Kevin Hatt spends his days twiddling his thumbs in Sandy’s Corner Store wondering where all the customers went.
Everything was going great just two years ago for the little Cree-owned convenience store that sits right on the shore of the mighty Great Whale River in Whapmagoostui.
Sandy’s had 22 employees, almost all Natives. Business was good enough that the store gave discounts to Elders, trappers and people on welfare, and had enough leftover to sponsor community events.
Then the vicious competition started and everything went horribly wrong. The huge Northern Store just down the road, once owned by the ancient Hudson’s Bay Co., wanted a bigger slice of the action.
The Northern Store, part of a vast chain of 160 outlets across Canada, was facing new competition of its own from even bigger U.S.-based chains like Wal-Mart which were aggressively marketing to the North.
Everyone suddenly recognized there’s money to be made from Native people. And it’s no different in Whapmagoostui.
A brutal price war erupted pitting Sandy’s against Northern. Today, food prices have plummeted 15 to 30 per cent. Customers benefitted, but after two years of going head-to-head with the corporate giant, Sandy’s is flat on its back and taking a 10-count.
Each and every time Sandy’s lowered its prices, Northern matched it and for good measure went a few cents cheaper. Each time Sandy’s offered a promotion or donation, Northern would do the same. With its deep pockets, how could Northern lose?
“This store used to be packed in the night-time. Now it’s like a ghost town,” said Hatt, who’s been manager of Sandy’s for
13 years and himself once worked for Northern. Sandy’s had to let go half its staff.
“It’s just a steady aggression. It’s no longer profitable to stay in business.”
Northern denies it wants to put Sandy’s in the morgue. It even denies there’s a price war. “It’s a case of maybe being a little bit of a cry-baby,” said Bill Moore, general manager of Northern’s Quebec operations.
Moore said Northern has lowered its prices because of competition from the local co-op and mail-order stores in Val d’Or.
“I wouldn’t classify it as a war. I would classify it as honest competition.”
“It’s a full-blown war”
Even in the cut-throat world of retailing, there are rules. Some of them are spelled outin the federal Competition Act, which outlines unfair business tactics.
For example, the Act says it’s illegal to sell products “at prices unreasonably low”simply to put your competitor out of business. It is also illegal for a chain to sellproducts cheaper in one store than in otherstores simply to eliminate competition. This is called predatory pricing and it’s especially wrong if done by a large company abusing its dominant market position.
One Northern manager scoffed when asked about the Competition Act: “I’m just wondering if you think competition is unfair.” But Hatt thinks he might have a case. To him, it’s obvious Northern has specifically targeted Sandy’s, copying every discount or promotion he dreams up to improve business.
If Sandy’s goes out of business, Hatt warns Whampagoostui residents the low prices won’t last as Northern jacks up prices to make up for lost income.
“I can relate with what he’s going through,” said Jack Quinn, manager of Mistissini’s Meechum Store, which won a price war against Northern a few years ago. “They’ll match you or go a cent under you.”
Quinn didn’t back down from the fight and Northern eventually packed its bags and left town. Quinn said one thing saved Meechum’s hide: “We wouldn’t be here today without the tremendous support in the community.”
This is one area where Sandy’s has been having a little trouble. Hatt is upset with the lack of support from the local Cree band, which he says hasn’t done much to help Sandy’s. He’s also heard some customers switched to Northern because they were jealous of owner Moses Sandy’s success.
But Hatt says there’s a bigger issue here: the community’s control over its own economy.”This store is something we built together, the whole community. It’s a fullblown war andwe can’t fight a war alone against Northern.”
