Nordstrom exiting Canada

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Nordstrom exiting Canada

Post by Groceteria »

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Re: Nordstrom exiting Canada

Post by storewanderer »

This is a strange move in my opinion, but things have clearly gone off track at Nordstrom at large.

It is starting to feel like US retailers are not quite making it in Canada.

Bed Bath and Beyond- exiting Canada entirely now
Target - what a fiasco, all Target's fault too, that didn't have to go how it did
now Nordstrom

And this doesn't count some of these other chains where the Canada operation got split away from the US operation like Lowe's, Toys R Us, or Staples (all still open in Canada I think).
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Re: Nordstrom exiting Canada

Post by retailfanmitchell019 »

storewanderer wrote: March 2nd, 2023, 6:33 pm And this doesn't count some of these other chains where the Canada operation got split away from the US operation like Lowe's, Toys R Us, or Staples (all still open in Canada I think).
And Safeway Canada (which I'm sure was sold make the Albertsons merger happen).
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Re: Nordstrom exiting Canada

Post by ClownLoach »

storewanderer wrote: March 2nd, 2023, 6:33 pm This is a strange move in my opinion, but things have clearly gone off track at Nordstrom at large.

It is starting to feel like US retailers are not quite making it in Canada.

Bed Bath and Beyond- exiting Canada entirely now
Target - what a fiasco, all Target's fault too, that didn't have to go how it did
now Nordstrom

And this doesn't count some of these other chains where the Canada operation got split away from the US operation like Lowe's, Toys R Us, or Staples (all still open in Canada I think).
Walmart is very successful in Canada and still building supercenters. They have a very expensive project going for a new full supercenter opening in Montréal this year. Their stores have a lot of traffic and they are the strongest competitor to Loblaw in foods.

Lowe's did sell off their Canadian division late last year. This division grew from acquisition of Rona then trying to rebrand it as Lowe's. Rona had a wide range of stores with sizes ranging from small neighborhood locations to megastores resembling an Ikea. Very little consistency and now they will go back to the Rona name.

I don't trust anything BB&B is doing, they've closed obviously "good" locations. Their Canada managers are posting letters to the CEO claiming that they are profitable and should have been kept open. It's likely that they have been closing stores simply based on the return they can get from liquidators. The stores with the most inventory suddenly become worth more dead than alive. Supposedly Harmon was still profitable but also liquidated. Sad situation there.

Home Depot also does very well in Canada. TJX has different names (TK Maxx and Winners) that lead the off price business in Canada. And Michaels has over a hundred stores, expanding into Quebec successfully about a decade ago, they probably do better in Canada than the US (no competition).

And Costco is also very successful, still adding both regular and business centers. Seems like the business center model is very successful there.

In my visits to Canada I see an abundance of mall fashion stores still with little visible decline like we see in the US. Obviously climate makes a big difference, and Canadian homes are smaller but their weather forces ownership of more types of clothing. Practicality is much more of a factor in Canada than the US. American brands are definitely met with a skeptical eye because there are many Canadian brands competing.
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Re: Nordstrom exiting Canada

Post by buckguy »

Nordstrom's main competitor in Canda would be Holt Renfrew (owned by Weston, the parent of Loblaw), which has closed multiple stores in the few years and went in/out of the off-price business. Makes me wonder if their sector is part of the problem for them in Canada. Saks opened 2 stores in Toronto but hasn't grown from there.
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Re: Nordstrom exiting Canada

Post by retailfanmitchell019 »

ClownLoach wrote: March 3rd, 2023, 9:19 am Walmart is very successful in Canada and still building supercenters. They have a very expensive project going for a new full supercenter opening in Montréal this year. Their stores have a lot of traffic and they are the strongest competitor to Loblaw in foods.
And Costco is also very successful, still adding both regular and business centers. Seems like the business center model is very successful there.
Walmart is only #5 in grocery market share in Canada. Not as strong as one would think. They have lower grocery share than Costco.
Walmart doesn't do as well up there as in the US due to unions being stronger, and I don't think Walmart's "middle America" attitude helps them.
https://www.thepacker.com/news/retail/f ... cery-sales
I can imagine most of Walmart's business there is non-food.
ClownLoach, how do the other traditional chains (IGA and Metro) do in Quebec?
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Re: Nordstrom exiting Canada

Post by storewanderer »

retailfanmitchell019 wrote: March 3rd, 2023, 10:44 am
ClownLoach wrote: March 3rd, 2023, 9:19 am Walmart is very successful in Canada and still building supercenters. They have a very expensive project going for a new full supercenter opening in Montréal this year. Their stores have a lot of traffic and they are the strongest competitor to Loblaw in foods.
And Costco is also very successful, still adding both regular and business centers. Seems like the business center model is very successful there.
Walmart is only #5 in grocery market share in Canada. Not as strong as one would think. They have lower grocery share than Costco.
Walmart doesn't do as well up there as in the US due to unions being stronger, and I don't think Walmart's "middle America" attitude helps them.
https://www.thepacker.com/news/retail/f ... cery-sales
I can imagine most of Walmart's business there is non-food.
ClownLoach, how do the other traditional chains (IGA and Metro) do in Quebec?
Some context may help here.
Wal Mart Canada has about 400 stores (60 are Div 1 Stores) so for grocery let's say Wal Mart has 340 stores
Costco Canada has about 100 stores
Sobeys has 1,500 stores (all grocery?)
Loblaws has 2,400 stores (1,300 of those are Shoppers Drug Mart) so let's say Loblaws has 1,100 grocery stores

Costco is far and away the winner here.

We know Loblaw runs very high volume grocery stores. However I am giving them credit below for whatever share they get from grocery via Shoppers Drug Mart (those have a lot of groceries/perishables now- more than a Div1 Wal Mart has) in the totals below. I suspect if we knew what % market share came from Shoppers Drug Mart and removed that from below average per store then Wal Mart would be more productive on grocery than Loblaw on an average per store basis.

The other thing is I am including in the 1,100 store count of Loblaw those No Frills things- I am sure the average weekly volume on those is quite low and drags down the average.

So I do not agree with your assessment that Wal Mart is somehow struggling in Canada. The numbers do not play that out. Not performing to their potential? Likely. But what business is? There is always room to improve and grow.

What I take out of this is that:
Wal Mart is getting 8% market share out of 340 stores. 0.02353 share per store
Costco is getting 9% market share out of 100 stores. 0.09 share per store (nearly 4x Wal Mart)
Sobeys is getting 20% market share out of 1,500 stores. 0.013333 share per store
Loblaw is getting 28% market share out of 1,100 stores. 0.02545 share per store

The average grocery volume per store in the US for Wal Mart Supercenter is lower than a large high volume Kroger or HEB or Hy Vee also. I think these numbers play out about right. While Wal Mart Supercenters in California do radically more volume than a typical California grocery store, that is for California-specific reasons such as CA chains with whack pricing and CA chains with a high number of smaller stores.
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Re: Nordstrom exiting Canada

Post by ClownLoach »

retailfanmitchell019 wrote: March 3rd, 2023, 10:44 am
ClownLoach wrote: March 3rd, 2023, 9:19 am Walmart is very successful in Canada and still building supercenters. They have a very expensive project going for a new full supercenter opening in Montréal this year. Their stores have a lot of traffic and they are the strongest competitor to Loblaw in foods.
And Costco is also very successful, still adding both regular and business centers. Seems like the business center model is very successful there.
Walmart is only #5 in grocery market share in Canada. Not as strong as one would think. They have lower grocery share than Costco.
Walmart doesn't do as well up there as in the US due to unions being stronger, and I don't think Walmart's "middle America" attitude helps them.
https://www.thepacker.com/news/retail/f ... cery-sales
I can imagine most of Walmart's business there is non-food.
ClownLoach, how do the other traditional chains (IGA and Metro) do in Quebec?
I'm going to disagree based on my trips to Walmart stores in Ontario and Quebec. Most are smaller format, maybe 80,000 Sq ft. and are primarily groceries and drugs.

The majority of my experience is in Quebec, and no I don't speak French. Remember that much of Canadian housing is intentionally small - the less space you have the less you need to heat - so housewares, furniture, electronics etc. are in lesser demand. These stores are always very busy and the baskets going out are primarily food when I visit these stores in the urban areas. A really grungy little Walmart that looks like something you'd expect in Soviet Russia in Cote des Neiges is always slam packed elbow to elbow in a dilapidated, bizarre old mall that looks simply horrid. One of the most depressing places I've ever seen. The suburbs might sell more general merchandise, but still feel more like grocery is the key driver of foot traffic.

IGA is very mixed because of the independence of owners. I saw a few very busy stores, one near McGill downtown that felt similar to a urban Whole Foods. Others skew very much to their local clientele. I was very surprised when I visited an IGA in Montréal near Snowdon that was maybe 25,000 Sq ft but had a massive kosher section with separate meats, deli etc. and on site Rabbi. I didn't think this was quite as much of a Jewish neighborhood as others. Only went in a Metro once and it was disappointing, dirty and small. New large format Provigo (Loblaw nameplate) are beautiful stores I love to walk through but they don't feel like they are busy enough to justify their square footage, usually would see maybe four registers open out of 20+. Other Loblaw discount brands like Maxi & Cie were busier. Maxi is the No Frills type banner in Montréal. I am not sure if Super C (another price impact format) is Sobeys or Metro but it also has a decent following; their location across from Marche Atwater does very well as it fills in the basket for those buying fresh produce and meats across the street. Outside of bakery and core deli (meats/cheeses) the prepared meal concept is not a winning business in many of these stores. Provigo pushes them the most with some pizza counters and sandwich bars but I just don't see the traffic there despite the product looking really good.

My perception is that Walmart, IGA and Costco are the three busiest food chains. Loblaw varies from one format to another and Metro seemed to bring up the rear. Different feeling in Vancouver where the Real Canadian Superstore format was very busy; I haven't spent as much time there or in Ottawa.

The farmers markets such as Marche Atwater and Marche Jean-Talon are also exceptionally busy operations and they bring in shoppers from all over the island. Atwater reminds me of Pike Place if you removed all the crafts and souvenirs then replaced them with more meat, produce, dairy, boulangeries. Jean-Talon is just massive, several city blocks jam packed with produce stands. Merchandising of all these places is just breathtakingly beautiful, again think of the expensive showroom merchandising for tourists you see at Pike Place but then make the prices attainable for anyone. These public markets are another reason why things may not function as you would think, I'm sure if Jean-Talon was a self contained supermarket it would be one of the top ten grossing buildings worldwide.

Shoppers Drug Mart (Pharmaprix) is a very well run drugstore that has pricing as good as the core Loblaw stores. Do not underestimate the volume these little stores do or their impact on the marketplace. They are not much larger than an American drugstore like CVS or Walgreens but I wouldn't blink if you told me they did 10X the volume of either of those US chains, and I don't think they do more than 10% of their business in foods either. I would compare them to Thrifty, Savon or Longs when they existed as far as being a store where you could shop there vs a big box and get just as good of deals on your household goods. Today American drugstores have given up all hope to regain the share they've lost to Target and Walmart so they just price gouge and act as glorified 7-Elevens that sell drugs and HBA. I am sure on a sales per square foot metric Shoppers/Pharmaprix is more productive than Loblaw grocery stores.

Alcohol is in state run stores so not a factor in grocery shopping.

So a very different type of market to understand.
Last edited by ClownLoach on March 3rd, 2023, 3:05 pm, edited 3 times in total.
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Re: Nordstrom exiting Canada

Post by ClownLoach »

Getting back on topic, Canadian fashion is just not the same as American at all. Outside of Levi's I'm not sure of any major American fashion brand that is universally accepted. Flashy, blingy and trendy clothes tend to be light and cheaply made which doesn't fly in a place that is cold most of the year. Skimpy women's fashion which Nordstrom loves to sell doesn't work either. As I've mentioned before you must have a very deep wardrobe to be able to survive the winter. I can't name a real competitor to Nordstrom in Canada which is both why they probably thought it would be a good idea to enter - and why they didn't make it. Nobody can afford to wear $500 designer jeans and $1000 shoes when they must own at least 5X as many articles, including very expensive coats, boots, etc. just to survive the winter. When a major purchase is made it is expected to be built to last, like a Canada Goose jacket which easily exceeds $1K Canadian, so again they're not interested in a trendy design or color that will fall out of fashion next year. They appreciate good quality and timeless fashion/design that won't go out of style in a month. That just isn't Nordstrom in the USA, and I'm going to assume they didn't differentiate the Canadian stores except for more coats. Remember they only recently entered the NYC market too and by all reports haven't set the world on fire there either. They probably should be expanded more slowly.

I'm sure someone is going to call me out as that know nothing lifetime Californian and compare to their place in Boston or something, but Canada is just a whole different level of cold, snow and ice from what we are used to in the US, even colder areas.
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Re: Nordstrom exiting Canada

Post by Romr123 »

Also you need to remember that a high percentage of the Canadian customers (along with an even higher percentage of affluent Canadian customers) live within an hour/100 km of the US and are well-disposed to do "big" shopping in the States...this was part of the reason Target struggled; and I'd posit that the Nordstrom customer would just as soon shop cheaper in the US.

Rack stores are in Buffalo, Albany and Syracuse; Portland, ME,
Both Rack and full-line stores in Detroit and Minneapolis; and both Rack and full-line throughout Washington State (plus the heritage of being ground-zero).
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