North West spending includes more fresh food

One of northern Canada’s largest retailers says it plans to make a big investment in its business.

Winnipeg-based North West Company, a department store and grocery chain, said it will spend $150 million over the next three years to expand stores and launch new products and services in the North.

North West operates 224 stores, mostly in the northern parts of provinces and in the territories under banners such as Northern, North Mart and Quick Stop. It also operates 31 Giant Tiger stores in Western Canada.

In a press release, North West president and CEO Edward Kennedy called his company’s spend “a major commitment to provide more value to northern shoppers.”

But he stopped short on specifics, and North West declined a request for an interview by Canadian Grocer.

The retailer has come under fire in recent years for the high prices that people living in the North must pay for food. In January, a group in Nunavut called Feeding My Family organized a one-day boycott of North West Company stores.

In its press release, North West said its just-announced investment includes money for the construction of a new warehouse that would allow the company to store more product over winter, thereby lessening the retailer’s reliance on “expensive air freight.”

The company did not say whether it plans to build any new stores. But it did say the $150 million includes installing more energy-efficient refrigeration and lighting in stores, plus initiatives to increase and improve fresh and prepared food department offerings.

“Our customers expect more convenience, more fresh food choices, more services and more job opportunities. Our stores of tomorrow will meet these expectations and beyond,” Kenney said in a statement.

Kennedy said the company's investment will sustain what he called a 25% increase in healthy food sales at North West Company stores in northern Canada since 2011.

Kennedy said that increase was partly the result of the federal government’s Nutrition North program, which subsidies the cost of fresh food to northern consumers. But he gave more credit to his company being “able to drive down freight costs and food waste and pass the savings on to northern consumers.”

Again, he did not provide specific examples of such initiatives.

Last fall, the Auditor General issued a report skeptical of the Nutrition North program. Michael Ferguson said the federal government has no idea whether northern retailers are passing the subsidy on to consumers.

In response, North West said that under Nutrition North it had passed on to customers $31.7 million in 2013.

North West said it had tracked 4,000 subsidized items since the launch of Nutrition North in April 2011 and found that prices dropped an average of eight per cent.

The company added that at Nutrition North-eligible North West stores, located in 67 communities, the volume of healthy food sold has gone up: 33 per cent for dairy, 26 per cent for meat, and 22 per cent for produce.

North West's $150 million investment will also be used to expand selection of children's and outdoor living items at its stores as well as allow the company to launch a range of new financial and health services. The investment is expected to create 125 permanent jobs.