Share:

10 questions for CFIG’s Dave Powell

CFIG's chair on consolidation, growing his business and his 'one that got away'

powell-cfig-web

Today, at 59, Dave Powell is president and CEO of the Powell Group of Companies. Based in Bay Roberts, N.L., the company has grown to include three Powell’s supermarkets, a plaza, a number of rented units and a wholesale company, Atlantic Grocery Distributors, which supplies some 800 retail accounts and 1,200 foodservice accounts. Powell was born into the grocery business when his father opened a small store, in Bay Roberts, in 1956. “I did everything you do in a supermarket,” he says. “I stocked shelves, acted as a bag boy, received trucks, culled produce, cut meat–anything that needed to be done.”

In October, Powell took over as chair of the Canadian Federation of Independent Grocers. In an interview with Canadian Grocer, Powell talks about how he grew his business, the big issues facing independent grocers today and how he nearly cornered the Tim Hortons market in Newfoundland.

WHEN DID YOU GET INTO THE GROCERY BUSINESS?

When I was 10, I worked in the produce department in my father’s store. After that I did just about everything else. Even when I was at university I was expected to be back in the store from Friday evening to Sunday night. That was the way I earned pocket money for the following week at Memorial University.

HOW DID POWELL’S SUPERMARKETS GET STARTED?
My father, who was extremely entrepreneurial, bought a small store in Carbonear, N.L., in 1948. In 1956, he had a chance to get a bankrupt store in Bay Roberts, N.L., and we moved there. I was one year old. We’ve been in business in Bay Roberts ever since. He also owned three fish plants, was a part- owner of several others and owned a furniture and floorcovering business. In 1985, we had the opportunity to buy a former Dominion store in Carbonear and in 1989 we bought a smaller store in Harbour Grace, N.L. That gave us the three stores we have today: Bay Roberts, Carbonear and Harbour Grace.

WHEN DID YOU GET INTO WHOLESALING?
I had been working in the furniture and floorcovering store for about seven years when we decided to concentrate on the grocery side of the business. But we were forced to buy from our competitors. I very quickly saw the writing on the wall. I wanted freshness, quality and good prices. We wanted to drive volume. So we approached five small wholesalers with the idea of a merger. A year later, one by one, they offered to sell out to us. We then built a new distribution centre so we could be our own wholesaler as well as servicing a growing number of independent stores. After the cod moratorium [in the 1990s] shut down the fishery, which affected many of our smaller accounts, we decided to get into foodservice.

WHAT IS THE BEST PIECE OF ADVICE YOU’VE EVER GOTTEN?
The best piece of advice was from my father, who grew up in the Depression. He had a Grade 3 education, so he was not very book smart, but very street smart. He once told me that in business, you continually have to march ahead. Never stop, because if you do, the guy coming up behind you is going to trample you. So in other words, continue to grow; continue to look for new opportunities and new ideas, because once you stop doing that, you’re dead meat.

HOW IS BUSINESS FOR YOU TODAY?
We’re doing well, thank you. Our larger stores have a full range of products, from deli and bakery to produce, dairy and floral. Our prices are very competitive, even though we’re up against Loblaw, Sobeys, Walmart and Costco. Our employees have an excellent benefits package and show a great deal of team spirit, organizing ball tournaments, barbecues and the like. We try to maintain a friendly culture. We offer what our customers want, including traditional Newfoundland fare. We now have some 800 retail customers including some Valufoods stores we picked up from Co-op Atlantic, and around 1,200 foodservice customers including hospitals, restaurants, the Canadian Coast Guard, the ships of Marine Atlantic and Fisheries and Oceans Canada. We also own quite a bit of land and a plaza.

WHAT’S IN THE PLAZA?
We own the plaza where one of our stores is located, and we have a number of rental units, ranging from doctor’s offices to nail salons. Over the years we had some excess cash and bought quite a bit of land. Just now we have one unit temporarily rented by Elections Canada for the upcoming federal election. It’s just another aspect of our business.

WHAT ARE SOME OF THE ISSUES YOU SEE IMPACTING CFIG AND THE INDUSTRY TODAY?
It was a sad day in Canadian retail when Co-op Atlantic declared bankruptcy. [The Moncton, N.B., company went into bankruptcy protection in June. It was the largest independent wholesaler in Atlantic Canada. Without strong independents, customers can be hurt with the loss of competition.

The biggest challenge for the industry today is consolidation, which gives the bigger players a greater controlling share of the market. That reduces independents in the eyes of suppliers. Another issue impacting us is the matter of credit card fees. I’ve heard

of some retailers whose card fees have reached as high as 1% of total revenue. Ridiculous! Other countries have got their fees down to 0.5% per transaction. Why can’t we? Consolidation and credit card fees are foremost on CFIG’s agenda as I take over the chairmanship.

WHAT ARE SOME OF THE GROCERY RETAILERS YOU MOST ADMIRE?
Without question: Longo’s [in Toronto] and Quality Foods [on Vancouver Island]. Both are absolutely tremendous retailers with superb stores, terrific customer relations and great selection.

WHAT WAS THE DUMBEST THING YOU EVER DID?
I turned down an opportunity in the mid ’80s to acquire the Tim Hortons franchise for eastern Newfoundland. A lady had the franchise and a small number of stores, and she wanted to sell. My lawyer called me to encourage me to buy her out. I said I didn’t think Tim Hortons was going anywhere in Newfoundland. I can’t see Newfoundlanders sitting with a coffee and eating donuts, so don’t bother me again. Well, today there are probably 85 stores in Newfoundland. Obviously I was very wrong.

Share: