Loblaw has announced Windsor has been selected as a site for a new ultra-discount grocery store pilot project.
Based on the Loblaw No Name brand, three stores will open in September in Windsor, St. Catharines, and Brockville.
The stores will feature a significantly pared-down product selection, with no refrigerated foods like dairy or fresh meat.
The company has been betting big on discount stores as shoppers continue to seek out lower prices to combat the effects of inflation.
Dr. Sylvain Charlebois, Professor and Senior Director of the Agri-Food Analytics Lab at Dalhousie University, told AM800's The Morning Drive that he thinks the game here is to go where rents are lower.
"I think Windsor is a good place to start. They're also opening in St. Catharines and Brockville as well. So that shows you how they're trying to deploy this strategy, aiming at markets where real estate is not as expensive as, say, Vancouver, Toronto, or Montreal," he says.
Loblaw owns several brands, including SuperStore, Zehrs, Loblaw, Shopper's Drug Mart, and No Frills.
Charlebois thinks it's an interesting concept given the number of brands Loblaw already owns.
"I think they're just after the people who've gone to Giant Tiger and Dollarama," he says.
Charlebois says that Loblaw is very effective with its private label strategy, No Name and President's Choice is really something no one else has.
"These stores will carry, yes, No Name-branded products, but they will also carry President Choice products as well. President's Choice is one of the most well-known brands in Canada," he says.
By cutting costs on product selection, marketing, and other things, Loblaw says the stores will have prices up to 20 percent lower than nearby discount competitors, including its own No Frills stores.
President and CEO Per Bank says if the pilot works, the company will accelerate it, and if it doesn't, it will pivot and learn from the experience.
The Windsor location will open Sept. 5 at 1555 Talbot Rd., Unit 650-660, within the Windsor Crossing Premium Outlet property.