Loblaw is piloting a new type of discount store in Ontario as Canadians increasingly turn to discount banners and brands to manage high food costs.
The initiative, described as a “test and learn” project, aims to reduce operating costs by implementing shorter hours, offering no refrigerated goods, and limiting product variety compared to conventional Loblaw and even Frills stores.
“We’re piloting three new “ultra hard discount” stores called the no-name store, and our goal is to help customers save up to 20% off regular retail prices. We’ll be doing the work of reviewing our prices relative to comparable product prices in the area’s top 4 discount grocery banners to ensure we are the same or cheaper. The store will carry roughly 1,300 no-name and national brand products across grocery, produce, and household stores, and we aim to have more than 75% of our assortment listed at 10-20% cheaper than the lowest regular retail price,” says Per Bank, CEO and president of Loblaw.
The company plans to open three No Name stores in September in Windsor, St. Catharines and Brockville. These stores will feature a streamlined selection of 1,300 products, mainly pantry staples and household goods, with prices expected to be up to 20 per cent lower than those at nearby discount stores, including No Frills.
“The first store will open in Windsor on September 5th. Two more stores in St. Catharines and Brockville will open later this fall,” says Bank.
The new concept aims to offer significant savings while maintaining a simplified shopping experience. The cost to build these stores is estimated at 10 per cent to 20 per cent of a typical No Frills location.
The stores will operate from 10 a.m. to 7 p.m., have limited marketing and no self-checkouts. They will carry a small range of frozen items, packaged bakery products and produce but will not offer dairy or fresh meat. Cost-saving measures include the use of reused fixtures like shelves and cash lanes.
Loblaw’s move comes as discount grocery stores continue to drive sales growth for major Canadian grocers, responding to consumer demand for lower prices amid inflationary pressures. The company has been expanding its discount store network, converting existing stores, and launching smaller-format versions of its No Frills banner.
