Giant Tiger sees quiet success as it roars across Canada
Giant Tiger’s target customer is named Michelle. She is a working mom of two, stretched for time, stretched for money and she doesn’t want to shop a 140,000-square-foot store to pick up some clothes for the toddler and chicken for the grill.
Once upon a time, not so long ago, Michelle was a rural girl. But these days, Giant Tiger is drawing Michelles from around the Greater Toronto Area, with small, efficient and economically executed 16,000- to 27,000-squarefoot stores where Targets used to be — but in a fraction of the space, in frayed strip malls where rents are low or in newer strip malls where populations are soaring.
The floors are vinyl composite, the walls a deep mustard yellow — yellow and orange are associated with value pricing in retail. The merchandise includes the expected clothing, homewares, toys, tools, groceries, including fresh groceries, as well as the unexpected: fireworks, As Seen on TV products and automotive (as in Blue Jays-branded car utility mats, not carburetors.)
Also unexpectedly, the Ottawa-based chain employs a fleet of buyers based in Montreal who travel the globe and scour the web to keep up with current fashions — without being fashion forward — at prices Michelle can afford: $5 for a cotton T-shirt, $14 for a blouse. She likes to be current without being ridiculous about it. You won’t find her in the widest flood pants or a bra layered over her clothes.
Recently, Giant Tiger stores began testing the sale of fresh meat in the grocery section, and the chain is looking at rolling it out in as many markets as possible.
Giant Tiger began expanding after Target fled Canada in 2015 — the U.S. retailer was disastrously unable to keep shelves stocked in a marketplace where it had yet to prove itself. The real estate opportunity was a draw for Giant Tiger, as was the gaping hole left by Target in the marketplace.
“We believed that there was an opportunity for us to take advantage of what was happening,” says Thomas Haig, president and chief operating officer of Giant Tiger.
There are now 243 locations, up from 220 in 2016, and another seven locations on the way.
The company expects to continue expanding for the next two to three years.
There are now Giant Tigers in every Canadian province except British Columbia and Newfoundland and Labrador. They won’t rule out a downtown Toronto presence — in a neighbourhood with the right demographics and the right rent, Haig says.
“Given the right financial model, we would definitely consider it,” says Haig, who joined Giant Tiger in 2015 after a career that spanned Woodward, T. Eaton Company, Hudson’s Bay Co., Zellers, Kmart and Danier Leather.
Much has changed in the two years since the Giant Tiger expansion was launched.
Sears Canada failed, liberating more real estate and leaving $2 billion in sales on the table for enterprising competitors to fight over. Haig says a portion of those Sears shoppers have switched to shopping at Giant Tiger. That’s the good news.
The bad news is that Dollarama is continuing its relentless expansion across the nation, with more than 1,300 stores and counting. And there’s a new kid on the discount block: Miniso. The Chinese retailer debuted in Canada in 2017 with plans to rapidly expand to 500 stores in three years.
It doesn’t play in all the same categories as Giant Tiger, but it does compete for the novelty buys, where opportunities are rife to make a hefty profit.
Giant Tiger believes it has a competitive advantage in its franchisees, who have a deep knowledge of the communities where their stores are located. If they don’t already have retail experience, they work at Giant Tiger to acquire it.
“We’ve got some store owners (who) have been in areas for 30 years and probably know 40 per cent of the customers by their first name,” Haig says. “We have some store owners that could be elected mayor because they’ve been that long in the community.”
Spokesperson Alison Scarlett says Giant Tiger listens to franchisees and respects their feedback and opinions on the business and their markets.
“Respect is the cornerstone of who we are as a retailer,” Scarlett says.
Jamie McLean, a franchise owner in Hamilton, was at Zellers for 16 years before joining Giant Tiger 10 years ago.
By the time he purchased a Giant Tiger franchise in 2016, he’d worked at 30 different stores, building up his relationships with other managers and owners.
He thinks the store size at Giant Tiger is one reason for the high level of customer loyalty the retailer enjoys.
“There is a relationship and a bond with customers that I have never seen in my entire retail career, and I have to think it has to do with the size of our footprint and just being able to interact with them. It’s just a great thing,” McLean says.
Once a year, their best customers at all stores are invited to shop, at a discount and after hours, in a store that has been closed to the general public.
Founder Gordon Reid, who opened the first Giant Tiger store in Ottawa in 1961, remains at the helm as chair and CEO. Now in his 80s, he still comes into the office every day and is involved in the strategic decisions and direction of the company. He is media-averse and declined to be interviewed for this story. But it was always his dream to run a discount retail empire.
“What is motivating him? I guess you could say the same thing as Warren Buffett, I think,” Haig says.
“Gordon loves it. He lives and breathes Giant Tiger. He’s in every day. Don’t forget, he built it. It’s his baby and he went from one store to 240-plus stores. I think it’s amazing that he comes in and has such vim and vigour and gets excited about an item selling, or a store is up x-amount per cent,” Haig says.
Sally Seston, managing director at Retail Category Consultants, believes Giant Tiger has room to grow in Canada.
“I think they’ve combined sort of the treasure hunt that you would get at a Costco or at a Winners; they’ve combined that idea of the treasure hunt with some staples — some of them are private label, but some of them are also national brands that people are looking for — like Levi’s,” Seston says.
But while Giant Tiger likes to promote its Canadian roots, Seston doesn’t think waving the Canadian flag translates into ringing up sales at the cash register. While patriotism is nice to have, research has shown it’s not high on the list of things consumers are looking for when they shop. Price and value come first.
“I would love a second-floor laundry, but the truth is that when I am looking for a home, I am not buying a house for a secondfloor laundry if it doesn’t have enough bedrooms. I’m not shopping at a store because it’s Canadian if it means it’s more expensive or if it’s way out of my way,” Seston says.
Retail consultant Maureen Atkinson, senior adviser at J.C. Williams Group Global Retail Advisors, says the brand has carved out a niche for itself in Canada.
“I think they kind of fly under the radar. They’re not in big cities. They’re not in expensive real estate,” Atkinson says. “It seems to work for them.”