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Giant Tiger opens new distribution facility

Company says centre will help it fill existing gaps in its grocery offering

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Giant Tiger’s new Eastern Ontario distribution centre will help facilitate the company’s ambitious growth strategy while increasing the number of grocery items available in its stores, says a senior executive.

Dave Burnside, executive vice-president and chief purchasing officer, grocery with Giant Tiger, says the new state-of-the-art facility will also help the family-owned company maintain its market position as a “low cost” operator.

The 600,0000-square-foot facility, located approximately 80 kilometres south of Ottawa, features Canada’s first Symbotic system comprised of 210 autonomous robotic units capable of moving up, down and across inventory at speeds of up to 40 kilometres per hour. According to Giant Tiger, these robot units boast a pick accuracy of 99.99%, and will further boost the company’s existing strength in short replenishment times for its stores.

giant-tiger-dc-media-event282Giant Tiger processes orders for an average of 100 stores a day, which it says can be received, picked, packed and shipped within 24 hours. The company claims that the distribution centre’s proximity to Highway 401 will also enable it to shave 860,000 kilometres per year off its transportation distance, resulting in more than $1 million in savings.

Burnside says Giant Tiger has been relying on three distribution centres, all of which have been operating at capacity. “We’ve been challenged with our existing facilities, so bringing everything into this one facility will really help stretch what the growth looks like,” says Burnside. “It’s really about addressing and accommodating those long-term growth plans.”

Ottawa-based Giant Tiger currently operates more than 245 stores, with a footprint in every province except B.C. and Newfoundland & Labrador. Its current five-year plan calls for 15 new stores a year.

ginat-tiger-dc-media-event003“We believe there’s quite a bit of white space for growth in Canada for this format,” says Burnside, who describes Giant Tiger’s model as a “super centre in a more customer-friendly footprint.”

Burnside describes the company as “very opportunistic,” with discussions about store openings taking place in every province. While the company has historically focused on smaller markets, Burnside says it is also enjoying success in urban and suburban locations.

Burnside says the new facility will also help Giant Tiger address “gaps” in its existing grocery offering. The store currently offers approximately 2,800 grocery SKUs, with Burnside saying the new facility will enable it to increase that number by as much as 10%.

“We’ve been limited by our physical stores–the average Giant Tiger store is between 16,000 and 20,000 square feet–but also by our warehouse capacity,” says Burnside. “We’re always looking for new vendors and new items.”

giant-valueGiant Tiger is in the midst of what Burnside describes as a “real transformation” in its grocery business, including the addition of refrigerated, frozen and produce. It also recently began testing a fresh meat offering in 45 stores.

“It’s a tough business to compete in, but we’re very much about test and learn,” says Burnside of the introduction of a meat offering. “At the same time, it’s really key for us that in that limited space, we’re [offering items at] the right price. It doesn’t make sense for us to list something that isn’t going to be competitively priced. We’ve found it as challenging as expected, but it’s been a good addition to the shopping experience.”

Giant Tiger also boasts a growing private label brand, which operates under the name Giant Value. Burnside estimates the size of the label at around 300 SKUs, covering categories including frozen, dairy and dry goods.

“We understand it’s an important part of our future, and we have a desire to drive that business as a way of differentiating our brand,” says Burnside.

Construction on the new distribution facility, which employs 300 full-time workers and boasts amenities including a gym, games room and outdoor patio overlooking the St. Lawrence River, began in April 2016.

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