The Rona store in Newton, at 6965 King George Blvd., closed permanently on Jan. 26. (Photo: Tom Zytaruk)

BUSINESS

Surrey retailers on losing end of online purchasing trend

Rona is the latest example of stores closing after a chain is bought by American giant

The permanent closure of Rona’s store in Newton a little more than a week ago continued a trend in Surrey where a corporate giant – often headquartered in the U.S. – buys up a chain of businesses in Canada and within a few years closes some of those acquired stores.

Lowe’s Companies Inc., a Fortune 50 home improvement retail giant headquartered in Mooresville, North Carolina, acquired Canadian retailer Rona for $3.2 billion Canadian on May 20, 2016.

A few months ago, on Nov. 20, 2019, Lowe’s Canada, based in Boucherville, Quebec, announced it will close 34 “under-performing” stores in this country.

The Newton store, at 6965 King George Blvd., is one of three stores closing in B.C. It closed permanently on Sunday, Jan. 26. The other two are Lowe’s Prince George and Rona Osoyoos. Six will close in Alberta, one in Saskatchewan, nine in Ontario, 12 in Quebec, and three in Nova Scotia.

Surrey’s two other Rona stores –in Fleetwood, at 16659 Fraser Highway, and South Surrey, at 3165 King George Blvd. – will remain open for business.

READ ALSO: Target to close all stores in Canada, including 19 in B.C.

READ ALSO: Pain will be shared with Surrey Sears closure

READ ALSO: Safeway closures at two Surrey stores will end 251 jobs

Valérie Gonzalo, a spokeswoman with Lowe’s Canada, told the Now-Leader that “eligible employees affected by the closures may be offered a transfer to a nearby store where possible.

“That said, we do not intend to comment on the number of employees that will be relocated at the end of the store closing process or where they will be relocated,” Gonzalo said. “Rest assured that we are making every effort to ensure a smooth transition until the stores are closed. All affected employees are supported by our HR team and have access to the Employee Assistance Program. We will not comment further.”

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Sign of the times, days before Rona closed in Newton on Jan. 26. (Photo: Tom Zytaruk)

We’ve seen this in Surrey before.

Sobeys supermarket chain, which is owned by Empire Company Limited headquartered in Stellarton, Nova Scotia, bought the Canada Safeway chain that was established in 1929, in 2013 and five years later announced the closure of 10 Safeway stores in Surrey, Vancouver, Burnaby, Coquitlam, Richmond and Mission for “financial reasons.”

The closure of two Safeway stores in Surrey – one in Newton Town Centre and the other in Strawberry Hill, put 251 employees out of work. Those locations were later converted to Chalo Freshco stores, which opened for business last July.

In 2011, U.S. retail giant Target – the eighth largest retail chain in the U.S., headquartered in Minneapolis, Minnesota – acquired the leases of Zellers stores in Canada and converted many of them into Target stores.

One of the first Zellers in B.C. to be re-opened as a Target outlet was the one at Scottsdale Centre, in North Delta, on May 7, 2013. and the Zellers at Central City shopping centre in Whalley also was turned into a Target store. But this was short-lived, with Target failing to make a successful go of it in this country and shutting down all of its stores in Canada by April 12, 2015.

The last Zellers in Western Canada, at Semiahmoo Shopping Centre in South Surrey, was closed in 2014.

And then there’s Sears.

The department store chain, which had been in business since 1953, received the green light from the Ontario Superior Court of Justice on Oct. 13, 2017 to start liquidating its inventory, furniture, fixtures and equipment. As a result of the closure of 74 stores across the country, including the one at Guildford Town Centre shopping mall, some 12,000 employees lost their jobs.

Sears Canada’s final hour at Guildford Town Centre was 6 p.m., Jan. 8, 2018. That location, at #1730-10355 152nd St., is now a Life InStyle Furniture store.

“We’re not only seeing it in Surrey, we’re seeing it across Canada, even with the Forever 21 retail chain as well,” says Anita Huberman, CEO of the Surrey Board of Trade.

Last November the Los Angeles-based clothing retailer closed all of its 44 Canadian stores – including a large one at Guildford Town Centre – deciding instead to make a go of it exclusively as an online retailer.

“We see these American retailers entering our market, and we do have a smaller population so their bottom line is going to be significantly less than in America, and in the end, I think, they’re not realizing the profit gains that they wanted to and have to make the difficult decision to shut it down.”

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Surrey Board of Trade CEO Anita Huberman (File photo)

“And we are facing job losses, we’re facing other economic impact as well because we have local vendors that serve Forever 21, or Sears or these Rona stores, and different procurement policies as well, for whoever is taking over,” Huberman notes.

She says this trend is “definitely” not lost on the Surrey Board of Trade, which is trying to develop a strategy to help the city adapt to it.

“We have to think of other ways to bring in business,” Huberman explains. “Later on this year we’re going to Silicon Valley to look at how technology companies are working there, seeing if there’s co-location opportunities to make Surrey more of a tech hub. The whole face of retail is changing because of the online purchasing phenomena.

“At the Surrey Board of Trade, we’ve been monitoring what’s been happening in our market and enacting strategies to try to diversify our industry base, such as in the manufacturing sector, our house and technology space. The retail sector is a difficult one – we’ve been monitoring it but we don’t have a specific strategy for the retail segment.”

Huberman believes these huge U.S. retail companies have been doing their due diligence, research-wise, before venturing into Canada. But…

“These are significant companies with significant resources, but in the end they’re not realizing the profits because of this online purchasing phenomena. People are purchasing their goods online, more and more.”

Such is life – and doing business – in this digital age.

“Especially with our younger generations, and also for the sake of convenience, when you’re talking about moving in traffic, for even groceries people are ordering online for the sake of convenience, and savings even, online,” Huberman notes.

“It’s an economic shift, for sure. But that only means that there’s room for new innovation, new opportunities. These economic cycles do happen. It’s very unfortunate – it impacts families.

“But we must work together to look at new innovative economic strategies, which we are.”



tom.zytaruk@surreynowleader.com

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