Don’t discount retail discounters

Price slashing. Mark downs. Lower prices. Discounted goods.

The word discount conjures up a variety of value for many consumers.

Discount is a deduction from the usual cost of something.

The irony of that rationale is by who’s standard is the cost of something?

Taking the frills out of grocery

I’m fascinated by the adoption of discount grocery.

Two of the largest grocery empires in Canada, Loblaw and Sobeys, each carry discount brands in addition to their flagship stores.

Loblaw’s No Frills was born from a converted Loblaw outlet slated for closure in 1978, according to their Wikipedia page.

Less choice in products combined with the knock off “No Name” in house branding of products, the No Frills brand now has over 200 locations across Canada.

Likewise, Sobey’s launched their discount counterpart called FreshCo in 2010.

They have been steadily converting Safeways into FreshCo’s all summer in Saskatoon including Confederation Mall, Market Mall and 33rd Street West.

Originally using the slogan, “Fresher. Cheaper” the company now claims to be “lowering food prices.”

They have a little way to catch up to No Frills with a little under a hundred stores and presumably less of the grocery market share.

Regardless, discount grocery shopping is here to stay. But why?

The Dollarama effect

Well to be fair, discount isn’t new.

Discount retailers have been around since the old nickel and dime stores, which led to larger discount stores like Woolworth’s Woolco.

A Lebanese immigrant named Salim Rassy started his first variety store in Montreal in 1910.

That store has been handed down through four generations and is known today as the yellow/green beacon of savings: Dollarama.

The first Dollarama opened in 1992 and eventually all the family’s dollar stores were converted to the brand.

The stores originally offered all items at $1. And the people came. In droves.

And although the concept has changed slightly, with price offerings on some products up to $4 their popularity continues to soar.

Still headquartered out of Montreal, approximately 80 per cent of the brand was sold in 2004 to a private equity fund out of the U.S.

The company reportedly earned $2.9 billion in 2016. They employed 20,000 people for that same time period and had approximately 1,095 locations.

With every Saskatoon neighbourhood housing a new or improved Dollarama I’d say that number has likely grown.

Bargain hunter

I was in Dollarama just yesterday and proudly declared my discount finds to my husband when I got home.

There is a rush at finding something at a reduced cost that serves the purpose.

I must assume therefore consumers of all income levels are no longer too proud to shop discount.

We all want to feel like we’ve obtained the best value we can for our hard-earned cash.

Some of our favourite retailers have been drilling it into our heads for years:

“Expect more. Pay less.” – Target

“Never pay full price for fabulous,” – Marshalls

And who can forget the behemoth that likely killed Mom and Pop shops:

“Save money. Live better.” – Walmart

I would love to hear about your favourite discount retailer… or the ones you simply can’t bear to visit!

Posted by Kelly Macsymic

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