NWC to expand three Nunavut stores, despite lower earnings

A view of the produce section at the Iqaluit Northmart store. The North West Co. showed “disappointing” results from its Canadian operations in the second quarter of 2014, NWC’s president and CEO, Edward Kennedy, said Sept. 11. (FILE PHOTO)

Residents of three Nunavut communities will do their shopping inside expanded, spiffed up Northern stores by next summer, the North West Co. announced Sept. 15.

The Winnipeg-based international retailer said it’s spending $11 million to add retail and warehouse space to Northern outlets in Clyde River, Hall Beach and Pond Inlet.

The revamps include:

• a new 4,600-square-foot retail and grocery store in Hall Beach, where they will convert the existing Northern store building for use as warehouse space;

• a 3,900-square-foot expansion of the Northern store in Pond Inlet, which will total 8,400 square feet after the work is done; and,

• remodeling of the Northern store in Clyde River, which will total 6,100 square feet, with an expanded grocery section and more general merchandise products.

Each of the three stores will include dedicated space for staff training, as part of NWC’s efforts to hire more local residents. Right now, the three stores employ a combined total of 45 workers.

The NWC operates chains of retail stores in isolated, rural and low-income underserved communities throughout northern and western Canada, rural Alaska, islands in the South Pacific, and small island states in the Caribbean.

They market themselves in these regions under various banners, including Northern, Northmart, Cost-U-Less, Giant Tiger and AC Value Center.

In the company’s second quarter financial results, released this past Sept. 11 from Bridgetown, Barbados, NWC reported that lower earnings from its Canadian operations led to reduced profits compared with last year.

For the three-month period ending July 31, 2014, the company’s earnings from operations fell by six per cent, from $28 million over the same period last year to $26.3 million in this year’s second quarter.

They attribute this to increased operating and administrative expenses, a higher U.S. dollar, lower gross profit rates and the absence this year of one-time insurance gain they benefitted from last year.

“While international performance met expectations, our Canadian results were disappointing and reflect a more challenging competitive and consumer environment,” the company’s president and CEO, Edward Kennedy, said in a news release.

As of the morning of Sept. 15, NWC’s share price on the Toronto Stock Exchange had fallen to $23.50, down from the $25 price its stock fetched Sept. 2.

Across northern Canada, where the company operates in three territories and the northern regions of several provinces, NWC’s Northern and Northmart divisions employ about 3,100 people.

In Nunavut, about 500 local residents work at NWC outlets.

In related news, the Baker Lake Northern Store is set to offer customers a new lottery terminal this fall which will sell lottery tickets such as Lotto 6-49 and Lotto Max.

Kyle Seeley, the Government of Nunavut’s Director of Sport and Recreation, said earlier this year that service, still managed by the Northwest Territories Sport and Recreation Council, is offered under the larger umbrella of the Western Canada Lottery Corporation.

The GN may offer more lottery terminals to other stores in future, Seeley said.