Canadian Tire expands online
Retailer looks to become the No. 1 retail brand in the country for its 100th birthday in 2022
Canadian Tire stores will begin testing home delivery later this year, one of many new initiatives outlined at the company’s annual general meeting on Thursday, the first since chief executive officer Stephen Wetmore returned to lead the company last year.
“We have no fewer than 30 e-commerce initiatives underway at the moment, providing us critical learning on everything from search optimization to website experience to back-end fulfilment options,” Wetmore said at the meeting.
Canadian Tire stores currently offer only click and collect-in-store, although online shopping is available at its other banners, including Mark’s, Sport Chek, ProHockey Life and Atmosphere.
A new distribution centre in Bolton is slated to open this summer.
Canadian Tire retail has been relatively late to the online game, a weakness in the company’s overall e-commerce game, which Wetmore was purportedly brought back to elevate last year, replacing his successor, Michael Medline. Medline went on to become CEO of Empire Co., which operates Sobey’s.
“Based on what (the board of directors) were looking at in the future, my skill set fit the future better than Michael’s,” said Wetmore, who led the company through a period of transformative change between 2009-2014, when Target was preparing to enter the Canadian marketplace, heightening competition.
Profits at the national retailer jumped 26 per cent in its latest quarter, to $107 million, or $1.24 a share for the 13-week period ended April 1, compared to $85.6 million, or 90 cents per share, for the same period a year earlier. Revenue climbed 7.6 per cent to $2.75 billion.
The Toronto-based company said the improvement came despite warmer weather in January and February that hurt sales in outerwear, accessories and boots and a cold start to spring that took a bite out of sales in bicycles, running shoes and casual clothing.
Overall, sales at Canadian Tire locations grew 2 per cent, but same-store sales, a key metric measuring transactions at stores open for at least a year, were flat at 0.5 per cent.
FGL Sports, which includes the Sport Chek banner, saw a decline of 1.4 per cent in sales and a 2.7-per-cent drop in same-store sales.
Retail sales at its Mark’s stores increased by 5.7 per cent and samestore sales climbed 5.4 per cent.
Canadian Tire retail had its first billion-dollar month of sales in December, Wetmore said.
Wetmore said Canadian Tire has spent the past eight months reorganizing the business, including a renewed focus on product innovation. Anew consumer brands division has been tasked with creating new and exclusive products and has already grown the owned brands portfolio by $300 million.
Canadian Tire has also begun to look at how to sell branded products internationally, Wetmore said.
Domestically, it will test selling select assortments from Mark’s and ProHockey life brand in Canadian Tire stores. In late 2017, Sport Chek will launch the first Chek Kids store in the GTA, testing an expansion of a store concept first launched in 2015.
The company is also working on a new credit card and loyalty program and brand, with an internal working name of Crimson. “While many of my comments relate to the digital future of retailing, I should point out that most of our current profits come from bricks and mortar,” Wetmore pointed out.
In an interview following the annual general meeting, Wetmore said Canadian Tire has no plans to reduce its bricks-and-mortar footprint.
Canadian Tire has set a goal of becoming the undisputed No. 1 retail brand in Canada by 2022, the 100th anniversary of the brand.
Board chair Maureen Sabia made it clear in her opening remarks that while Wetmore was their choice to lead Canadian Tire through this transformative time, the board intends to stay intimately connected to the steps being undertaken to achieve that goal.
“The board expects and gets complete candour from management,” Sabia said.