MONTREAL -- Canadian retailers are increasingly tailoring individual stores to meet shopper needs, according to a state-of-the-industry report here by the Canadian Council of Grocery Distributors.
sket expenditures," the report said.
"Grocery distributors face the continuing challenge of providing consumers with the traditional services they require and the specialty services they demand. The successful retailer will bring new technologies and creative initiatives together to meet these expectations."
Of particular interest to Canadian operators, the report said, is the growing tendency of food stores to cater to the rising consumer demand for meal solutions instead of just meal ingredients. According to the council's survey, Canadian retailers that remodel stores are adding prepared-food sections more often than any other department. More than 20% of Canadian stores had prepared-food sections by the end of 1995 -- well behind retailers in the United States, where 66% of supermarkets offer meal solutions, the report said.
In Canada, prepared foods account for an average of 2% of store sales vs. 5% in the United States, the survey found. Labor costs represented 20% of total prepared-food sales in Canada, compared with 25% in U.S. supermarkets. But Canadian operators are more likely to employ food-service professionals and professional chefs than their U.S. counterparts, the report noted.
Much retail growth will come from Canadian operators' effort to tailor businesses to customer needs at the store level, according to the study.
"Retail food distribution is faced with the same challenge as other distribution channels of responding to the demand for mass customization, which is the need to find economies in mass distribution while responding to a multivariant consumer with significantly different demand patterns, [based] on changing demographics and lifestyles," the report said.
"Maintaining and emphasizing banner identity is key to heightening consumer awareness and implementing micromarketing tactics. Distributors who can use their client scanning data and other new information technologies to provide a product mix tailored to their customers' needs in a format that promotes convenience will develop the banner and channel loyalty necessary for success."
Among the report's findings were the following:
Average weekly sales per square foot of selling area were lower in Canada during 1995 -- $12.11 (Canadian) vs. $13.62 in the United States.
Canadian supermarkets averaged 25,125 square feet, compared with 37,539 square feet for U.S. supermarkets.
The average number of items carried was 17,522 in Canada vs. 34,575 in the United States.
Store brands accounted for 24% of total grocery dollars in Canada -- a growth rate of 11% and almost double the all-commodity growth of 6%.
Sales per labor hour were $149.42 in Canada vs. $145.23 in the United States.
Average item price was $1.97 in Canada vs. $2.28 in the United States.
Labor expenses in Canada were 8.2% of sales, compared with 10.3% for U.S. retailers.
Inventory turned 22 times a year in Canada vs. 16 times in the United States.
In distribution, 22.7% of Canadian employees work under engineered labor standards, and Canadian companies ship 151,313 cases per week, just a third of the U.S. average.
Average capital expenditures for remodeling were $440,923 in Canada vs. $1.9 million for U.S. operators.
Canadian companies said the most pressing consumer issue was economizing by their shoppers, while U.S. companies cited increased consumer demand for convenience.
Canada and the United States have similar ratios of full- to part-time employees, at about 40% full-time. But U.S. turnover rates are much higher for both groups, especially part-time employees.