TORONTO-Canadian Tire Corp. Ltd. (CTC) has embarked on a $900 million store expansion and refurbishing project that-at least initially-is gobbling up customers, market share and sales. The already dominant Canadian automotive, housewares and sports and leisure products retailer has re-opened 16 of the 240 existing stores it intends on rebuilding or expanding by the end of 1998. The company currently has 423 stores.
Though still in an early stage of the program, initial consumer response to the changes is almost astonishing: Customer counts are up 30 percent while sales have soared 60 percent at the remodeled outlets, according to Allan Goddard, vice president of corporate affairs.
``Our early experience has been extremely satisfying,'' said Mr. Goddard, noting none of the stores are in new markets. ``We really feel we're on the right track.''
The program began last fall with outlets in Hawkesbury and North Bay, Ontario, and Cowansville, Quebec.
The new outlet format basically doubles store sizes in three categories, depending on local market size. Small market stores will jump from about 6,000 square feet to about 27,000 square feet with a two- or three-fold increase in the number of service bays.
Medium market stores, which will be the most abundant of the three outlet designs, will increase store footage from about 25,000 to about 57,000. Service bay counts are likely to increase from 15 or 16 to about 18.
Stores in the largest markets could hike square footage to as high as 72,000, Mr. Goddard said.
Toronto-based CTC will demolish existing outlets and rebuild if the sites are large enough to accommodate bigger buildings, he said. Otherwise, the firm will relocate stores to larger land parcels within the same market areas.
Canadian Tire is devoting as much as 70 percent of the buildings to retail floor space, up from as little as 40 percent previously. Warehousing and storage space, as before, will fill the remainder.
The new format also allows for higher display stacks, wider aisle space and brighter lighting, Mr. Goddard said. ``The look and feel of the new stores is substantially different,'' he added.
``It's not a warehouse look. These stores are finished out like a retail store.''
The increase in overall store size and retail selling space enables Canadian Tire to display a larger number of products, according to Jack Dawkins, senior director of automotive parts marketing.
``Part of our strategy was to insure dominance of the auto parts selection,'' Mr. Dawkins said.
The total project is expected to cost about $1.2 billion in Canadian currency, about half of which will come from internal cash flow, Mr. Goddard said.
Some project funding has been diverted from the firm's investments in a failed attempt to enter the U.S. market with a 10-store Auto Source chain. Those outlets-which had been located in Indianapolis, Louisville, Ky., and Cincinnati, Columbus and Dayton, Ohio-were closed early this year.
CTC will open about 40 new stores by year's end and about 60 each in 1996, 1997 and 1998.
As much as 90 percent of the Canadian population lives within 15 minutes of Canadian Tire outlets, which market, among other products, national brands and its Motomaster private brand tire and automotive product lines.