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Asian grocery chain

A dynasty built on instinct Add to ...

It was worse than the usual shopping slog. The bracing rain of a Vancouver winter, the cramped stores of Chinatown, and three young children in tow - including a five-year-old nephew who had to go to the bathroom, bad.

As Cindy Lee moved from one small store to the next to gather her family's groceries, the grind was all too familiar. Scarce parking, no washrooms.

Then, unable to hold it in, the nephew wet his pants. The shopping was abandoned and Ms. Lee took her troupe home, but the seed was planted for what would become T&T Supermarket Inc., today Canada's No. 1 Asian grocery chain.

T&T was started in 1993 by Ms. Lee and her husband, Jack, a real estate developer and food importer, backed by capital from a supplier in Taiwan and an Asian grocer in California. From the outset, T&T set out to blend East and West: shelves stocked with Chinese and Asian goods, presented like a Safeway or a Loblaw store, with bright, wide aisles. And bathrooms for customers.

"I just felt so bad. That memory really gave me a feeling we should give the customer a more pleasant shopping environment," says Ms. Lee, the 58-year-old president of T&T, which was bought this summer by Loblaw Cos. Ltd. for $225-million.

Ms. Lee will play a pivotal role in the strategy of Canada's biggest grocer to seize growth in a market where it has a position but is far from first.

T&T was built on instinct. Ms. Lee handled the books for her husband's business but had no management experience or experience in the grocery industry. But she did know what it was like to haul around kids while doing the shopping, so Jack put her in charge of the new venture.

"Our family laughs about it now," says daughter Tina Lee, T&T's director of strategy and operations and Ms. Lee's heir apparent. "It was brave and naive at the same time."

After a hard first year, and a brush with bankruptcy, T&T began a steady rise to dominance in the Chinese and Asian market. It has a devoted following, a half-billion dollars in annual sales and 17 stores - eight in and around Vancouver, two in Calgary, two in Edmonton and five in the Toronto region.

The so-called ethnic food market, encompassing a sprawl of cultures, accounts for about 10 per cent of the Canadian grocery market (which is worth nearly $80-billion annually). T&T has outmuscled its larger competitors, especially for Chinese-Canadian customers. It dominates in Vancouver, far ahead of No. 2 Real Canadian Superstore, owned by Loblaw. In Toronto, Loblaw's No Frills chain has only a slight lead on T&T, according to Solutions Research Group.

It was this success that drew Weston-controlled Loblaw to T&T and the Lees. More than just another business deal, it is a coming together of two immigrant tales, a story of Canada yesterday and today.



[The start]was really terrible. By mistake, I opened two supermarkets at the same time. Cindy Lee


The Weston family is now the country's second-richest family, but its food fortune was born humbly in the 1870s when patriarch George Weston, son of a Cockney immigrant, was a baker's boy and sold goods door to door.

Cindy Lee was one of eight children, born in Taiwan to a successful family led by her entrepreneur father, who left revolutionary China in 1948. She studied accounting at university and moved to Canada in 1976. Arriving with little English (and a serious hearing loss that was eventually repaired), her first job was in bookkeeping for $5 an hour. Jack arrived soon after; they married in 1978 and have three children.

Jack Lee had been in the food business since the start of university in Taiwan, where he sold instant noodles to students in residences, booting around on his bicycle during typhoon season. On one such foray, he met his future wife.

In Canada, he worked initially as a food importer and expanded to real estate. He took on his biggest development project in the late 1980s: President Plaza in the growing Vancouver suburb of Richmond, which has a large Asian population.

The Lees wanted a large supermarket to anchor the development but there wasn't an obvious tenant, so the couple decided to start their own. Uni-President, Taiwan's largest food producer, for which Mr. Lee was the wholesale agent in Canada, put up the bulk of the capital.

Along with the Richmond location, the Lees opened a T&T at a mall in Burnaby, another multicultural Vancouver suburb. "[The start]was really terrible. By mistake, I opened two supermarkets at the same time," Ms. Lee remembers.

At 40,000 square feet, the Burnaby store was five times the size of an average Chinese supermarket, and more like a Loblaw or Safeway - and part of her plan to bring together the best of East and West.



T&T convinces people, after you walk out, you feel you've gotten more than what you paid. Ron Chang, president of Regal Communication Group


T&T struggled with basics, from tracking inventory to keeping produce fresh, either drenched with mist or frozen from too much refrigeration. A year in, with only six months of capital left, the stress tearing Ms. Lee apart, she sought advice from her father back in Taiwan. He advised her to present a composed front to stave off potentially fretful suppliers and told her to hire experienced help - fast.

It worked. Details were tended to and the customers kept coming. Along the way, Ms. Lee devoured ideas and information. She raced through Chinese translations of tomes from American titans such as Sam Walton's Made in America. On a trip to Taiwan, when she saw kiosks selling sushi to commuters, she copied the idea.

Underpinning T&T's rise and dedicated customer base is brand loyalty. The Loblaw purchase sparked a kind of panic among T&T devotees, but the chain remains its own banner under the Loblaw umbrella and Ms. Lee stays at the helm, something Loblaw insisted on. It didn't want the shell, it wanted the people who make it work.

"T&T built the brand," says Ron Chang, president of Regal Communication Group, an Asian marketing consultancy. "They just finished a Japanese food festival. They've been selling Japanese merchandise for years but put up a nice display, Japanese decorations. It's simple and it works. It gives the customers another reason to visit the store. T&T convinces people, after you walk out, you feel you've gotten more than what you paid."

While looking much like a mainstream supermarket, T&T is a bigger version of all the amazing tiny Asian grocers, a specialist in cheap, fresh produce and fish. At one counter, marinated pig ear is on special ($5.50 a box). In produce, there's fire dragon fruit from Vietnam and red rambutan fruit from Thailand.

And the stores are stocked with fresh takeaway, dim sum, sandwiches and sushi.

"It's very simple," says Ms. Lee, describing her gut-instinct choices of what to sell: "Be the customer. Feel that you are the customer. Then you'll find out easily."

The T&T-Loblaw link began in 2008, when Joe Burnett, reclusive Toronto billionaire and chairman of real estate developer and produce distributor Burnac Corp., visited a T&T. He was awed by what he found. Burnac was a supplier to T&T, as well as Loblaw, and Mr. Burnett soon met with Ms. Lee in Vancouver. He was further impressed and she latched on to his industry smarts.

Mr. Burnett gave advice: He saw the majority ownership of T&T by two foreign firms as "somewhat of a shambles." But the busy aisles of the store in downtown Toronto stuck with him. It clearly drew customers from beyond the couple of kilometres typical for the industry. "It's a destination," Mr. Burnett says. "She could have 25 stores."

An introduction to Loblaw followed, beginning the year-long negotiations that ended in the July sale of T&T. The roots of family, for both grocers, were an important connection as talks progressed.

"As big as the Westons are, they are family. It was appealing. And they respected that in us, too," Tina Lee says.

The deal is set to close later this year and T&T is poised to grow. Store No. 18 in Ottawa opens shortly.

"With Loblaw's help, we hope to open as many stores as possible," Cindy Lee says. "Wherever there is an Asian population, we'd like to open a store."

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