The Bargain Shop: Meeting the Needs of Canadian Communities

For Canada, The Bargain! Shop has been the answer to good value at conservative prices since well before the economic crash. The company started as the Canadian sister to Woolworth’s discount store chain and broke off as an independent entity in 1999. Its market mainstay as the place where fair deals abound have allowed it to flourish despite separating from its previous parent company, and it has done this by knowing exactly who its customers are and what they need.

“We are probably strongest in our rural areas,” the company explains. “And we appeal to the broadest base within those areas. In rural stores you might have someone that works in the service industry at a gas station shopping right alongside the president of the bank. It’s just a part of life, so we appeal to a pretty broad range in those areas.  To the people who want to shop with us every day and are not looking for a 3-D TV, to those who like a brand name that they feel comfortable putting on their body or in their body, to people that want private labels so they can reduce expenses if necessary – we meet the needs of these customers.”

The Bargain! Shop has developed its stronghold in smaller and rural communities, but it doesn’t shy away from larger metropolitan areas, either. Its 228 locations are dispersed throughout all the provinces, except Quebec, and its number continues to grow.

In 2008, The Bargain! Shop purchased 65 former Saan stores which grew it in size by almost one-third.  The company is working on updating its stores and has already reformatted 53 stores and has another 20 slated for this year.

In addition, the company recently purchased 11 former Hudson’s Bay stores that will now fly The Bargain! Shop’s name, bringing their total store count to 238 (one store will be a relocation). The new stores are located throughout central and western Canada in Ontario, Manitoba, Saskatchewan, Alberta and British Columbia.

“As part of our plan to further grow our organization, this is a great opportunity for us to expand our footprint across Canada,” the company says. “The Bargain! Shop is committed to offering the Canadian consumer in small markets a convenient option that provides great value and strong customer service. We are excited to further grow The Bargain! Shop brand and continue to serve and invest in smaller communities across Canada.”

Great Shopping Experience

The Bargain! Shop’s newer and older stores are being integrated into new layout and product programs that will provide customers with a more convenient and accessible shopping experience. The company explains that the previous store concepts lacked a sense of flow and continuity.

“If you went to some of the stores right now, you would see that some of the existing stores don’t do a good job of presenting the product in a logical manner to our consumer,” the company says. “The example that sticks out is that food would be put on the left side of the store and snacks on the right side of the store with apparel in the middle. They didn’t have adjacency, so we cleaned that up.” So if a female customer – women are the bulk of the company’s consumer base – comes in looking to spruce up her home, she will now find towels and bath mats one aisle down from home décor, table cloths and bedding.

Another initiative to make the store more shoppable is the use of planograms, a visual merchandising tool that determines exact placement of product to maximize the customer experience and sales. The Bargain! Shop’s retail strategy has proven especially helpful as the company has partnered with new suppliers to diversify their product list with well-recognized brands such as Coca-Cola and Clorox.

“Using planograms, we are working to be more everyday shoppable with branded products as well as private-label products,” The Bargain! Shop says. “The brand helps reinforce the value of the private label. When we added Clorox Bleach, our private label sales doubled and our laundry section has become more of a destination for shoppers because of the brands that we have added.”

The same concept goes for its beverage section. “We used to only carry Pepsi, and they are still a great, reliable supplier for us,” the company says. “But having Coke come in, our entire beverage universe has expanded. It’s almost doubled. The sales didn’t diminish for Pepsi; they continue to grow along with Coke. It’s keeping happy relationships with the customer and has been positive for new vendors and existing vendors.”

In the same way The Bargain! Shop has added new items to benefit customers, it has also subtracted products that didn’t add to the store’s value, such as big-ticket electronics. The company has instead invested those dollars into a new pet food and accessories aisle. The company tested it out in reformatted stores and launched it companywide last November. Currently, all the pet foods are from brand names, but The Bargain! Shop plans to develop a private-label brand, as well.

As Canada prepares for what some have coined “the U.S. retail invasion,” with big-box stores such as Target planning to enter the market, The Bargain! Shop will focus on expanding its strengths in new and current markets. “We believe our small size will make us a more convenient aspect, but the big-box retailers do carry items we do not carry. But we choose to employ our dollars where it will most benefit our customers and we are pretty happy with what we’ve done,” the company says.