Inside Markham’s grocery store wars

Share

Aside from the few shelves near the front that display maple syrup, maple nougat and maple-infused coffee, there's nothing particularly touristy about the T&T grocery store on Kennedy near Highway 7 in Markham. It sits in a newly developed area, adjacent to an expansive brick townhouse complex that brings in some foot traffic. Inside is a scene typical of any supermarket: shoppers steer carts around produce displays while hissing at their children not to wander away.

Yet as of this week, this T&T enjoys the privileges of other tourist destinations in the province such as the Eaton Centre, Distillery District and the Old Town of Markham core: it gets to open its doors to shoppers on statutory holidays.

Regional council in York voted Thursday in favour of exemptions to the Retail Business Holidays Act for three Asian grocery stores in Markham – two T&T locations and a Foody Mart. The vote sets a major precedent: while nearly all others to receive exemptions are traditional tourist draws, this is the first time standalone grocery stores have made the cut.

It's the latest stage in a heated battle in what retail geography expert Shuguang Wang is calling an oversaturated market. When council granted an exemption last year to a plaza at Kennedy and Denison anchored by Asian grocer Oriental Food Mart, Oriental's competitors were furious. But the path to a level playing field hasn't been pretty. In recent years, Oriental, T&T and Foody Mart have taken things to extreme levels, including one chain lobbying for endorsements to win the favour of politicians and another going as far as calling police on its competitors.

Fighting for a piece of the market

In York Region's largest city, the Chinese population has soared since the 1990s – it increased 323 per cent from 1991 to 2006, the last year for which data on ethnicity is available. As of that year, 36 per cent of the Markham's population identified as Chinese, and all signs point to its growth since then.

A study published this year in the International Journal of Applied Geospatial Research noted the size of the ethnic Chinese population in 2006 in Markham represented sales potential for food at $191-million.

While mainstream supermarket stalwarts such as Metro and Sobeys are competing for a share of this market, T&T, Foody Mart and Oriental Food Mart (which together have 16 stores in the GTA) now have an edge with their Retail Business Holidays Act exemptions.

They carry similar imported goods (though with much larger selections) as their small ethnic grocer counterparts, but they've copied the airy store layouts of mainstream supermarkets. Some have replaced mainstream grocers as the anchors of plazas.

B.C.-based T&T launched its first store in the GTA in 2002 in Vaughan, and has since opened seven other locations, mixing mainstream-style shopping with an on-site bakery and food court-style eating area. But it didn't have much time to enjoy this unique position: It soon inspired imitators. And, seeing a chance to increase its market share and access new supply chains, Loblaw acquired T&T in 2009.

In his study on trends in Chinese retailing in the GTA, Shuguang Wang, a geography professor at Ryerson University, largely credits T&T for the "flourishing and modernization of the Chinese supermarket sector" in Canada.

It's also opened the door to cutthroat competition.

"Unfair competition"

Though he won't name names, James Wong, T&T's associate director of supporting services, says his competitors play dirty. He said they often force employees to work long hours without overtime pay in an attempt to raise their profit margins.

"All those kinds of under-the-table practices created unfair competition," he said.

A few years ago, he grew irritated at every statutory holiday when doors were closed at each of his company's locations, but his top competitors flouted provincial law and stayed open. So he called police to tip them off.

Since 2009, Foody Mart has been charged seven times by police for opening on statutory holidays and courts have ordered it to pay $17,535 in fines, according to records in York Region. Oriental Food Mart has been charged six times and has been ordered to pay $15,030.

Daily sales may make up for fines these grocers must pay, but some caught on to a way around the law: applying for an exemption. In its attempt to come out on top in the region, Foody Mart has tried to win the favour of organizations in the city whose support might not necessarily turn into sales, but could help them navigate political waters.

The Federation of Chinese Canadians in Markham, the Cross-Cultural Community Services Association and the Markham Federation of Filipino Canadians all submitted letters of support for Foody Mart's application to stay open on statutory holidays to the Region of York.

In the week before the council vote, representatives from Foody Mart met with councillor Joe Li in a bid to have him vote in their favour, understanding the importance of winning the favour of the only Chinese member of regional council.

"Any one who takes my word for granted, I'm not saying I'm going to teach them a lesson, but I don't see any reason why I have to support them," Mr. Li said.

After its third try at getting an exemption to the Retail Business Holidays Act, Oriental Food Mart finally found success last year – but not before its competitors tried to derail its efforts.

In May 2012, Mr. Wong sent a letter to the planning and economic development committee in York that raised concerns about Oriental's qualifications, namely that it relied on tourists from Pacific Mall to stay competitive.

After Oriental's application succeeded, T&T's executive director, Tina Lee, sent a letter to Markham's deputy mayor saying the decision gave Oriental an unfair advantage. She pegged the loss of five days of sales to Oriental on stat holidays at $500,000.

A few months later, T&T submitted its own application for an exemption at two of its stores.

"They're hypocrites," says Manoj Biswas, the vice-president of corporate affairs for Oriental Food Mart.

In early April, when the applications were being considered in York Region's planning and economic development committee, Mr. Biswas made a deputation against his competitors receiving an exemption. Not that he'll even refer to T&T and Foody Mart as competitors. "We as Oriental Foods don't think there is any other competitor for us," he said. "If they think we are competitors, it's their problem."

As Mr. Biswas sat in the middle of his store's food court, where shoppers chowed down on lunch-hour chow mein and barbecued duck, his bloodshot eyes widened in anger when he discussed T&T's and Foody Mart's applications. He dismissed the lengthy customer petitions they'd submitted to council, saying there was no way of knowing whether those signed were Markham residents or tourists.

"How can you give a tourist attraction [status] to an independent grocery store? It is so stupid," he added.

The exemption he won last year applies to his entire plaza, but the majority of customers are there to shop at Oriental, rather than the dimly lit suitcase shop or the Shoppers Drug Mart. He made the case that because tour buses that transport tourists to Pacific Mall routinely park in the plaza's lot, many of the store's customers are tourists. Foody Mart and the two T&Ts made similar cases about counting on traffic from nearby tourist areas. All four of the stores concerned meet the qualifications for an exemption by being within two kilometres of a tourist area (Pacific Mall, Market Village and Old Town of Markham in these cases).

Markham mayor Frank Scarpitti had voted against Oriental's application last year and did the same for both applications this week. Setting a precedent by giving exemptions to supermarkets is "very unfortunate," he said.

Before the vote, he told councillors, "If you don't exempt them from the statutory holidays, they'll still be very successful. You know why? Because they're not tourist attractions."

"I think we all know it's a bit of a game, frankly," said regional councillor John Taylor during a debate Thursday, referring to the ways the respective chains had hired lawyers and prepared lengthy submissions to explain the various they qualified for exemptions.

While he'd voted against granting exemptions in the past, he voted in favour of these. "The only goal left for me at this point is a level playing field," he said.