Grocery Retailer Loblaw Companies will pilot 3 new “ultra hard discount” stores called the 'no name' store, and its goal is to help customers save up to 20% off regular retail prices. 'no name` will review its prices relative to comparable product prices in the area’s top 4 discount grocery banners to ensure it is the same or cheaper. The store will carry roughly 1,300 'no name' Private label brands and national FMCG brand products, across grocery, produce and household, and aims to have more than 75% of its assortment listed at 10-20% cheaper than the lowest regular retail price.
The idea is remarkably simple. By reducing the store’s operating costs, 'no name' will be able to sell everyday essential items at the lowest price possible. So the store will have shorter hours 10 a.m. to 7 p.m., limited marketing, no flyers, no refrigeration (so no dairy or fresh meat), re-used fixtures, fewer weekly deliveries, and more.
The company says it is relying on reused fixtures such as shelves and cash lanes to reduce costs. It will have no self-checkouts, at least to begin with, said Bank. The streamlined product selection also means less waste, he added.
Building these stores will take about 10 to 20% of the cost of a new regular-sized soft discount 'No Frills' store, said Bank, giving the company more room to cut costs for customers.
Prices at the store will be up to 20% cheaper than comparable products at nearby discount stores, including its own 'No Frills' stores, with more than three-quarters of the products more than 10% cheaper, said Bank.
Two-thirds of the products will be below $5, he said, and just under 60 per cent will be own private label brand 'No Name' or 'President’s Choice' brands.
The idea stems from before Bank joined Loblaw late last year. When energy prices were on the rise in Europe a few years ago, he decided to test out this kind of smaller, simplified store at danish Salling Group with a hard discount banner called Basalt in Denmark, which launched in late 2022.
The concept didn’t pan out there, shutting down after seven months, but Bank believes the idea has legs in Canada.
One of the biggest struggles for Basalt in Denmark was that shoppers were reluctant to visit more than one store, said Bank, which the 'No Name' store concept relies on.
Canada also has a wider customer base for the stores, he said, and No Name is already a widely recognizable brand.
Within six months, Bank expects to have a good idea of whether the concept is working.
He sees discount being a “growth engine” in the coming years for Loblaw, from soft discount (franchise) No Frills and Maxi stores, smaller-concept No Frills locations, and potentially these new hard discount No Name stores in Canada.
Bank says he feels he’s brought a focused strategy for discount to the company, but also a “test and learn” approach that’s evident in the company’s recent discount ventures.
“We’re not afraid of testing new ideas,” he said.
The first store will open in Windsor on September 5th. Two more stores in St. Catharines and Brockville will open later this fall.
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