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Edmonton ideal incubator for independent retailers

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    Edmonton ideal incubator for independent retailers
    Western Canada's retail champ result of key factors

    Gary Lamphier, The Edmonton Journal
    Saturday, July 15, 2006

    Few people think of Edmonton as a retailing powerhouse. That's supposed to be the domain of major eastern cities like Toronto or Montreal. But that's exactly what Edmonton is becoming.

    With a regional population of barely one million people, E-town has given birth to a dozen national or regional retail chains, including such firms as The Brick, Katz Group, AutoCanada, Liquor Stores, Liquor Barn, Planet Organic, Running Room, Booster Juice, Fountain Tire and XS Cargo.

    That's more than any other city west of Ontario.

    Whether you're talking car dealerships or booze outlets, drugstore chains or big-box furniture and appliance stores, organic food outlets or purveyors of fruit drinks, Edmonton is Western Canada's retail champ.

    I used to think this was simply an oddity. A curious byproduct, perhaps, of this prairie burg's unlikely status as home to both the world's largest indoor shopping mall, West Edmonton Mall, and the country's biggest power centre, South Edmonton Common.

    But that alone doesn't explain it. Clearly, there's a confluence of several other key factors here that make Edmonton an ideal incubator for independent, fast-growing retailers.

    Among them: lofty population growth; high disposable-income levels; youthful demographics; record housing starts; lack of a provincial sales tax; low retail rental rates; long winters, which make retail stores popular gathering places; and an entrepreneurial business culture that's far less reliant than Calgary or Vancouver on conventional head-office jobs.

    Given that, it's little wonder that Edmonton consistently boasts one of the highest retail-sales growth rates in Canada. Here's a snapshot of just a few of the key retail players that are based here:

    - The Brick Group Income Fund is Canada's largest independent furniture, appliance and home electronics retailer. Its national store network -- operating under such banners as The Brick, United Furniture and HomeShow Canada -- generated sales of more than $1.2 billion last year. The 35-year-old company, which expanded into Quebec in 2005, expects to add nearly 20 new outlets in 2006, boosting its total store count to 212. At the same time, it's consolidating most of its retail banners under the Brick name and improving its distribution system.

    Company chairman and founder Bill Comrie took The Brick public in July 2004 on the TSX. The Brick's units closed Friday at $10.10, giving the company a market value of about $547 million.

    - Katz Group is one of North America's 10 largest drugstore chains, with annual sales of some $6.5 billion. Its sprawling, 1,800-store network operates under a variety of banners, including Pharma Plus, Rexall, Medicine Shoppe, Guardian and I.D.A. It also operates the Snyders drugstore chain in Minnesota.

    Fortune magazine ranks the company's media-shy founder, owner and CEO, Daryl Katz, as one of the world's 500 wealthiest people, with a personal fortune estimated at some $1.6 billion US.

    Although most of Katz Group's corporate and administrative staff are located at its flagship office in Metro Toronto, Katz and a small group of senior execs are based here in Edmonton.

    AutoCanada Income Fund, which operates a chain of franchised auto dealerships across six provinces stretching from B.C. to Nova Scotia, generated revenues of $628 million in 2005.

    By completing a $110-million IPO on the TSX in May -- issuing nearly 11 million units at $10 a pop -- AutoCanada established itself as Canada's first publicly traded, multiple-location, franchised auto-dealership network. The units have performed well since, closing Friday at $11.44 apiece.

    AutoCanada's 14 dealers sold some 19,000 Chrysler, Dodge, Jeep and Hyundai vehicles last year, while processing 204,000 service and collision repair orders. The company intends to grow by acquisition and by opening additional franchised auto dealerships.

    - Liquor Stores Income Fund, Alberta's largest liquor retailer, operates the Liquor Depot and Liquor World chains. The company went public at $10 per unit on the TSX in September 2004, and it has grown rapidly since.

    The 80-store chain reported sales of $38 million in the first quarter of 2006 -- up about 42 per cent versus the prior year -- and it's well on its way to reaching its ultimate goal of 100 retail outlets.

    Liquor Stores' units have also fared well, closing Friday at $18.95 on the TSX, giving the company a market value of more than $200 million.

    - Planet Organic, whose shares trade on the TSX Venture Exchange, is another fast-growing, acquisition-oriented Edmonton-based retailer that's making noises across the country.

    Planet Organic's natural food stores are located in Edmonton, Victoria, Calgary, Port Coquitlam and Halifax, and it also operates 48 natural-health outlets under the Sangster's banner. A third company unit, Trophic Canada, is a leading maker of natural supplements.

    Planet Organic has reported five straight profitable quarters. Its shares closed Friday at $2.37 on the TSX-V.

    [email protected]

    Great article. I can bet you that the majority of Edmontonians have no idea that those companies are based in Edmonton, except for maybe Rexall.

  • #2
    Good article, lets keep shouting it to the world!!

    Edmonton's retailers have certainly taken on a noticible presence in the city the last few years as well, ie Rexall Place, WEM/Brick Grandprix...great to see!


    • #3
      Let's not forget that we're one million plus hundreds of thousands of northerners who come down for a weekend and shop untill they drop. Our service area is actually broader than Cowtown's.

      Once you get south of Calgary there ain't much. I'm from Lethbridge so I can say that. I'm not slagging southern Alberta - I love it like Edmonton - but the population base isn't there.


      • #4
        Yeah, you're right. South Eastern AB has a whole lot of open spaces...
        My hope is that you can finally get rid of the anger in your heart, and fill it with peace, compassion, understanding, and a desire to uplift rather than suppress.

        After all, we are all together on this home, this pale blue dot, the "only home we've ever known.”