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Giant Tiger CEO Paul Wood in Ottawa on Sept. 21, 2020.

Blair Gable/The Globe and Mail

Giant Tiger Stores Ltd. has named a new CEO at a time when economic uncertainty is creating even more competition in the discount retail sector – and upending people’s shopping habits.

Amid the fallout from the COVID-19 pandemic, shoppers are pinching their pennies. Cheap-chic retailer Target Corp. reported its best quarter ever last month in the United States. Canada led Walmart Inc.'s international markets in comparable sales growth in its most recent quarter. And demand for cleaning supplies has helped to boost sales for Montreal-based Dollarama Inc.

Giant Tiger is smaller than its competitors, but is looking to continue expanding its store footprint in Canada, said Paul Wood, who was appointed as CEO last week.

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“Discount has been an area where people gravitate when times are a little tougher economically, and where there have been some really exciting developments. It’s a much more competitive space,” Mr. Wood said in an interview. “ … We continue to believe there’s opportunity for us to be in more Canadian communities. But we also have to continue that build-out from the e-commerce perspective.”

Mr. Wood takes over from company founder Gordon Reid, who launched the chain 59 years ago in Ottawa’s ByWard Market neighbourhood. Giant Tiger now has 258 mostly franchised stores in Canada, and employs more than 10,000 people. The company says it had more than $2-billion in revenue last year.

After exploring a possible sale in 2013, the founder’s family decided it should remain privately held. The following year, Mr. Reid returned to the top job after CEO Andy Gross stepped down. Mr. Reid is now stepping away from management and handing his role as board chair to his son and former vice-chair Scott Reid, who is the Member of Parliament for the Lanark-Frontenac-Kingston riding in Ontario.

The company will have to continue its work to absorb 34 of the 46 stores it bought back earlier this year from North West Co., its master franchisee in Western Canada. At the time, North West said it wanted to focus on its core retailing business, and that the stores had lost money last year. Bringing those stores back into the fold – first as corporate-operated locations, and eventually finding new franchisees – will take a couple of years, Mr. Wood said. In general, moving forward, the company’s goal is to open 10 to 15 new locations annually. Giant Tiger recently opened new locations in Chicoutimi, Thunder Bay and Sault Ste. Marie.

“We don’t have a lot of penetration in some of the larger urban centres like Toronto, so there’s still an awareness gap that we have to work through,” Mr. Wood said. “ … I don’t necessarily believe we’ll be a Yonge and Bloor store, or somewhere like that,” he added, referring to the high-profile corner in downtown Toronto, “but there are a lot of neighbourhood opportunities that we’ll continue to look at, and other places in the country.”

While e-commerce is still a very small part of the company, Mr. Wood said the company has seen “exponential” growth through the pandemic and will need to continue to accelerate its online business. The company offers online grocery purchases for pick-up at stores and also ships some goods to customers homes.

Competition in the discount sector has been ramping up, said John Crombie, executive managing director of retail services in Canada for commercial real estate firm Cushman & Wakefield. As an example, he points to TJX Companies, which owns the Winners, Marshalls and HomeSense retail banners, which have been expanding fast in Canada.

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“TJX has been one of the biggest occupiers of the big boxes that were vacated by Sears and Target. They see value in the discount category,” he said. He expects the sector to continue to do well due to behavioural shifts that have taken place during the pandemic. “Value is going to be a big component of our buying patterns going forward.”

Mr. Wood, who has been with Giant Tiger for 17 years, agrees that the retail industry has bifurcated.

“We’ve seen success at the top end of retail and success at the bottom, and less so in the middle,” he said.

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