Loblaws at one year

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When Church Street business owner Tony Cerminara first heard that Loblaws was opening a store at the iconic Maple Leaf Gardens, fear set in.

A co-owner of Pusateri Fruit Market, he feared customers would abandon his fruit and vegetable store, itself a neighbourhood institution, and head south. Along with suffering losses, Cerminara, like several other business owners in the Church-Wellesley area, feared the worst: going out of business.

Loblaws recently celebrated the one-year mark since the grand opening of its super-store on Nov 30. While some local businesses have been left unscathed since Loblaws opened, Cerminara and his partner, Frank Mangione, are struggling and continue to fear for the worst.

“It’s beyond scared,” Cerminara says, noting some months are worse than others. “We’re not going to start disclosing figures, but we’re down significantly versus prior years. Our business is down right across the board, in terms of customer traffic and the size of their purchases.”

Liz Devine, co-chair of the Church Wellesley Village Business Improvement Area, says Pusateri is not the only area business that has struggled.

“We have seen several businesses on our strip that have closed in the last year. I think there have been four or five businesses that have closed,” Devine says, adding that Reither’s Fine Food International, which was a mainstay on Church Street for 23 years, closed in March.

(There was no public statement from Reither’s. At the time the store closed, the owner, Peter Reither, posted a sign on the door saying he had decided to retire.)

And Devine says some small, fast-food-type businesses set up shop, only to close down not long after. Along with the closings, she says several of the BIA’s members talk about a decline in business.

The Loblaws superstore that lights up the northwest corner of Church and Carlton streets opened Nov 30, 2011. Hundreds lined up that morning to check out what the company calls “Toronto’s new crown jewel of food stores.”

Taking up 85,000 square feet on the lower level, the location has more than two dozen spacious aisles lined with dry goods, along with a large fresh produce section. Among its offerings are a patisserie, a deli department, a bakery, a fishmonger, a butcher, a tea emporium with tea experts, cheese specialists, a sushi bar and a kitchen with more than 10 in-house chefs preparing meals to order. Much talked about is the 18-foot-high wall of cheese.

Loblaws also provides a walk-in clinic, a pharmacy and a 50-foot wall of vitamins and supplements. Along with the Loblaws superstore, the Gardens is home to a Joe Fresh retail outlet, a cooking school, an LCBO and Ryerson University’s Mattamy Athletic Centre. Despite several requests, Loblaws declined to comment for this article.

While the retail complex creates new competition for a number of local businesses, Devine, like Pusateri’s Cerminara, is careful not to point the finger solely at Loblaws for all of the neighbourhood’s business misfortunes.

“Some of that may be the natural business cycle. We are in a very difficult economy right now. I would say that the word on the street is certainly that businesses are struggling,” Devine, who owns Rainbow High Travel on Church Street, says.

To become more competitive, Devine says some local businesses have changed their operating practices.

Pusateri is one of them.

Last January, for example, the store began opening on Sundays for the first time in its 46 years on Church Street.

Cerminara says Sunday shopping has attracted new customers. And he says this “significant change” has helped customers in terms of convenience because it allows them to shop seven days a week. But, it has had little benefit for Cerminara and his partner, he says.

“I’m working seven days a week now versus six. So there’s no benefit for us as owners,” he says. “I mean, we have to bring in staff. We have to turn on our lights. I would say the benefits in terms of a business owner are minimal.”

Cerminara says another measure has been to beef up the menu of The Garage Sandwich Co, which is in the back of the store. Now that they’re offering more than sandwiches, soups and salads, he says, people are dropping by to pick up their dinners. “It’s doing really well for us,” Cerminara says.

Tinkering with operating practices not only prevented some area businesses from suffering negative impacts after Loblaws opened, it even helped them fare better this past year over previous years.

Zahid Somani, a pharmacist and owner of The Village Pharmacy, says he also had concerns when he first heard Loblaws was opening a pharmacy at the Gardens.

“Would my clients stay with me? Would I stop growing as a business?” Somani says he wondered. “I also had concerns about Church Street in general, and how [Loblaws] would impact the retailers on the street.”

The Village Pharmacy has been on Church Street since 2004, and Somani says his clientele is largely long-time customers.

To gird himself for the new competition, he beefed up the store’s advertising budget. He continued advertising online, and once Loblaws opened its doors, he bought ad space inside the subway station. Aside from that, Somani says, he just decided to wait it out and see what would happen.

After waiting it out for one year, Somani says, “I think (Loblaws) had a negative impact on the street, but not for my business in particular. They’re corporate, so they can’t provide the personal service that a small retailer can.”

He says his long-time clients are still getting him to fill prescriptions. In fact, he says, despite the new competition, business has increased due to his subway advertising.

“I’ve had quite a few new clients from that,” Somani says.

A few doors south of The Village Pharmacy is Kawa Sushi, a cozy sushi bar with a handful of tables that has been serving Japanese cuisine on the strip for more than two years. Loblaws delivered a competitive threat to Kawa with its own sushi bar. Amid Loblaws’ bright, airy food hall, customers can choose dishes from a 16-foot self-serve display. Or, they can order their meals and watch as the chefs prepare them.

Dian Wang Jiang, Kawa Sushi’s president and chief chef, says his sushi bar hasn’t experienced any negative impact over the past year. Quite the opposite, actually.

“For us, the business is getting better than the last year,” Jiang says.

He says that he was aware Loblaws was moving into the neighbourhood before he even opened his restaurant and that he felt it would have a positive impact. He says he figured the superstore would attract more people to the area.

Jiang says he’s seen many of his customers shop at Loblaws and then order sushi from his sushi bar.

This past year the BIA has been carrying out a strategic planning process in order to help struggling local businesses. Out of that came a “shop local” marketing initiative. Phase 1 began last summer with signage, flags, shopping bags and other take-aways.

The BIA has hired a branding company to work on the second phase, which kicks off in January.

“There are over 100 businesses that are part of our business association,” Devine says. “And one of the things that we want to do is to be able to tell everyone who lives and works and plays in the neighbourhood that we are much more than the bars and restaurants, that we are, in fact, a village full of businesses.

“Because the residential neighbourhood has grown so much, many people who are coming into the neighbourhood may not be aware of the diversity of the businesses that exist there. And that’s going to be one of the key messages of the new campaign.”

The BIA will discuss the second phase at its annual general meeting Dec 10.

While Loblaws is located in another business improvement area, Devine says the Church Wellesley Village BIA has reached out to the company in the hopes that the two can team up on some community initiatives. “We have had some preliminary discussions with some of the marketing folks at Loblaws around how we might work together. We haven’t had a formal meeting yet, though,” she says.

Meanwhile, Cerminara says he fears the worst is still to come.

“I wouldn’t say it’s over. Whether it’s Loblaws or whether it’s just the softness in the economy, I’m not sure we’ve hit rock bottom yet,” he says.

And, despite Pusateri’s nearly five-decade-long existence on Church Street, the possibility that Cerminara and his partner may eventually have to close shop is never far from his mind.

“That thought crosses our mind on a daily basis.”