Giant Tiger

A Giant Tiger store in Stratford, Ontario.

Giant Tiger Stores Ltd. is a Canadian discount store chain which operates over 200 stores across Canada. ^[1] The company's stores operate under the Giant Tiger, GTExpress, and Scott's Discount banners in Ontario; under the Tigre Géant and Chez Tante Marie banners in Quebec; and under the Giant Tiger banner in Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Saskatchewan.

The chain employs over 7,000 people.^[2] The headquarters and main distribution centre are located on Walkley Road in Ottawa, Ontario.

Business model

Inspiration

In the mid and late 1950s, Giant Tiger founder Gordon Reid, who was then in his early twenties, was a travelling salesman for an importer in the United States.^[3] In the American Midwest, Reid first saw discount stores. Discount stores were a new concept at the time. He was particularly impressed by Uncle Bill's, a chain headquartered in Columbus, Ohio.,^[4] which was one of his clients.^[5] The discount store concept did not yet exist in Canada, and it therefore represented a business opportunity.

Reid reports that he was also inspired by Frank Woolworth’s continent-wide success, half a century earlier, in creating hundreds of profitable Five-and-Dime stores. Reid’s own retail experience, dating back to his first job as a teenager, had been in department stores rather than in discount,^[6] but his mother had worked behind the luncheon counter at a Woolworth’s in downtown Montreal.^[2]

Reid stated, four decades later, that he had believed, even at this early stage, that it would be possible to build a Canada-wide chain based on this model. Asked by a reporter whether he had ever imagined that Giant Tiger would eventually have the success it was then enjoying, Reid stated, “Yes. That was the original intention. The idea for the business came when I was a travelling salesman. I saw the discounters growing. My original inspiration was the F.W. Woolworth Co., obviously that was a big chain. So this was always the plan.”^[7]

Ownership structure

Former logo

Key head office personnel are co-owners of Giant Tiger Stores, Ltd. Initially, Giant Tiger’s head office was quite small; and ownership was therefore shared among a small number of people. By 1980, ownership had been shared between Reid and ten key employees.^[8] Gordon Reid has stated that Canada’s agricultural cooperative movement was his inspiration for this innovation.^[8] Making his employees into part-owners of the company ensured that, as in the coop movement, all employees would share a common interest in maximizing profits.

Franchise system

Giant Tiger #1, opened in Ottawa’s historic Byward Market in 1961, was company-owned. The first franchised Giant Tiger was opened by Jean-Guy Desjardins in Maniwaki in 1968. The benefit of this new way of operating was felt immediately. Up to this point, Gordon Reid and his small head office staff had been trying to make all key decisions, with the result that, despite its small size, the chain was slow-moving and inflexible. But, as Reid would explain it forty years later, from the moment the change was made, “the [Maniwaki] store made money and I didn't have to do anything. [Jean-Guy Desjardins] did the advertising, he found the location, he merchandised it to suit his customers, he did everything….And, I thought, 'by golly, that's a good system.' “^[9]

Because the chain most often has been shoehorned into existing spaces now too small for the major big-box store or hypermarket chains, individual store managers are given wide leeway in ordering decisions and are free to devote their limited floor space to items which sell well in their local market. This flexibility, and a distribution system in which stores are restocked daily, allows stores to "pull" only the inventory they immediately need and facilitates greater turnover per square foot of scarce retail space.^[10]

In 2010, Reid reported that the issuing of no-cost franchises to experienced retailers "was a great way to get experienced people. Over the years we had a lot come from Woolworth, Kresge, Kmart and later Zellers." In the same interview, Reid stated that over twenty Giant Tiger franchises are now run by former Walmart employees, most of whom had been attracted by the same franchise system that he had introduced decades earlier.^[5]

History

Sales volume and number of stores

Gordon Reid opened the first Giant Tiger store, on George Street in Ottawa’s Byward Market, on May 13, 1961, with a $15,000 investment.^[2] First-year sales of $139,781 were far lower than Reid had anticipated, and by the end of 1962 he decided to close the store. Unexpectedly, the rush of customers attracted by his going out of business sale provided enough cash flow to keep the business afloat.^[5]

Although the store survived, expansion was slow. A second location, in the small town of Brockville, was not opened until 1965.^[2] By the time of the company's tenth anniversary, in 1971, it still had only six stores.

Because Giant Tiger has always been privately held, information on profits is usually not available, and information on sales is available only through media reports. Based on these sources, it is possible to trace a somewhat sporadic history of the company's growing sales figures, number of stores, and, where possible, the number of employees:

• 1962: $139,000 (1 store)
• 1965: $444,000 (2 stores)^[2]
• 1980: $20 million (22 stores)^[8]
• 1984: $60 million (29 stores)^[4]
• 1985: $75 million (34 stores, 500 employees)^[4]
• 1986: $90 million (37 stores)^[4]
• 1990: $163 million (54 stores)^[11]
• 1991: $200 million (60 stores,^[5] 1,200 employees)^[12]
• 1994: $220 million (63 stores)^[9]
• 1996: $300 million (79 stores, 2,000 employees)^[12]
• 1999: $450 million (90 stores, 2,600 employees) ^[13]
• 2000: $600 million (102 stores,^[14] 3,500 employees)^[15]
• 2006: $1 billion (164 stores)^[16]
• 2007: $1.3 billion (182 stores)^[9]
• 2013: $80 million profit (200 stores)^[17]

As of 2015, there are 206 stores and an expansion plan calling for 13 additional stores. The 2015 withdrawal of Target Canada from the marketplace presented an expansion opportunity for Giant Tiger.^[18] Its first acquisition of a Target store occurred in Fergus, Ontario where 16,500 square feet (1,530 m²) of an approximately 100,000 square feet (9,300 m²) large Target store was acquired by Giant Tiger. This location is expected to open in the spring of 2016.^[19]

Geographic expansion

In 2001, Giant Tiger and The North West Company (NWC) signed a 30-year Master Franchise Agreement that grants NWC the exclusive right to open and operate 72 Giant Tiger stores in western Canada by 2032. In 2013, thirty-one of these stores were open and NWC was eyeing expansion into older city neighbourhoods and rural towns too small to support a Target or Walmart.^[20]

The chain has undertaken a major expansion in the Greater Toronto Area since 2005. It has opened seven stores in Bradford, Brampton, Markham (now closed), Newmarket, Scarborough and Etobicoke.

The 200th Giant Tiger store opened in Nova Scotia in October 2010.^[2]

In 2004, Giant Tiger opened a single store in Potsdam, New York, its first (and only) in the United States. This store closed during the Great Recession in 2009.^[21]

Franchising

In 1968, Giant Tiger opened its first franchise stores, which now account for the majority of locations. The goal was to better serve the customer by having local owners in the stores.

The North West Company operates 32 franchise locations in Western Canada.^[22]

New brands/trade names

In 1977, Giant Tiger established Chez Tante Marie stores in Hull and Gatineau, Quebec. These two stores continue to trade under this name.

In 1996, the Scott's Discount brand was launched as an alternative format for smaller stores.

In 2008, Giant Tiger opened its first GT Xpress outlet at a former Giant Tiger location in Ottawa's working-class Hintonburg neighbourhood. GT Xpress stores are intended to service less mobile residents of densely populated neighbourhoods, so that residents will not have to leave the neighbourhood to shop at a big-box store. Because larger retail spaces are unavailable in such inner-city neighbourhoods, the merchandise selection at GTXpress stores is more limited than at a full-size Giant Tiger, let alone a big-box store. Traditional lines of Giant Tiger merchandise are further restricted to free up space for an expanded produce, dairy, deli and bakery section. Effectively, a GTXpress store is a discount version of a convenience store, characterized by a "focus on what the customer needs today, as opposed to [carrying a full assortment of] what the customer wants." In view of the fact that the ethnic makeup of individual inner-city neighbourhoods is likely to differ substantially, franchise owner at each GTXpress outlet will have the authority to tailor "product lines to cater to ethnic diversity in the area."^[23]

Trucking/warehousing

In 1987, Giant Tiger launched its own trucking fleet (known internally as Tiger Trucking)^[4] to make regular shipments from the warehouse to stores.^[2] In 1999 it was reported that the company's trucks were making deliveries to each store three times a week.^[24] In 2001, Reid reported that deliveries were taking place daily: "We have the most efficient shipping and distribution system in the general merchandise field.... It is equivalent to the grocery stores. We deliver to stores five times per week. There is no one else in the general merchandise industry that does that and we do it with our own trucks."^[4]

On May 31, 1996, Giant Tiger purchased and took possession of a 29,000 m² (315,000 sq ft.) distribution centre on Walkley Road in Ottawa, previously occupied by Sears Canada. The company's headquarters moved to this location later the same year.

In December 2005, Giant Tiger opened a new 3700 m² (40,000 sq ft.) distribution centre for frozen and refrigerated products in Brockville, Ontario.

Changes in management structure and key personnel

In October 2010, Reid stepped down as chief executive officer of Giant Tiger, in favour of Andy Gross, a 25-year veteran with the chain, who started working as a buyer when there were fewer than thirty stores. Gross had, by this time, already inherited the presidency from Jeff York.^[2] Gross decided to retire effective August 1, 2014 and was then replaced as president and COO by Greg Farrell, who in turn was replaced on March 1, 2015 by former Zellers president and COO Thomas Haig.^[25] As of 2015, Reid retains the posts of chairman of the board and CEO.^[2]

A proposal to sell the company was briefly raised in October 2013,^[26] but soon abandoned.^[18]

See also

• List of Canadian department stores

External links

• Official website

References