North West invests $150M
More food storage, 125 permanent jobs, new services expected
Stewart Burnett
Northern News Services
Monday, March 9, 2015
NUNAVUT
Over the next three years, the North West Company will invest $150 million in its stores in the North, following up on a directive made last June to re-invest in the region.
Edward Kennedy, president of North West Company, said a $150 million investment in stores across the North will create 125 new permanent jobs. He envisions a Tim Hortons in every store one day. - photo courtesy of North West Company |
Two years from now, the company is expected to be well underway with a major investment in Iqaluit.
"We thought it was important people understood the magnitude of how much we're investing in Northern Canada," said Edward Kennedy, president of North West.
He said the $150 million represents about 80 per cent of the company's investments for the next three years.
The company also plans to upgrade the facilities at its stores by replacing refrigeration and lighting with more energy-efficient solutions and new warehousing to allow more storage over the winter and less reliance on air freight.
Shoppers of establishments including Northern stores and NorthMarts will see expanded fresh and prepared food departments, more children's and outdoor living selection and a range of new financial and health services.
New multi-purpose rooms linked by online video will help train staff and allow customers to interact with specialists including financial advisers, optometrists and audiologists.
"It's an area of the store where services can be provided on a consultation basis with privacy, and they serve not just customers but also our staff," he said. "In some ways, our imagination is our only constraint on how far we can go on this idea but we do believe strongly that a lot of the growth in Northern retailing will be in services."
Having some of these services entirely on site would not be sustainable, so the multi-purpose rooms will afford customers opportunities they wouldn't be able to get otherwise. Kennedy called it new ground.
Expanded health and financial services will include more in-store pharmacies, optometry centres and an increased selection of over-the-counter medication, which Kennedy said is an under-served area in the North.
"Part of the investment we're making in our stores is to change the space allocation," said Kennedy.
Some stores will get physically bigger but others will just be upgraded with energy-efficient refrigeration and re-arranged to better reflect modern retail trends.
Two categories that have not performed well in the North are consumer electronics and fashion apparel.
"We have to shift with the customers' changing expectations," said Kennedy. "We're changing the way we allocate space."
North West will not completely abandon those categories but it will focus more heavily on in-demand products and services, such as everyday items, food and outdoor living, which includes hunting and fishing.
Kennedy said Walmart and Amazon have taken much of the "dry groceries" market using reduced freight costs.
"That makes it difficult for Northern retailers to compete because we can't just take that cost and make it go away but these larger retailers seem to be able to average it out somehow," he said. "We recognize there are certain areas we don't have strength and other areas we have a lot of strength."
Kennedy has a relationship with Tim Hortons and has a vision of having a Tims in every store, either selling only coffee or coffee with food.
He also wants to have more seating areas in his stores.
"We think our stores can be a bigger and more important community meeting place if we provide more seating," he said.
There's also an idea to carve out convenience store sections that could operate for extended hours.
"The goal here is to stay relevant for our customers, so they see us as a strong, dependable everyday needs provider," said Kennedy.
"Although people would always like to have everything possible sold locally, I think our customers recognize we have a responsibility as a business to sell things people actually want to buy. If we're healthy doing it that way, then everybody wins – the store's healthy financially and we're not trying to carry products that the customer has a very lukewarm interest in buying from us."
The investment will create approximately 125 new permanent jobs in addition to construction employment.
North West is the largest private employer of Inuit and First Nations in Canada's North, and Kennedy said hiring locally whenever possible is important to the company.
"We're serving communities where they know your name and you know their name," said Kennedy. "You want to reflect the community back to itself."
Prices are a constant topic in the North, and Kennedy said the investment will help control costs.
One of the biggest factors weighing on prices is energy, which is why North West will be seeking to upgrade its energy efficiency everywhere possible. Many remote stores in the North have energy prices more than 10 times as high compared to Winnipeg.
"That's a jobs killer, because some of the prepared food categories or ideas we have don't make the cut," said Kennedy. All North West refrigerators will be upgraded with LED lighting to save on costs. Increasing warehouse space will help cut down on air freight expenses.
"There are some stores that simply don't have enough holding capacity to bring in a full year's supply on sea lift or winter road," said Kennedy.
This year, North West is making significant store investments in Pond Inlet, Clyde River, Hall Beach, Arviat and Baker Lake, as well as investing in a C-Store in Rankin Inlet and expanding health services in Fort Simpson.
