Are mom-and-pop variety stores a dying breed?

CBC News Posted: Oct 25, 2013 11:42 AM ET Last Updated: Oct 25, 2013 4:05 PM ET

Is the mom-and-pop convenience store a threatened species?

Things are certainly getting tougher for the independently run dépanneurs and variety stores that dot Canada’s urban landscapes. Since 2008, 2,252 convenience stores have closed across Canada and the majority of those affected were independently owned.

The Canadian Convenience Store Association estimates stores lost $254 million in 2012, compared to profit of $1 billion in 2011.

Independently run convenience stores are finding it harder to survive because of new entrants to the market, high credit card fees and multiple regulations, according to the Canadian Convenience Store Association. (Associated Press)

Its annual state of the industry report points to a more competitive environment for the industry, with big companies such as Shoppers Drug Mart encroaching on the sector after its purchase by Loblaws.

There is also more chain ownership, with companies such as Alimentation Couche-Tard Inc. spreading its footprint. Of the 23,000 convenience stores in Canada, about 45 per cent were independently owned in 2012, down from 48 per cent the previous year.

Alex Scholten, president of the CCSA, said independent stores are getting squeezed, not only by competition, but also by rising credit card fees, contraband tobacco and regulations constraining the industry.

“What we’re seeing is a trend in the industry where the small independents who are not changing or adapting to the Canadian environment are going out of business. The chains are becoming more prevalent in the industry, so we’re seeing a shift in the nature of the industry and who’s in it,” he said in an interview with CBC’s Lang & O’Leary Exchange.

But he believes even small independents can be competitive, if they get some fundamentals right.

“Convenience store operators have to recognize what their strengths are. Our primary strength is time – we know the consumer out there is time-strapped and as long as we are able to get them in and out of the store quickly, offer them products they’re looking for and make sure that prices are not at a level that is insulting to them, I think we can continue to compete,” Scholten said.

He said it will take some innovation to stay ahead of the new competitors emerging in the market.

“One of things in our state of the industry report this year, we noticed that over 90 per cent of the stores that offered fresh food or food prepared on site were actually in a profitable position,” Scholten said.

One of the industry’s big concerns is high credit card fees and the industry association is looking at ways to expand debit card use in convenience stores, he said.

A loosening of provincial liquor laws might also provide a new way to attract business, he said.

“Certainly having the ability to offer a new product area, such as beer and wine outside of Quebec and Newfoundland where those are available, will offer a big advantage to our industry as well,” Scholten said.

He also points to the estimated 868 federal, provincial and municipal regulations that affect convenience store operators in Canada on everything from tobacco sales  to taxation and said the CCSA is pushing for a more streamlined regulatory regime.

“By eliminating out of date regulations, simplifying others or avoiding new, unnecessary regulation, we could achieve major improvements to the profitability of our members and to the Canadian economy in general,” he said in a press release.

“For this reason, we are calling upon governments to alleviate this burden, which we believe will trigger the creation of thousands of jobs and preserve a unique family business model that generates billions in tax revenues for the government."

Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET Oct 27, 2013 12:00 AM ET

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Quebec's Davie Shipyard launches new ship Cecon Pride

The historic Davie Shipyard in Lévis, Que., broke out the champagne Friday for the Cecon Pride, the first ship fully built in the yard in years.

The Cecon Pride is the first in a series of three large offshore construction vessels being built for Norwegian offshore installation contractor Cecon ASA. The ship, the largest built in Canada in 20 years according to the company, floated in dry dock Oct. 19 ahead of its naming ceremony Friday. 

"This is a great day for Davie. There are only a handful of shipyards across the globe, mainly in Europe, capable of building a vessel to this specification and with this level of technology," said Davie CEO Alan Bowen.

"Our high quality vessel construction capabilities and low cost base means we are the only North American shipbuilder competing internationally, exporting vessels to European shipowners; something Davie has done for over a century."  

It was the 717th ship built at the yard. The 130-metre vessel soon will begin sea trials prior to final delivery to the client in February 2014.

"It's used for multi-purpose applications. From pipe laying to subsea construction, to deep sea well intervention, it's really about deep sea,” said Alex Vicefield, chairman of the shipyard.

The Davie shipyard in Levis, Que., is shown in November 2012 after being taken over by Zafiro Marine. The shipyard will launch the Cecon Pride today. (Jacques Boissinot/Canadian Press)

Since being bought by Zafiro Marine of  Britain last year, the Davie Shipyard has recalled 500 workers. The potential for offshore oil and gas development and the ships to support construction, means more opportunities.

Up until the new owners took over, Davie spent years in troubled waters. Since being sold by Canada Steamship in 1976, it has been in and out of bankruptcy.

In 2010, it was under creditor protection. Davie had ended operations, putting nearly 1,600 people out of work.

There was hope in 2011 when a consortium involving SNC-Lavalin, Upper Lakes Groups Inc. and South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering took on restructuring of the yard in order to bid on ships being built for the Canadian Coast Guard and Canadian Forces.  

In the end, the federal government did not choose Davie Shipyard to build any ships and the joint venture fell apart, leaving Upper Lakes as the sole owner.

Zafiro Marine, which manages and operates a fleet of specialized offshore vessels involved in topside and subsea construction, took over in November 2012.

While work on new Canadian warships went to the Irving Shipyards in Halifax and Seaspan in Vancouver, Davie is considering bidding on  smaller government contracts.

"It's very difficult to ignore Davie in this situation. As I said, Davie is a significantly larger shipyard with a much higher capacity than the other shipyards," Vicefield said.

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