No Frills-Location Strategy PDF

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Summary

The Layout strategy of No-frills...

Description

Selection of location to set up the store is very vital in the business plan. Right location is the key element to attract right customers. It involves meticulous decision-making process since setting up a store involves huge capital investment be it a leased property or an own one. A well-located store makes supply and distribution easier. Movement of materials, human resources are also to be considered while locating the store.

"We have different stores for different consumer segments, and No Frills has a very clearly defined value proposition," Mr. Stueckmann Population in and about 5 kms around the area, neighbourhood demographics, flowing traffics are considered before taking a strategic decision of the location. Demographics of the place becomes very important in both locating the stores and stocking the shelves. Shopping pattern of people varies largely area to area. so demographic database is to be collected precisely as it is the population in that area is what will determine the success of the business. Urban communities who is so considerate in saving every penny possible, never mind driving a few more minutes to access the hard discount stores as No frills. No frills stores are always located in the neighbourhood community that have well connected roads, ample car parking space. Distance between two stores is 5-7 kms. So, they cover almost every neighbourhood. A well-placed store can retain its customers easily. No frills which is operating in around 250 stores in 9

provinces in Canada largely adapts franchise business. Its franchise model has a become a huge success since each store can become more connected to its neighbourhood. Its popularly referred as Community-centric approach of No frills.

No Frills store owned by Loblaws was opened on July 5, 1978 in East York, Toronto. The first store was a converted Loblaws conventional store which was planned for closure. In 1988 there were 19 No Frills stores located in Ontario. Loblaw started to convert the stores from company owned stores to franchise model which doubled the store counts to 48 by 1994, and in late 1990s, that number had increased to 79 stores. The new franchise operations typically displayed the name of the owner, such as "Joe's No Frills" or "Derek's No Frills". Later Loblaws acquired Three former Knob Hill Farm supermarkets in Toronto and converted it to No Frills stores after the chain had closed all its stores in 2001 due to increasing competition. In 2007, Loblaw began expanding No Frills beyond Ontario, first into Western Canada, and later into Atlantic Canada. No Frill’s everyday low prices business model and a community-based franchise model expanded its presence rapidly in Canada. No Frills now operates in 9 provinces with more 250 stores in Canada. According to Pierce, the store’s franchise model works so well because each store can become more

engaged in its neighbourhood and allows franchises flexibility when stocking items in their stores.

Comments No Frills stores location selection played a vital role in expanding its business all around Canada. No Frills stores low cost model was conceived from European Market by Loblaws. It converted its conventional store which was planning for closure into a No Frill store and became instance success. Further No Frills stores adapted a demographic approach to expand rapidly around Canada. This model paved ways to open lot of stores in the low-cost income communities. The Location based Owner operated Franchisee model adapted by No Frills stores outreached the neighbourhood easily because the owner, the work force and the customers belong to the same communities. No Frills stores selected a location which is less competitive for low price retailing by avoiding the saturated locations. No Frills stores now also operates in uptown localities to serve “value for money” customers. Most of the No Frills stores locations are in the radius between 3 to 4 miles so that it can easily serve the whole area of localities.

References

Dunne, M. (2020). No Frills: The discount grocer with swagger. Retrieved 10 March 2020, from https://strategyonline.ca/2018/11/16/no-frills-thediscount-grocer-with-swagger/

Mead, M. (2020). Loblaw Expands in Winnipeg Under No Frills Banner. Retrieved 10 March 2020, from https://www.andnowuknow.com/quickdish/loblaw-expands-winnipeg-under-no-frills-banner-John-Pierce/maggiemead/62229...