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Don’t discount retail discounters

Price slashing. Markdowns. Lower prices. Discounted goods. The word “discount” conjures up a vari...

Price slashing. Markdowns. Lower prices. Discounted goods.

The word “discount” conjures up a variety of different types of value for many consumers. Discount is a deduction from the usual cost of something.

The irony of that rationale is by whose standard is the cost of something determined?

Discount grocers

I’m fascinated by the adoption of discount grocery.

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

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

A format featuring less choice in products, combined with the knockoff “No Name” in-house branding of products, has led the No Frills brand to over 200 locations across Canada.

Likewise, Sobeys launched its discount stores, called FreshCo, in 2010. The company has been steadily converting Safeways into FreshCos 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.”

It has a little way to go 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 store in Montreal in 1910. That store has been handed down through four generations, the business has grown and become known today as the yellow/green beacon of savings: Dollarama.

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

The Dollarama 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 in 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. It 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!

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