With store closures and low sales, Sears Canada is attempting to turn things around with an entrance into the grocery business. The Toronto-based department store chain has partnered with two specialty supermarket operators to run food markets at some of its retail locations.
Brandon G. Stranzl, executive chairman of Sears Canada, says this move should drive more traffic to Sears locations—shoppers visit grocery stores much more frequently than they do department stores.
The announcement comes as Sears Canada is struggling with finances: this year’s third-quarter report showed doubled losses from the same time last year. Quarterly revenue was $625.2 million, down 21.1 per cent from the third quarter of 2015, which showed $792.1 million in revenue.
“We’re not, obviously, happy with where the business is financially,” says Stranzl, adding that things won’t improve “overnight.” To help speed this process along, Sears has been redesigning stores and leaving more retail space for new partnerships.
Sears follows in the footsteps of companies like Walmart and Shoppers Drug Mart, which both entered the grocery business in recent years. For independents, this move may or may not spell trouble: with these fully integrated department stores moving into the grocery category, smaller retailers will have to increasingly compete for market share.
