Why discount grocers are everywhere
No Frills recently hit 300 locations nationwide, and there are dozens more on the way.
Good afternoon everyone.
These days, it’s impossible to escape the distinct yellow branding of Canada’s largest discount grocery chain: Loblaw-owned No Frills recently hit 300 locations nationwide, and according to the company’s recent outlook there are dozens more on the way.
I had a lot of big, complicated feelings about this so I spoke to Ben Ryder Howe, who penned an incredible article for the New York Times last year about how Costco, the world’s largest discount retailer, has changed the shopping experience. He said this reminds him of when major pharmacy chains started expanding in New York City in the early 2000s, wiping out a large number of local delis and convenience stores: “I think my personal view is that it's really destructive [to the community].”
Unlike Costco, Loblaw has designed the format of its No Frills stores to get customers in and out as quickly as possible. It’s not meant to be an enjoyable experience. The company’s new ultra-discount concept, No Name, aims to strip away even more frills.
There’s no sense in resisting the shift or blaming large grocers, Bruce Winder, a retail analyst, tells me, because businesses match the market: Thirty years ago, when there was a larger share of people living in the middle class, we had nicer grocery stores. He says social media plays a role. It’s created a “tremendous” strain on young people who are perpetually poor from trying to keep up with what they see online. “They’ve lost the simple things in life and spend a lot of money trying to live like a Kardashian.”
Shoppers are torn between two sides: they want to buy high-end groceries, but can’t really afford to do it. So when executives at Loblaw consider whether a community is better served by a Loblaw or a No Frills, the answer is increasingly… no frills it is.
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