Retailer is a successful business story that generated $18-billion of income for Canadians in 2021
Not many companies in Canada make it to their 100th anniversary – and even fewer do so with the respected reputation and quantifiable community impact of Canadian Tire.
“There are so many moving parts when analyzing the company’s 100-year history, which is an increasingly rare example of a successful Canadian business story,” says Philip Cross, senior fellow at the Fraser Institute, a public policy think-tank.
Cross independently reviewed Public First’s Canadian Tire Corporation Economic Impact Report, which analyzes Canadian Tire Corporation (CTC) and its Associate Dealers. CTC commissioned the report from Public First, a global strategic consultancy, to mark its centenary and explore and quantify the company’s impact on Canadian consumers, businesses, workers and communities. Data in the report was sourced by polling individuals across Canada, CTC financial statements and disclosures, and other information supplied by the corporation and its Associate Dealers.
Cross spent 36 years at Statistics Canada, the last few years as its chief economic analyst. “I’ve expressed a lot of concern in my work on the Canadian business community about the decline in innovation, and [the decline] of Canada’s business presence on the world stage,” says Cross, who wrote the foreword to the report. “We’ve seen so many iconic Canadian firms falter over the past decade. So it was a pleasure to be part of a story that highlights how Canadians can innovate and succeed.”
Cross referenced major Canadian businesses that have faltered or gone out of business entirely, such as Nortel Networks Corporation, Eaton’s and Bombardier Inc., noting that Canadian Tire, on the other hand has flourished, consistently positioned at the forefront of the country’s retail industry, even amid the arrival of U.S.-based retail giants such as Walmart Inc., Home Depot and Target Corporation.
According to the findings of the Economic Impact Report, an estimated $150-billion in economic impact over the past decade has been generated by Canadian Tire Corporation and its Associate Dealers.
Today, more than 500 stores across Canada are run by a network of independent entrepreneurs known as Associate Dealers, who are responsible for creating a retail plan, hiring staff and building a business with products that meet the needs of the communities they serve. This has resulted in a significant number of Canadians finding employment; the report estimates that 1.8 million Canadians have worked at a Canadian Tire, a SportChek or a Mark’s store (both of which are part of the CTC Group of Companies) in the past.
And Canadian Tire stores are a hub of support for other entrepreneurs and small- to medium-sized businesses. Approximately 58 per cent of Canadian Tire store customers surveyed say that they regularly shop at another business while visiting a Canadian Tire store. In total, CTC supports more than 4,000 Canadian businesses across the country. And, for every $1 in profit earned by CTC in 2021, an estimated $14 was generated for other businesses and workers across the Canadian economy.
What really stood out for Cross was the $18-billion in gross value added (GVA) in 2021, which is equivalent to approximately one per cent of gross domestic product.
“That’s significant,” he says. “Basically, it says Canadian Tire generates $18-billion of income for Canadians. To give you an appreciation of how much that is, that’s more than all of the arts, entertainment and recreation industry in this country, which is $14-billion. It’s about the same as all the crops this country produces: $17.7-billion. Auto assemblies, including parts in this country, generate $12.5-billion of income. For one company to drive that is impressive and shows just how much Canadian Tire has worked itself into the Canadian economy.”
The numbers are one way to measure the retailer’s impact. But the report also highlights the deep connection between Canadians and Canadian Tire.
From its humble beginnings in 1922 – when two young Toronto brothers, J.W. and A.J. Billes, launched their own business in car parking – Canadian Tire is one of Canada’s most beloved companies. With more than 500 retail locations nationwide, it remains the go-to destination for Canadians who are preparing for a trip outdoors, looking for new sports equipment, needing to service their car or taking on a home renovation project.
In the report’s customer testimonials, people talked about how their father bought their first bike using Canadian Tire money, or the time they got their first pair of skates, or how their local Canadian Tire is the place to find uniquely Canadian gifts for friends and family.
“I mean, obviously, being a statistician, the numbers strike me first,” Cross says. “But just as important in reading the testimonials is how much Canadian Tire has become an integral part of the fabric of Canadian life. And that’s something that you really can’t capture in numbers … just the way people identify with it as a symbol of Canada. There’s not a lot of business symbols in this country that are symbolic of Canada.”
In the report, 54 per cent of Canadians surveyed agree there is no store quite like Canadian Tire. And when people were asked which stores listed in the survey they would miss if they moved away from Canada, almost half (47 per cent) chose Canadian Tire stores.
Sixty-eight per cent say they are proud of Canadian Tire as a Canadian company. Consumers see it as one of the last remaining truly Canadian companies, a company committed to stocking its shelves with Canadian-made or -designed products, scoring high under words or statements such as “trustworthy” and “care about Canadians.”
“I mean, that’s getting under people’s fingernails,” Cross says. “That’s really connecting with people on an individual and local level.”
CTC’s commitment to responsible retailing, in particular its connection to supporting amateur sports, is a big factor in that. Hockey is Canada’s national game, and Canadian Tire is the largest hockey retailer in Canada. But sports are equally fundamental to the company’s community outreach.
In 2021, CTC and its Associate Dealers helped generate $36.7-million in charitable donations for Canadian Tire Jumpstart Charities (Jumpstart), which is dedicated to helping kids overcome barriers to accessing sport and recreation.
In the report’s polling, more than 2.5 million Canadians say that they know someone who has benefitted from Jumpstart, which has raised more than $200-million in funds since 2005.
In providing equal and inclusive access to local sports, helping communities grow and thrive, and helping children become more active, healthy and confident, the charity has contributed to the positive view Canadians have of the company.
“Being ‘Canadian’ is nice, but it isn’t enough,” Cross says. “People are not going to buy your products just because you’re Canadian. You can’t just plant a flag out front and say, this is going to make us a successful retailer.
“Canadians also want value for their money. They’re going to want you to back up the products that you sell and they’re going to want it at that competitive price. And you have to deliver on all those fronts.”
According to the report, it is estimated that Canadian Tire stores in total create $14.6-billion in consumer surplus – a measure used by economists that looks at what consumers would have been willing to pay for a product and still felt that they were getting their money’s worth.
“Canadians feel that what they are buying from Canadian Tire is giving them value almost twice as much as what they’re paying,” Cross says. “That’s value for money. That’s more than getting your money’s worth. And it’s because of that large consumer surplus that there’s this feeling that, yes, I got a real bargain, and I got more than I paid for. That’s why people go back. That’s the basis of successful retailing.”
Advertising feature produced by Globe Content Studio and Canadian Tire Corporation. The Globe’s editorial department was not involved.