenge is with some big questions on if that will ever return to pre-pandemic levels of a captive audience is a huge unknown.

[drew]

MEC is still my go to outdoor place. In terms of downtown shopping - that is the only place on Portage Avenue I still go into physically to shop. I am sure I am not alone, it's generally pretty busy in there.

I do work downtown and live close by, so it's a more convenient place to go for me compared to most.

[esquire]

^ As a co-op, MEC always took a principled stand on being in urban locations with a focus on transit/AT accessibility with little if any parking. I doubt its new owners will be that idealistic... they're going to want parking. They'll pay lip service to the co-op ideals, but at the end of the day there will be a location with parking. I think that will end up doing in the Portage Avenue location. They'll unload the building (which they own IIRC), find a storefront in a shopping area where lease rates are probably better than they have been in a while, and that will be that.

[borkborkbork]

Originally Posted by esquire

^ As a co-op, MEC always took a principled stand on being in urban locations with a focus on transit/AT accessibility with little if any parking. I doubt its new owners will be that idealistic... they're going to want parking. They'll pay lip service to the co-op ideals, but at the end of the day there will be a location with parking. I think that will end up doing in the Portage Avenue location. They'll unload the building (which they own IIRC), find a storefront in a shopping area where lease rates are probably better than they have been in a while, and that will be that.

The Green Action Centre, which is in that building, must be getting nervous

[buzzg]

The "ideals" of MEC are what separates it from its competition and makes it customers so ultra-loyal. Lose that and you lose you obsessed customers, and fall in line with any other Atmosphere, Mountain Warehouse, etc. If the firm is smart they will know where there customer base is, if you stray from that brand loyalty – the customers will stray to the competition too. Right now, they are a go-to destination. Especially here. Also with lots of their products because they are high-performance, the in-store experience is much more important than buy a shirt from H&M.

[EndoftheBeginning]

They will be switching from a not-for-profit co-op model to a for profit private ownership model. There are bound to be large culture changes associated with a dramatic shift like that. Not sure how many of those devoted to MEC because of the co-op model would gladly change allegiance to a private corporation that is only in it to make money.

[buzzg]

I personally don't think the fact it's a co-op is what drives people to shop there, mostly. It's not like co-op gas where you get money back. They are a Canadian company that makes their own high quality products in an environmentally and ethically sustainable manner, and have unmatched customer service and employee knowledge. Go to a place like Atmosphere that sells the same crap as every other sporting good store in the world, I don't think the 16 year old working the till could even help you buy the right HydroFlask.

[EndoftheBeginning]

^ Those are good selling points for maintaining customer loyalty, true. Personally, I haven't shopped there in about twenty years. The stuff I did buy is mostly still functional, which is a testament to the quality at that time. Some comments on the CBC article were bemoaning a drop in the quality of the outdoor gear in past few years, but I don't know if that is really happening.

[cllew]

I might be wrong but I thought I saw a sign a few weeks ago on the back outside wall off of Donald saying they were doing parking vouchers for the Malbourgh multilevel lot off of of Smith.

[esquire]

Originally Posted by cllew

I might be wrong but I thought I saw a sign a few weeks ago on the back outside wall off of Donald saying they were doing parking vouchers for the Malbourgh multilevel lot off of of Smith.

Yeah, there is validated parking with purchase. But that's still nowhere near as convenient and appealing as free on-street parking by the front door. Especially a place like the Marlborough parkade which many, women in particular, can find intimidating.

[Glenn99]

Basically, Gordon Gecko(Wall Street) bought MEC. There will be changes.

[borkborkbork]

Originally Posted by Glenn99

Basically, Gordon Gecko(Wall Street) bought MEC. There will be changes.

the PE retail playbook:

- sell off all the assets
- slash employee benefits
- do a giant debt-funded expansion or digital transformation or something
- pay the PE firm a bunch of "management fees"
- end up in receivership

[BAKGUY]

Originally Posted by borkborkbork

the PE retail playbook:

- sell off all the assets
- slash employee benefits
- do a giant debt-funded expansion or digital transformation or something
- pay the PE firm a bunch of "management fees"
- end up in receivership

I can relate. This is what happened moer or less with Sears Canada. All yoo often, an American company divests its holdings and do all u mentioned

[OTA in Winnipeg]

Originally Posted by BAKGUY

I can relate. This is what happened moer or less with Sears Canada. All yoo often, an American company divests its holdings and do all u mentioned

Took the words right out of my mouth.

[CoryB]

To be fair, Sears Canada and Sears USA hadn't been profitable in about a decade. That an investment firm came in and was able to keep in working as a going concern for as long as they did was really amazing. I literally had Sears on death watch for almost five years and if you search the posts here you will see that.

Where Sears really missed their opportunity was when online shopping first started to emerge. People were cautious of putting credit cards online and companies hadn't figured out the distribution side. Sears had an extensive network of catalogue pickup locations including partners any many smaller communities and knew how to get packages large and small from a distribution point to these pickup locations. The locations also were able to take payment.

Had Sears done a pivot and leveraged this internal knowledge to basically handle payments and distribution for any online retailer on a fee for service basis they could have become a dominant retailer, likely similar to the Amazon position today. It is definitely one of the biggest missed opportunities.

--

In terms of MEC I am looking at it more as an outsider having never been a customer but been in their stores. It really seemed like they had started losing their way long before this take over. The product mix seemed very similar to other similar retailers. Also I cannot imagine that selling larger things like canoes works terrible well from their current location. Either way I do not think they will be relocating within the next two years. Heck I would say odds are much higher than completely exit physical retail in Winnipeg before they relocate especially if they own their building.