Loblaw is launching a new ultra-discount grocery store under its No Name brand in Ontario. The first three stores will open in September in Windsor, St. Catharines, and Brockville. These stores are expected to offer even lower prices by reducing building and operation costs, as well as overall store complexity. No Name is already known for its simplified, bright-yellow packaging and marketing, and the new store will continue this trend. This move comes as discount grocery stores have been driving sales growth for major retailers in Canada as consumers seek deals to save on their grocery bills.
The No Name stores will have a less complicated operation with fewer products compared to traditional grocery stores. They will offer about 1,300 individual products compared to up to 7,000 at smaller No Frills locations. The stores will have shorter operating hours, limited marketing, no flyers, and a streamlined selection of frozen items, bakery items, produce, and pantry staples – without any refrigerated foods. The company is focused on simplicity and cost-cutting measures such as using reused fixtures to reduce costs. Prices at the new store are expected to be up to 20% cheaper than comparable products at nearby discount stores.
Loblaw’s CEO, Per Bank, came up with the idea for the No Name store concept based on a previous experiment with a similar concept in Europe. Although the earlier concept did not succeed, Bank believes the idea has potential in Canada. With a wider customer base and the existing recognition of the No Name brand, he is optimistic about the new venture. The company is embracing a “test and learn” approach, with plans to evaluate the success of the new stores within six months. Bank sees discount retail as a key growth engine for Loblaw in the coming years, along with other discount offerings like No Frills and Maxi stores.
The No Name stores aim to deliver significant savings to customers through a focus on simplicity and cost efficiencies. The concept is part of Loblaw’s broader strategy to stabilize or lower food prices in response to consumer demand and political pressure. By reducing operating costs and offering lower-priced products, the company hopes to attract budget-conscious shoppers and drive sales growth. The success of the No Name stores could lead to further expansion and investment in discount retail by Loblaw, with the potential for additional store concepts in the future.
The new No Name stores will differentiate themselves by offering a unique shopping experience with a focus on affordability and simplicity. The stores will feature a limited product selection, reduced operating hours, and reused fixtures to reduce costs. Prices will be significantly lower compared to other discount stores, with the majority of products priced below $5 and a large portion of products being No Name or President’s Choice brands. The company plans to closely monitor the performance of the new stores and adjust their strategy based on customer feedback and market dynamics.
Loblaw’s CEO is confident that the new No Name stores will be successful in Canada due to the wide customer base and brand recognition of the No Name label. He believes that discount retail will play a crucial role in the company’s growth strategy, alongside other discount store formats. By adopting a test-and-learn approach and staying open to new ideas, Loblaw is positioning itself as a leader in the Canadian grocery market. The success of the No Name stores could pave the way for further innovations in discount retail and reinforce Loblaw’s commitment to offering affordable food options to customers.
