Do No Name Stores Make Sense?
When I first heard about Loblaw's plan to launch a dedicated store for its No Name brand, I was intrigued. However, the more I think about it, the less the logic seems to hold up.
Loblaw is essentially asking customers to accept less for less. The new No Name store will offer:
1,300 No Name products (compared to over 2,900 in the full No Name line)
Shorter operating hours (10 am to 7 pm)
No dairy or fresh meat products
Fewer weekly deliveries, increasing the potential for stockouts
As Per Bank, President and CEO of Loblaw, stated in the news release: "Our goal is simple – providing food and essential household items across a limited range of national brands and no name brand products at our lowest possible price."
While the intent sounds commendable, I can't help but wonder if there isn’t a simpler solution. Why not just lower the prices of No Name products already sold in their many existing stores?
Canadians already visit about two grocery stores during their weekly shopping trips. Is Loblaw expecting customers to make an extra stop just for a limited selection of products they can already find in other Loblaw-owned stores? Asking customers to bypass the No Name products during their usual shopping trip, only to make a separate trip to pick up the exact same items elsewhere, seems redundant.
This approach could also create competition between their own discount stores, like No Frills, and the new standalone No Name stores, both targeting the same budget-conscious consumers.
What would make the extra trip worthwhile? Perhaps if customers could replace all their weekly groceries with No Name products, it might have appeal. Or, if Loblaw offered exclusive No Name products only available at the new stores, it could provide the differentiation needed to justify the additional stop.
I also hope that Loblaw has done its homework to see if the No Name brand can stand alone without the brand equity it usually borrows from being a low-cost option within a store offering a broader range, such as Superstore or Shoppers Drug Mart.
Given the potential risks and challenges, strengthening the No Name brand within existing stores (perhaps through a "store within a store" model) might have been a more strategic move. Only time will tell if this new venture pays off.
https://www.newswire.ca/news-releases/big-savings-loblaw-pilots-new-no-name-r-store-to-bring-more-value-to-customers-802947443.html