Wholesaler Northern Grocers to close shop

Paul Braaten was 41 when he and 10 partners pooled their money and bought Northern Grocers, an independent grocery wholesaler and commercial landmark in Prince Albert, Sask.

Now 65, he and the two remaining partners want to sell the business and retire.

Trouble is, they can't find a buyer for a business in a retail industry that continues to be rocked by consolidation. So instead, they've decided to liquidate existing inventories and put the key in the door.

"It's been a great run, but we've had enough," Braaten told Canadian Grocer earlier this week.

For the mayor of St. Albert, Saskatchewan's third-largest city, it will also be a blow to the city's standing as a major hub for the staging and shipping of supplies and services to northern Canada.

"Northern Grocers is very well known," said Greg Dionne. "It's a shame that no one has stepped up to buy the business."

According to Braaten, the business was profitable for a long time, with annual sales reaching $37 million.

The wholesaler sells some 6,000 items–everything from candy and tobacco to groceries and frozen food–to a network of more than 700 grocery stores, restaurants, hospitals and First Nations communities.

Braaten said a number of factors have hurt business in recent years, including increased freight costs, the spread of retail giants like Walmart and Costco, the decline of independent retailers, and the rise of franchise grocers.

He said sales fell to around $24 million last year. That, together with the fatigue from running a hands-on business for decades, helped the owners make their decision to close late last year.

Braaten said the company stopped ordering supplies in early February. About two-thirds of remaining inventory has been sold, and orders are brisk for the remaining stock.

Gary Sands, vice-president of the Canadian Federation of Independent Grocers, said that retail consolidation has resulted in the loss of many independent grocers and food processors.

"Now they have mostly franchise grocers chains that buy and ship nationally. It's a big challenge that government and industry needs to take a close look at."

But with more than $100 billion in grocery industry sales across Canada, Sands said opportunities still abound. "Wholesalers need to look for retailers go to trade shows," said Sands. "We need to work together to develop links that allow us to move merchandise."