In a story/discussion back in October 2008, RetailWire looked at Canadian Tire's plans to test food sales at two stores in Ottawa. In a poll on the site, respondents were asked, "How difficult is it for a retailer not in the food business to succeed at selling groceries?" Three out of four respondents said it was very or somewhat difficult for a merchant new to the business to succeed.
It appears as though Canadian Tire is beating the RetailWire poll's odds as the chain has expanded food sales to nine "Smart" format stores and reports consumers up north have no problem buying food from the same place they buy home improvement products and tires.
Mike Arnett, president of Canadian Tire Retail, told the Financial Post that the chain has seen a difference between what people say in market research and how they behave in stores.
"Typically people will say, 'No, I don't think that's a very good idea', " he said. "When they see it, it's different."
"Food, interestingly enough, is the most-shopped category in the store in the stores that have food," Mr. Arnett told the Financial Post, "because everybody needs food; not everybody needs plumbing on a given trip."
The major advantage to adding food to the mix is it creates more frequent shopping trips to Canadian Tire's stores and they often buy general merchandise items, as well.
While the test has been a success, with Smart stores achieving significant sales increases, Canadian Tire has not decided whether to roll out food to its 479 stores.
Discussion Questions: What challenges will Canadian Tire face if it significantly ramps up its food operations to offer groceries in all its 479 stores? What will it need to do if it wants to become a grocery powerhouse in Canada?