Ethnic Stores Expand in Canada

MARK HAMSTRA

Supermarkets catering to the burgeoning Asian population in Canada are opening at a rapid pace throughout the nation, observers said.

Although thus far analysts said the stores are having a minimal impact on the nation's largest traditional operators, the increasing presence and retail acumen of these operators could pose a threat down the road.

“They are opening large stores everywhere, with great produce and great seafood,” said Perry Caicco, an analyst with CIBC World Markets, Toronto. “Toronto is the epicenter for this, but it is also happening in places like Edmonton, Vancouver and Calgary.”

Asians are the largest and fastest-growing minority population in Canada, comprising more than 10% of the total population, according to Statistics Canada.

Caicco said many of the latest stores that are opening to cater to this population are very clean and well-run.

“These are not low-end markets,” he said. “They are well-operated, and as low priced as a hard discount store.”

He said he estimates that as much as 15% of the grocery volume in the Greater Toronto area may be going into the tills of these Asian-style supermarkets, which carry large varieties of specialty produce and other products sought out by Chinese Canadians — which comprise 4% of Canada's population — and other Asian consumers, which include shoppers of Indian and Pakistani descent.

One of the more successful of these stores is T&T Supermarket, based in Richmond, British Columbia. The chain, founded in 1993, now has 16 supermarkets across Canada, mostly in urban areas. The company has among its investors Tawa Supermarket, a California-based Asian supermarket chain of 21 stores, and Uni-President Enterprises Corp., a public conglomerate based in Taiwan, according to the T&T website.

The growth of such stores is being fueled both by the increasing Asian population in Canada and by a growing interest in Asian cuisines among non-Asian consumers.

“T&T has been around so long they have attracted a large Anglo clientele,” Caicco explained. “They have found that over time, Anglos appreciate the quality of the offering.”

Marty Weintraub, vice president of the grocery practice at Karabus Management, Toronto, noted that Asian stores like T&T may be affecting volumes of individual locations of the large traditional supermarket operators, but they are a tiny fragment of the overall industry.

“T&T Supermarket operates beautiful stores, but they are not even close to having a big impact,” he said.

Still, Caicco of CIBC cautioned that as more and more of these Asian markets are run by second-generation immigrants with experience working at the large traditional chains, their share of the industry could grow.

“We ignore them at our peril,” he said. “They are putting a hidden pressure on grocers in this country, and I don't think people are acknowledging it.”