Mark Foote, the CEO of Canada’s second largest mass merchandise discount stores, ZELLERS, announced the introduction of food items to its existing product line. This move was initiated to compete with Wal-Mart Canada Corporation and Lablow Cos. Ltd. who have bulked up upon groceries to attract customers.

Mr Foote, former executive at Loblaw, began his venture by highlighting the household needs of the people and cheap-chic fashion for money-conscious consumers and has now chosen a field he expertizes in. “Due to the increasingly crowded grocery market that Zellers faces, the beginning results have been encouraging and the customer traffic has been stronger than expected”, said Mr. Foote.

Although food is a retail magnet, it still involves high investment and considerable amount of risk. Due to its perishable nature, an efficient network of transportation and warehousing is required to ship food. Adding to that, it faces competition from retail giant Wal-Mart who already have a well-established image for good quality food. In order to remain competitive, Zellers must match the prices of their rivals and at the same time ensure that the benefits justify the costs. Apart from the cost of establishment, expenses are incurred on hiring technical and support staff to manage the business, which must also be taken into consideration.

Source : THE GLOBAL MAIL