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Arctic Foods closing doors Owner says costs going up
and profit going down
Shawn Giilck
Northern News Services
Published Thursday, June 27, 2013
INUVIK
It's the end of an era with the pending closure of the Arctic Foods grocery store.
Arctic Foods owner Joe Lavoie says the closure of the store was inevitable due to economic and energy problems in town. - Shawn Giilck/NNSL photo
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Owner Joe Lavoie said June 20 he's sorry to be closing the store, but near-catastrophic losses made the decision inevitable.
He spoke to Inuvik Drum as a small number of shoppers browsed through the store, taking advantage of its 15 per cent off discounts.
"It's a number of factors, not just one," he said. "It's not strictly utilities. There was a significant change in sales when the oil industry left about two or three years ago. We gradually lost business to the point where the store just wasn't sustaining itself.
"The straw that broke the camel's back would have been the jump in utilities," he added. "The costs became unbearable. The hemorrhaging would have been too severe, and it would have impacted my other businesses. And I don't foresee a change."
The store has suffered from increased operating costs, staffing problems, and declining profit margins for about two years.
"Maybe there are things we could have done to change product selection. We've made our mistakes and errors. And personnel over the last few years had gotten worse. It's hard to operate effectively and efficiently when you don't have the right personnel. It's an epidemic, but you know, the buck stops with me.
"The salaries here aren't top-end salary. This is retail," Lavoie said. "I'm in the $15 to $20 range. People here aren't making $90,000 a year."
The store first opened in 2007, he said, after years of selling groceries outlet he also owns. He said it had an immediate impact on the local grocery business, forcing prices down as much as 25 per cent. Its main competitors over the years were NorthMart and Stanton's.
"There was a huge margin of profit then, just enormous," Lavoie said.
"We've sold groceries for a long time, maybe 15 years," he said. "We expanded up to this store, as it was just a better location.
"For the last year-and-a-half we've just been pounding our brain, trying to change things up," Lavoie said.
He looked at opening Sundays and extending hours, which can be a crucial factor in a grocery store, but some of the changes would have required "a significant cash injection."
The manager of the store, also left the business at around the same time to pursue his religious career.
"I'm really going to miss the grocery business, but I just don't have the energy and resources to continue on with the store like this," Lavoie said. "It just didn't seem like the sales were there to justify that.
"All of those factors lining up had us pondering it and looking at our options. It wasn't something I wanted to do, but I had started to seriously (dip) into my retirement fund and at some point you have to say stop."
The store employs approximately 11 people, he said, most of them full time.
Many have been offered positions with Lavoie's other companies, Home Hardware and Arctic Rim Sports. A few haven't been offered positions, because "their skills aren't transferable."
Lavoie said many residents will be "sad to see it go." A downtown grocery store is a luxury for any town, he agreed, particularly one where many residents don't have vehicles.
Many people don't shop as much at Stanton's, he said, because its Navy Road location is harder to get to than the downtown Arctic Foods.
"We have certain things here that no one else does, and I think people on the whole are sad to see it go," Lavoie said. "The community grows when businesses grow, so it's a bit of a sad day."
He said he's been approached by various people interested in keeping the store open in some similar format. Lavoie is going to evaluate those sales pitches. If nothing comes of them, he has some ideas in place to develop the space as a retail location of some sort.
"If nobody does do that, I have some designs to sell the equipment and putting some retail in."
The store will close by the end of the month, Lavoie said.
"Every day we stay open under this setup we're losing a lot of money."
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