Northern Food Retail Data Collection & Analysis by Enrg Research Group

Online Survey with Grocery Store Managers

NRG conducted an online survey with a sampling of grocery store retail managers. All grocery retailers in NNC-eligible communities that could be identified (approximately 131) were contacted to conduct an online survey. The online survey with store managers achieved a participation rate of approximately 75%.

One-On-One In-Depth Interviews

In-depth interviews were held with senior officials from the Northern Store, Arctic Co-op, Stanton's and the Fédération des cooperatives du Nouveau-Québec (FCNQ), as well as several companies active in supplying personal orders. Representatives from several airlines that provide air freight services into the North were also interviewed.

Community Case Studies

NRG Researchers visited 10 communities and conducted in-person interviews and store visits, spending a minimum of 2 to 4 days in each community gathering data.

Though a cluster analysis approach and further refinement through discussion with NNC staff, the following communities were identified for the community profile phase:

In each community, individuals or groups targeted for interviews included the following:

• Focus groups among a sample of local consumers^{Footnote 1}, and
• In-person discussions with stakeholders in the community, particularly those involved in food retail, local government, community economic development, education and health services.

The North West Company

The North West Company has a long history of operating in Canada's north tracing back to 1668. Some communities have had a store presence for over 200 years. The North West Company's stores offer a broad range of products and services with an emphasis on food.

The North West Company also operates grocery retailing operations in remote communities in Alaska (AC Value) as well as on islands in the Caribbean and the South Pacific (Cost-U-Less). The company also operates 31 Giant Tiger stores across western Canada. The Giant Tiger brand is a general merchandise store in terms of product mix, compared to the other retail operations. The North West Company's mission is to be a trusted community store.

In Canada's north, the company currently operates under three banners (The Northern Store, NorthMart and Quick Stop convenience stores).  The majority of its operations are branded under the Northern Store (122 stores in total, 68 which are located in NNC-eligible communities). North West Company operates six stores under the NorthMart brand of which one, located in Iqaluit, is in an NNC-eligible community. The NorthMart stores are larger retail operations with more additional non-grocery related amenities typically provided. Finally, there are 17 QuickStop convenience stores that typically operate in larger communities and serve as a second outlet to an existing North West Company store.

In total, between Northern Stores, NorthMart and QuickStop stores, the North West Company operates approximately 724,000 of retail sq. ft. across northern Canada. The average Northern Store size (retail space) is slightly less than 5,700 sq. ft., but this does vary considerably between communities. In addition to the provision of grocery food products, Northern Stores provide an array on non-grocery related product services such as financial services, tax preparation, general merchandise and clothing.

The North West Company's head office and primary hub of its northern Canadian retail operations is in Winnipeg, where it maintains a 248,000 sq. ft. warehouse for its inventory and distribution activities. Some northern resupply activity also occurs out of Edmonton, Ottawa and Montreal. The North West Company employs approximately 3,000 people as part of its Northern Store/NorthMart store network, with the vast majority of these individuals being residents from the local northern communities.

The North West Company, through its Northern and NorthMart stores, is a registered retail participant in the NNC program.

Arctic Co-operatives Limited

The Arctic Co-operatives Limited was officially founded in 1972 and amalgamated as an entity in 1982. However, its Co-operative roots date back to the 1950s in Canada's north. It is part of the broader Co-op community that operates across Canada. The Arctic Co-op operates a total of 32 stores in Canada's north, mostly under the Arctic Co-op banner and one identified as Arctic Ventures Marketplace (a recent acquisition in Iqaluit). Of Arctic Co-op's 32 stores, 30 are located in NNC-eligible communities.

In addition to retailing groceries in communities across the North, the Co-ops provide hotel services (Inns North), cable operations, fuel services, taxis, construction, outfitting, arts and crafts production and property rentals. All these activities—grocery and non-grocery—result in Arctic Co-op being an important service provider in the communities where it operates.

The central role of Arctic Co-op is to co-ordinate the resources and combined purchasing power of the local Co-operatives in a manner that will enable them to provide operational and technical support services to their members in an economically viable manner.

The mission of Arctic Co-operatives Limited is to be the vehicle for service to, and co-operation among, the multi-purpose co-operative businesses in Canada's north, by providing leadership and expertise to develop and safeguard the ownership participation of Member Owners in the business and commerce of their territory.

Structurally, each community where an Arctic Co-op operates is its own community owned Co-operative. Residents of the community join the Co-operative as members and are able to share in the profits of the store at the end of the year. There are some advantages to this model from a community standpoint. However, the more community-based decision format can also present challenges in terms of generating consistent system-wide outcomes.

The company's central office and hub of distribution operations is in Winnipeg. All of Arctic Co-op's stores are located in Northwest Territories and Nunavut. It employs approximately 1,000 people, with most residing in remote northern communities.

The Co-op is a registered retail participant in the NNC program.

Fédération des Coopératives du Nouveau Québec

La Fédération des Coopératives du Nouveau Québec (FCNQ) is a grocery retailing Co-operative that operates solely in the Nunavik region of northern Quebec. It consists of 14 stores, all of which are located in NNC-eligible communities. The FCNQ was incorporated in 1967. The mission of the Co-operative is provided below.

The purpose of the Co-op movement is to get its members to work on their own development through social and economic activities that are financially sustainable. The purpose of the Federation is to support the affiliated Co-ops in their efforts to work on their own development.

The Co-op is involved in more than just grocery retailing. Its other activities in communities include:

• Banking, post offices, cable TV and Internet services
• Management training, staff development and auditing service
• Marketing Inuit art across Canada and around the world
• Operating hotels, a travel agency, and hunting and fishing camps
• Bulk storage and distribution of crucial oil & fuel supplies
• Construction projects in Nunavik for housing, schools, etc.

The Co-operative movement is the largest non-government employer in Nunavik, with over 260 full-time and 50 seasonal employees in the region and 120 full-time employees in Montreal. The FCNQ central office is located in Montreal.

The FCNQ is a registered retail participant in the NNC program.

Stanton Group Limited

The Stanton Group Ltd. is an Inuit-owned organization and is a registered retail participant of the NNC program. Its central base of operations is out Inuvik, NT. Its grocery retailing operation consists of 3 stores—located in Inuvik, Aklavik and Tuktoyaktuk. The latter two are NNC-eligible communities.

The Inuvialuit Development Corporation, owner of the Stanton Group, is a diversified investment, venture capital and management holding company, wholly owned by the Inuvialuit Regional Corporation. The organization's goal is to have full Inuvialuit participation in the northern Canadian economy and integration into Canadian society through development of an adequate level of economic self-reliance and a solid economic base. The Inuvialuit Development Corporation was incorporated in 1977 and is one hundred percent Inuvialuit owned.

Its grocery operations in Northwest Territories consist of the following facilities:

• 15,000 square foot warehouse in Inuvik;
• 7,000 square foot retail space in Inuvik;
• 2 outlying retail outlets - Tuktoyaktuk, Aklavik; and
• Full line of delivery vehicles in addition to a logistical coordination center in Inuvik.

The Inuvialuit Development Corporation is also diversified and has operating interests in two Northwest Territories airlines. Aklak Air offers scheduled and chartered passenger and freight service across the western Arctic. Canadian North is an airline owned equally by the Inuvialuit of the Western Arctic and the Inuit of Nunavut.

Its hubs of operations are in Edmonton and Yellowknife in terms of accessing grocery products from the South.

Big Land Grocery

Big Land Grocery, with three stores, is owned by the Labrador Development Corporation. Big Land Grocery operates stores in the Labrador communities of Hopevale, Nain and Makkovik, all of which are NNC-eligible communities. Big Land Grocery is a registered retail participant in the NNC program.

Outshopping

For the purpose this study, outshopping is defined as purchasing items outside of the local physical store. This includes individuals travelling outside of the community to neighbouring towns on winter roads, ferries or air. It also includes purchasing items from the internet or phone and having it delivered via barge, truck, ferry or air. Outshopping also includes purchasing goods from suppliers that come into the community to sell their items.

NNC Direct  / Personal Order Suppliers

Residents in the North have the opportunity to order items from among 18 NNC registered southern suppliers. Individuals ("personal orders"), social institutions (e.g., schools, daycares) commercial establishments and even small retailers (e.g., hotels, restaurants) are able to place direct orders with their chosen supplier and transport the order to their community. These NNC registered southern suppliers sell both subsidized and non-subsidized items. Some companies, in addition to basic groceries, specialize in the provision of particular products such as organic foods or meat packs to customers. NNC registered suppliers are required to pass on the subsidy on all items that are identified on the NNC list of Subsidized Foods. When NNC-eligible products are ordered, the savings is calculated for the weight of the subsidized items and indicated on the customer's invoice.

Direct order supplier businesses are set up in several different ways in terms of their structure and operations. Most registered direct order companies are located in a southern city or town (at least far enough south for all weather road access). One company was identified as having a satellite office in the Kivalliq region of Nunavut. The purpose of the office was said to have been established to better assist its customers.

Some companies operate like grocery distributors with fairly large warehouse space, coolers and freezers. These organizations have sophisticated order assembly and packing areas. A few companies visited as part of this study (Arctic Buying Company, Harris Meats) maintained from 9 to 15 staff, depending on the level of activity.

Other companies are much smaller in nature and typically associated with a larger traditional grocery retailing operation. The personal order business is an offshoot of the grocery store activity. Typically, the direct order part of the business has space at the rear of the store and relies on the logistics of the main grocery retail operation to support the direct order requirements.

Some suppliers are almost exclusively serving individual customers while others are involved in supplying commercial customers (restaurants, hotels, outfitters), corporate customers (mining camps) and government events (conferences).  It should be noted that hotels, restaurants and social institutions such as day cares are eligible to access the NNC subsidy, but commercial organizations, such as mining operations, and government agencies are not eligible for the NNC subsidy. A list of recipients that are not eligible to claim the subsidy is listed on the Nutrition North Canada program website.

In interviews conducted with several suppliers, it was reported that for Nunavut and Nunavik the most frequent individual customer tended to be a transplanted southerner working in the North. In northern Manitoba and Ontario, however, this was less likely to be the case, as indigenous locals and transplants were equally likely to be using the services of a personal order supplier.

Based on interviews, and from evidence gathered in actual communities, most order companies have particular regions of focus. This focus is in part influenced by transportation logistics and the ability to find efficiencies in routing, trans-shipping and favourable freight contracts for some communities. Additionally, some companies may focus on certain areas because the business owners may have community connections which facilitate a good working relationship with particular customers.

The more active direct order companies negotiate freight rates with air carriers to transport their goods to the North. Other firms simply pass this cost to the customer. Some companies also organize large orders (crates) for customers that are barged in during the annual summer resupply period, although these shipments or orders would not be eligible for the NNC subsidy, which can only be applied to eligible items transported by air.

While NNC collects data on the weight of eligible items subsidized under NNC's direct order provision, it is not possible to accurately develop a picture of how large the direct order business is in terms of volume of groceries being sold into the North outside of NNC. One airline active in northern freight transportation estimated that they currently transport approximately 10 million lbs of personal order freight annually into northern Manitoba. The company added that this volume of business is down from over 11 million lbs about 5 years ago. The decline was attributed to the change to a narrower list of food products eligible for a subsidy following the transition from the Food Mail Program to NNC. As noted earlier in this report, local residents appear to be resorting to more shopping physically outside the community as opposed to flying on direct orders.

Air Freight

A senior Perimeter Air staff member who is active in shipping freight into northern Manitoba communities, including many NNC-eligible communities, estimated that the cost is approximately 30% higher than shipping freight a comparable distance in the South. Calm Air, another prominent northern airline, did not provide an actual percentage, but firmly agreed that transporting freight to the North was comparatively more expensive than freighting within the South. Calm Air is active in flying out of Winnipeg servicing routes in Nunavut.

Reasons provided by the air carriers as to why it costs more to move freight by air in the North compared to the same distance in the South are provided below:

• Staffing: The pilots flying northern routes are paid more – close to 20% in some cases. As well, ground crews are required in northern locations to be paid at a higher rate than a comparable position in the South. Calm Air maintains its head office in Thompson, Manitoba. As a result, the company pays more for staffing certain positions in its Thompson operations.
• Fuel: Fuel is more expensive in the North. Planes almost always have to refuel in the North for the southbound return trip. This is due to the great distances travelled and/or the decision not to carry excess fuel in order to facilitate greater freight capacity. The fuel stored in various remote communities is trucked in on winter roads or barged in, and is therefore more expensive than fuel staged in the South. In addition, the fuel must be purchased well in advance of consumption and stored in significant quantities at the airports.
• Airport infrastructure maintained by airlines in the North: Infrastructure is more costly to build and maintain in the North. Also, timelines for building infrastructure in the North can be two or three times longer than in the South, which delays its revenue-generating capacity.
• Runways: The length of the runways and their predominantly gravel construction increases the operating costs for airlines flying these routes. Most runways in the NNC-eligible communities are approximately 3500 ft. in length. This is shorter than most runways in the South and a shorter runway requires additional braking when landing, increasing the frequency of brake maintenance. For most large turbo prop or jet aircraft, the gravel runways also necessitate the installation of gravel landing kit. Gravel kits cost between $700,000 to $1 million to purchase and install.

A final observation about the costs associated with air resupply is that there was no ability, from an air service perspective, to achieve any economies of scale as is possible in southern markets. This is primarily due to:

• Small populations in the communities being served;
• Limited runway lengths; and
• Low load factor potential for flights with origin/destination pairs within the North.

Apart from Iqaluit, which has the population base and the location to serve as a hub for points further north, the planes serving NNC communities are smaller turboprop aircraft, often in a combination passenger and freighter configuration (Combi). The volume of perishable freight required in these communities is relatively small, and the Combi configuration is efficient due to its flexibility. On any given flight, the number of passengers and freight load can be quite variable. By having flexible bulkheads, the passenger cabin can be relatively quickly reconfigured to maximize the use of cabin space, allowing for sufficient seating for passengers while simultaneously maximizing floor space for cargo (bulk or palletized). Essentially, the Combi configuration allows each flight to be customized to meet the needs of the flight's passenger and freight load. In some airframes, movement of the bulkhead and adding or removing seats can be readily accomplished in a matter of hours.

However, while efficient on a flight-specific basis, as a fleet-wide modification, the Combi is not as cost-effective as larger freight-only aircraft operating in conjunction with passenger aircraft with belly cargo. The reality is that load factors and freight demand in the North's thin markets do not warrant this more cost-effective fleet make-up.

There are few circumstances where northern communities can take advantage of the most efficient fleet configuration. Iqaluit, as a major northern hub, utilizes B737 Combi aircraft in links with the South.  Iqaluit is also served by an all-freight B767. The typical Iqaluit-Ottawa route uses either a passenger B737 or a B737 Combi, depending on the passenger load requirements. Iqaluit has a high government presence at both the territorial and federal level, contributing to a frequent need for a passenger-configured B737. In such instances, freight, including food items for northern communities, is held back for the next flight. In thin, uneven markets, passenger travel and air freight can often be in a competitive situation, and freight always loses that competition.

Trucking - Winter Roads

Another critical resupply method for the NNC-eligible communities is the seasonal opportunity of winter roads or ice roads. Winter roads are particularly important for the resupply of NNC-eligible communities located in the northern regions of Saskatchewan, Manitoba and Ontario and a few locations in the North West Territories.

The ice road season is the primary resupply time for the store's non-perishable grocery and non-food household items—canned goods, packaged dry goods, bottled beverages, paper products and cleaning supplies for example.

The goal of the seasonal resupply for remote stores is to bring in enough stock to last the store until the next season resupply period (up to 12 months). In reality, this is not always possible because some grocery items have suggested Best Before Dates (BBD) that limit the time they are saleable.

As with air freight, this research provides evidence that resupply into remote northern communities by winter road is more expensive than a similar trucking resupply effort between southern locations. Based on retailer and local government interviews, rate differentials can be quite significant depending on the location being served. The following are some examples of differing freight charges:

• Winnipeg to Edmonton, AB – approx. $1,200 (1350 kms)
• Winnipeg to Thompson, MB – approx. $3,500 (770 kms)
• Winnipeg to Garden Hill, MB – approx. $6,520 (1070 kms of which 300 kms winter road)
• Winnipeg to Fort Severn, ON – approx. $16,000 (1700 kms of which 700 kms are winter road)

The previous examples, in particular the freight charges for Winnipeg to Edmonton (two southern locales) versus going north, demonstrate the increased hauling charges. The reasons for the higher northern hauling charges are:

• The inability to pick up a return or backhaul once reaching the final destination in the North. In the first example in the previous list, it would be normal for the truck, once reaching Edmonton, to pick up another load and haul that to a destination out of Edmonton. This is a rarity for northern hauls, so the truck must return to its original southern destination empty and at a cost to the original vendor.
• The pay for truckers travelling winter roads is higher than truckers on all weather roads, in order to account for risks with winter road trucking. Mishaps are infrequent, but they do occur and can be severe, given the remoteness of the areas travelled. In addition, due to safety reasons, truckers travelling on winter roads are only allowed to travel between 20 to 30 KM/hr. This lengthens the duration of trips considerably and adds to the cost.
• Refueling during long winter road trips (i.e., Fort Severn) is more costly compared to long southern all weather road trips. On long winter road trips, it is common for trucks to travel in a convoy with several trucks hauling fuel. This provides a fuel source along the trip, as well as fuel support in case of mechanical breakdowns or mishaps. The need to travel with extra trucks with the sole purpose of carrying fuel for the convoy is rare in the South, and is another example of expensive accommodations that need to be made for northern resupply.
• Based on interviews, some winter roads can be very rough and, as a result, hard on trucks and trailers. This causes increased maintenance activity that, while borne by the trucking company, is assumed by retailers to be built into the winter road hauling freight rate.

Even with the increased costs illustrated previously, retailers still say that trucking is one of the most affordable means of resupplying a store on a per pound basis. Typically, a store requires three to five semi trailer deliveries of grocery and merchandise items to supply their needs beyond the end of the winter road season.

Ship, Barge – Sealift

Resupply in the summer months (July – September) by boat is critically important for NNC-eligible communities located in Nunavut, Northern Quebec (Nunavik), parts of Northwest Territories and Labrador. As with winter roads, this is an opportunity for retail stores in these communities to stock up their warehouse with durable goods that should, for the most part, last through to next year's resupply period (again subject to BBD issues). Marine resupply is more affordable than via air cargo.

Some factors make marine supply more expensive in the North than between ports located in southern communities. The staging or loading of the ships is a more involved and complicated process in the North. Usually the ships are making multiple ports of call on a trip, so freight has to be loaded in a manner that can be efficiently accessed in the order of communities visited. Complicating the loading of resupply orders for retail stores, a considerable amount of personal orders and non-grocery supplies are included for the community.

Another cost driver of the summer marine resupply process is associated with inconsistent (or absent) harbour and docking facilities. Some communities, for example many in Nunavik, have reasonably good docking facilities with relatively efficient unloading. However, other communities served via ship, particularly those further north, are located in areas where the ocean floor offshore drops off very gradually. There are few natural harbours further north meaning, in conjunction with extreme tides, the sealift must operate mostly without port infrastructure in the traditional sense.

A common but complex approach is the use of lightering tugs and barges. The ocean-going sealift vessel anchors offshore and items are offloaded onto barges alongside the sealift vessel. Lightering tugs then push the barges to shore and ramps are laid down, allowing front-end loaders to remove the freight for on-shore warehousing. The following are a number of images that describe the process. It should be reinforced that this complex and time-consuming procedure is not required at ports with well-established infrastructure.

Barge handling is a lengthy process that is sometimes delayed due to difficult weather conditions. This adds costs that are reflected in the shipping rates. As stated earlier, marine is considered the least expensive freight mode on a tonne-kilometre basis. However, as was also pointed out, trans-shipping (transferring goods from one transportation mode to another) contributes dramatically to costs along the supply chain. While sealift is still the most cost-effective mode, the adaptations required to make sealift work in the North cut deeply into the cost savings inherent in that mode.

While climate change may have increased the number of sealift cycles within a season, there are downsides. It has been reported that shorelines and freight lay down areas have become softer, resulting in greater offloading challenges, and the increased tendency to "sink a loader" in the mud.

Distance to Market

Regardless of transportation mode, another factor that can increase transportation costs is the distance the freight must travel from source to market.

If one were to take the centrally located city of Winnipeg, MB as a starting point (also home to head offices of the North West Company and Arctic  Co-op which together operate 95 stores in NNC-eligible communities), this would be the distance from it to reach the northern markets.

Arctic Co-op Limited

• Winnipeg to Arviat, NU(closest) - 1,340 kms
• Winnipeg to Rankin Inlet, NU - 2,465 kms
• Winnipeg to Grise Fiord, NU (furthest)  - 3,020 kms

North West Company

• Winnipeg to Little Grand Rapids, MB (closest) - 275 kms
• Winnipeg to Iqaluit, NU - 2,300 kms
• Winnipeg to Norman Wells, NT- 2,425 kms
• Winnipeg to Old Crow,YK (furthest) - 3,060 kms

The resupply distances are considerable in most instances, and even if one was incorporating the most economical method of resupply, which is not the case, the costs will be higher managing a store network spread across the North.

Freight Handling – the Number of Touches

Retailers said in interviews that each time a product is handled or 'touched' before getting to the sales floor, the cost of getting the product to market increases. Retailers strive to limit the handling of a product through shipping in larger volumes and automating the handling processes as much as possible.

In the practice of northern grocery retailing, the same rule applies; however, the logistics of supplying remote communities requires a much greater degree of handling than in the South. The table at the top of the next page illustrates the handling requirements of perishable goods being transported to several northern markets. A southern store example is provided as context.

As the previous table illustrates, grocery products must be handled three or four times more between receipt from the supplier and stocking to the shelf in the North.

Transportation Summary

The preceding pages describe in some detail the additional effort and costs associated with supplying grocery products to stores in isolated northern communities. The table illustrates in dollars what this can amount to in transportation costs. To provide context, an all weather road served store (La Ronge, SK) is provided. These numbers have been provided by the North West Company.

The inclusion of the transportation costs for the La Ronge, SK store provides an illustration of how a moderately sized store with all weather road freight access can be supplied for a year at significantly less expense compared to stores in isolated communities.

Warehouse to Retail Space Ratio

Warehousing requirements and subsequent costs are much greater in isolated northern communities. Unlike southern retail operations with the standard practice of "just in time" delivery of groceryproducts, isolated northern stores must maintain a much greater amount of stock in the community. This requirement is typically met at one time in the year when a more economical transportation mode is available. The warehouse space must be properly maintained for product storage. A significant amount of the warehouse space (typically over 60%) must be heated to prevent product from freezing. These undertakings increase the operational costs of running the store.

In a southern grocery retail situation, minimal warehousing space is required because product tends to go directly to the shelf. In discussions with retailers, NRG Researchers were informed that for every 1 sq. ft. of warehouse/loading space there is approximately 6 sq. ft. of retail floor space in the South. In the North, this ratio varies significantly, as per the following examples:

• The Northern Store in Igloolik, NU – 1 sq. ft. warehouse to 2 sq. ft. of retail.
• The FCNQ Co-op in Puvirnituq, QC - 1 sq. ft warehouse to 3 sq. ft of retail.  
• The Northern Store in Rigolet, NL– 1 sq. ft. warehouse to 1 sq. ft. of retail.

Electricity Rates

Electricity costs are significantly higher in northern communities because electricity is produced by diesel generators. The following table summarizes the electricity rates experienced by stores in various northern communities. Not only are diesel generators less efficient than large power stations, but the electricity charge also bears the cost of transporting the diesel fuel to the community^{Footnote 4}.

In addition to higher per kilowatt rates that many northern stores are subject to, a monthly electricity demand rider is often assessed over and above the variable cost for the electricity consumed. Depending on the size of the store and warehousing being heated, the demand rate can be hundreds to several thousand of dollars a month.

To put this into perspective, the 19,220 sq. ft. Northern Store in Rankin Inlet, NU spent $384,334 on electricity costs in 2012. The similarly sized NorthMart store in La Ronge, SK (16,800 sq. ft.) is on the electricity grid and subject to a $0.09 kwh rate. This meant NorthMart spent $58,500 in 2012— almost six times less than the cost of heating and lighting the Rankin Inlet, NU store. Temperature differences resulting in varying heating needs is also a factor to be considered. The average high temperature in Rankin Inlet is -7°C, while it is +6°C in La Ronge, SK.

Repair and Maintenance Costs

Repair and mechanical maintenance are other factors that impacts the costs of northern grocery retailers compared to the southern retailers. During conversations with retailers, this was reported as a growing challenge because in response to consumer demand there has been a gradual increase in frozen and chilled products being carried in the stores. Retailers indicated that refrigeration now accounts for approximately 15% of the selling space in a typical store in the North. The increased refrigeration/freezer requirements increase the need for maintenance activity or repair incidents.

According to retailers, local mechanical repair capability is almost never available in the NNC-eligible communities. If a store does require service, a technician must be flown in and is typically required to stay at least a full day (10 hours) in community.

Following are examples of average refrigeration repair/maintenance incident costs to the northern retailers:

• Rigolet, NL - $3,900 per incident
• Lac Brochet, MB - $3,500 per incident
• Iqaluit, NU - $6,100 per incident
• Aklavik, NT - $3,500 per incident
• Baker Lake, NU - $5,800 per incident

The cost of a similar refrigeration repair/maintenance incident for a southern retailer is much lower, averaging in the hundreds of dollars, unless there is significant travel time involved.

Retailers were unable to provide a global sense of how much of their operating budget was devoted to repairs of this nature. A representative from the Nunavik cooperatives, FCNQ, indicated that their stores are encouraged to budget 3% to 4% of their overall operating budget for repairs.

Spoilage

Spoilage is defined as product deterioration that is expected even under the best operating conditions. It is an assumed part of operations and factored into the cost of doing business. According to a representative from North West Company, typical southern rates of spoilage make up approximately 0.4% of total sales.

Risks of spoilage are greater when retailing in isolated northern communities. The risks are greater due to:

• Time and distance to market – the travel is prolonged and at times can be rough leading to bruising. In addition, the many handlings of the product can lead to damage;
• Delays in transport due to weather conditions can lead to spoilage;
• Exposure to weather extremes – Many store managers and some consumers reported seeing fruits and vegetables touched by frost due to the transfer from plane to store. Extreme heat occasionally experienced in northern communities was also noted as a more recent problem;
• Smaller markets, with a tendency for greater variance in consumption of lower demand items, with a greater likelihood that the store will either run out of stock or have the product age on the shelf beyond its Best Before Date; and
• Best Before Date issues – unlike southern retailers, there is no recourse in terms of possibly returning this product to the manufacturer for a credit.

The last point in the preceding list warrants a more detailed discussion as it represents a particular challenge for northern retailers. Best Before Dates on dairy, fresh meats and processed foods have been utilized for grocery products for a long time and consumers are aware of the Best Before Dates when purchasing these products. Based on feedback from consumers, store managers and personal store visits, the presence of "expired" products on the shelves appears to be a declining issue in northern retail stores. Managers indicated that through careful ordering they typically do not lose much product to shelf life issues. An exception occurs occasionally when a new dairy product is introduced but does not sell well. It then must be disposed at a loss.

While the Best Before Date issue may be less of a concern than in the past, it should be noted that there are numerous misconceptions with terms such as 'Best Before' or 'expired.' The Canadian Food Inspection Agency may have clear guidelines about date labelling for terms such as 'Durable Life,' 'Best Before' dates, 'Expiration' dates or 'Use By' dates, but the consumer is woefully unaware of the distinctions. In virtually all consumer discussions involving these terms, they were perceived as interchangeable.

A stamped 'Best Before' date was perceived as the same as an 'Expiry' date. The 'Best Before' date was the most common labelling, although some items (such as infant formula) have 'Expiry' dates. In some instances, NRG researchers observed customers "stocking up" on discounted infant formula that was approaching its expiration date.  When asked, the customers stated "if something is on sale, it is about to expire." Unless these customers were buying for a number of households (a possible scenario), it is possible much of the product purchased would have been used after its expiration date.

Product dating is a challenging issue for retailers in northern Canada. Store managers stated that it is difficult to manage the annual influx of inventory during the resupply period. Efforts are made to order product with as much shelf life as possible. However, problems arise when manufacturers send up in a resupply shipment product with a shorter Best Before Date than what they had requested in the order. Unlike store managers in the South who are able to send product back to the manufacturer if necessary, stores in the North do not have the same recourse.

Retail managers and head office representatives stated that it was policy to ensure that no product was on the shelves past the Best Before Date; therefore, stock was sold at a significantly reduced price as it neared its Best Before Date. This represented a profit reduction or loss for the store on that product. In-store visits confirmed this activity as there were almost always significant sales (50%) on products that were nearing their Best Before Dates.

To manage the dating issues some of the larger northern retailers maintain a sophisticated ordering system that incorporates the products' Best before Date life span. The annual resupply for the stores takes Best Before Dates into account to prevent ordering too much stock that would then reach its Best Before Date and not be available to be sold. The down-side for cost control is that if there is an unexpected increase in consumption of a commodity, additional stock may have to be brought in through more expensive air freight.

Shrinkage

In the retail industry, shrinkage is defined as a reduction in inventory due to shoplifting, employee theft, paperwork errors and supplier fraud. In North America, the industry standard rate for shrinkage is 1.5% of total sales.

No retailers were prepared to provide a definite number as to what percent of product was lost to shrinkage factors. Over the course of the ten community visits, very different pictures emerged regarding the seriousness of shrinkage issues. In some communities, retail managers said shrinkage was not a particular problem (although there were anecdotal exceptions). These communities tended to be located in the far north (Northwest Territories, Nunavut and Nunavik).

In some locations, store managers said that product shrinkage from theft was a fairly significant problem. A unique challenge for retailers in combating this problem was the fact that store staff who try to mitigate shop lifting have a difficult time doing so. Because some communities are quite small, staff members are uncomfortable confronting other community members (some of whom may be relatives). The managers in these instances said they usually are called upon to deal with these occurrences.

Product Loss Summary

The rates of spoilage reported by retailers in the North varies somewhat. The North West Company reported a spoilage rate of 1.5%, three times higher than the industry norm. However, this number excludes lost revenues due to Best Before Date issues and shrinkage. The North West Company would not share what a global product loss percentage was, but a few retail store managers provided estimates that ranged from 5% to 20% of total sales. Some store managers of non-North West Company operations also provided estimates of spoilage rates and their estimates were not inconsistent with the ranges provided by North West Company staff.

In the Nunavik community of Quaqtaq, QC, the spoilage rates estimated at the Federation des Co-operatives du Nouveau Quebec were in the 15% to 20% range. The reason for the higher rates was that it was near the end of the air freight run which meant produce was handled more frequently and exposed to the elements more often.

Consumer Profile & Shopping Behaviours

According to Statistics Canada and Territorial government data, communities in northern Canada are experiencing population growth that exceeds the rate found in the remainder of the country. This, coupled with a reported housing shortage most communities, results in some fairly large households present in these locations. In the focus groups, it was common to encounter representatives of households with 5 to 8 inhabitants. The households are also multi-generational and extended.

Unemployment in communities with predominantly indigenous populations tends to be high.  Across nine of the ten communities visited, the unemployment rate ranged from 13% to 32%^{Footnote 6} of the adult population seeking employment. Iqaluit, NU, with a strong Nunavut Government presence and an approximately 40% non-indigenous population base, recorded an 8% unemployment rate. In Arviat, NU, with indigenous citizens comprising over 90% of the population, one local community administrator suggested that 70% or more of the population is on some form of income supplement. Local government officials in Rigolet, NLand Lac Brochet, MB, for example, identified a systematic effort by the local administration to 'share' available jobs in order to provide residents enough hours to qualify for Employment Insurance—"The 420 rule. You need 420 hours of work over three months."

The lack of employment is undoubtedly an influence on purchasing patterns, level and timing. For example, work schedules are not big factors in determining when people shop.  In discussions with consumers and retail managers, it appeared the most significant determinants as to when people conducted a major shopping trip were the arrival of pay day or the delivery of income assistance cheques. Apart from the initial day or two after a pay day, or the arrival of income supplements, typical resident shopping behaviour consists of making several trips a week to the store, purchasing just enough to get by for a few days.

The size and age of the household has an impact on shopping patterns. For example, purchasers for larger families with teenagers are more likely to shop more often and for more items.

Garden Hill, MB, is somewhat of an anomaly in this regard. The three primary grocery stores available to residents are located on Stevenson Island which in the summer can only be accessed by boat. Not everybody owns a boat, which forces residents to take a water taxi to and from the store for $6 a round trip. The additional cost of the trip combined with the fixed income situation of many residents means fewer and larger shopping trips are more normal. Residents in Garden Hill can access an in-community store (The Convenience Store) but it is a smaller store with a limited selection of items and perceived by some residents more expensive than others stores for buying groceries.

There is little in the way of an "average" shopping frequency, although "twice weekly" is often mentioned. For a large number of respondents, shopping is a task that is undertaken as the need arises, with little planning. As such, there is little long-term meal planning, and shoppers often go to the store on the day of the meal to get last-minute ingredients.

Average household grocery expenditure varies dramatically, in part because of the wide range in household size. Some respondents report household grocery shopping costs of $100 to $150 per week. These individuals are typically from smaller households consisting of one or two people. Other individuals place their estimate of weekly grocery shopping costs at $300 to $400 for their household, while weekly grocery shopping bills as high as $575 are also reported. However, any estimates gathered in the group interviews should be considered carefully. As indicated, much of the shopping is done on an opportunity basis, and relatively few shoppers appear to develop a rigorous household food budget. When there is some semblance of a household grocery budget, it is for a particular shopping trip, but does not necessarily take into account the in-between trips throughout the week.

Complicating the determination of an average grocery expenditure, some residents indicate they outshop monthly for their meat, which reduces their weekly spending in the store, but the average expenditure  amount definitely increases when the outshop amount for meat is factored in on a weekly basis.

In most communities, meat protein is a significant part of a majority of meals, either from country foods or store-purchased sources. Root vegetables are used commonly but, as with the South, pop and chips are almost always staples. The evening dinner is usually the main meal of the household and quite often the leftovers are consumed the following day.

Most retailers report a shift in their mix of food sales. Specifically, fresh dairy and produce, according to retailers are on the rise, although this appears to contradict some of the findings of the shopper focus group component, where a fairly stagnant food purchase mix is reported. One possible answer is that much of the reported increase in healthy (and NNC-subsidized) food is being purchased by some of the community professionals/leaders. In addition, the changes in community consumption patterns may be occurring incrementally over time and not in a manner that necessarily is an obvious change to the typical consumer.

Consumer Impressions of Grocery Retail in the Community

As in previous studies^{Footnote 9}, much of the discourse around the consumer impressions of the strengths and weaknesses of food retailing in the North has been driven by anecdotes associated with:

• Exceptionally high prices;
• Too much "junk food" and not enough nutritious foods;
• Expired /spoiled product and Best Before Date concerns;
• Lack of stock; and
• The lack of retail competition.

Perceptions of Changes / Trends in Grocery Retailing

In initial discussions, participants in the community shoppers groups did not readily volunteer any instances of change in retailing in the past 5 years, and where change was noted, it appeared to be marginal or incremental. However, as discussions progressed, respondents generally noted instances of small changes to store layouts as improvements. Also, respondents indicated that the amount of space dedicated to freezer space or produce appeared to have increased.

Also, some price changes were noted. In some cases, prices were observed to have increased, while prices for some other commodities, milk for example, appeared to have decreased. Consumers did not credit the NNC for any of the price declines.

When asked what factors could have affected prices, respondents tended to focus on perceived increased competition, such as pressure from "shopping from Wal-Mart", or community or media pressure. In Rigolet, NL, there were very few comments regarding any lowering in the price of goods, but there was an acknowledgement that the produce was of a better quality and in the store more regularly.

A change or trend discussed in almost all communities in the study was the presence of different fruits and vegetables. In Rigolet, NL, individuals recalled more dragon fruit and different squash being sold than in the past. In Aklavik, NT, Lac Brochet, MB and Fort Severn, ON, there was also reference to more exotic fruits being available.

Local residents indicated they valued the opportunity to experience different fruits and vegetables; however, they appreciated it when the store provided some information or even a demonstration on how the new produce could be used. In several communities, in-store tastings were provided when new fruits were first brought into the store. As one individual said, "the new products are usually a bit more expensive so it's nice to at least try it first before you spend all that money."

Consumer Awareness of Seasonality / Resupply

Respondents are generally well-versed in the seasonality and resupply aspects of their communities.

Characteristics of Grocery Stores

Ten communities were visited over the course of this study. This involved site visits and interviews with managers of 22 northern retail operations.

When visiting several stores, NRG Researchers noted similarities with grocery stores in the South in terms of being well appointed, well lit and well organized. Aisle space and the frozen and chilled product display areas in some stores in the North were as modern as would be found in many southern retail operations. These stores, upon discussions with the manager, had under gone extensive renovations recently or, as in the case of Lac Brochet, MB, been recently re-built.

Other stores had not been renovated recently. These stores were crowded, the aisles were quite narrow, the lighting was dimmer and there was a somewhat 'tired' feeling about the property. All available space was utilized for either display or makeshift storage. The freezer and chilling units had a more haphazard look to them as if they have been added into the store pieces at a time.

Retail head office personnel acknowledged that some stores in their respective networks required renovations. The retail chains monitored the state of the stores and appeared to plan well in advance which stores would be subject to upgrades and the extent of those upgrades. In addition, some stores are located on leased land from the local government or Band, which may further complicate development.

In terms of the share of retail to general merchandise, it typically seemed about 70% to 75% of the store was devoted to grocery products. In almost all communities, the local post office was located in one of the stores along with an ATM machine. Some stores maintained a coffee shop/snack area in part of the store. In Iqaluit, the North West Company's retail presence was in the form of a NorthMart store which was a very large store (relative to typical northern retail operations) and contained numerous non-grocery related amenities. In several communities, most notably northern Manitoba and Ontario, the stores provided fuel services to residents.

Warehousing capacity at the various stores visited consisted of a 'hodgepodge' of facilities. Unlike southern retail operations, a great deal of warehouse capacity is almost always required for retail operations in remote communities.  In the South the retail to warehouse ratio is usually 6 sq. ft. of retail to about 1 sq. ft. of warehouse, the North's ratio was 1:2 or 1:1 in terms of warehouse space compared to retail floor space.

The warehouse space was required to store the grocery store's provisions that generally came in at one time during the year and which had to last until that same time a year later. Stores generally had what can be described as two types of warehousing: short-term and long-term or main warehouse.

Short-term warehousing was located in the rear of the store and consisted of an unrefrigerated area where goods were brought in from the main warehouse or from an air resupply. The products were stored or staged temporarily until they could be placed on the shelf. Some newer stores had more space in this area, but for most stores it was small and made for very cramped quarters. In this rear area of the store was usually one cooler unit, about 8 ft. sq. and one freezer unit that was typically a little bigger than the cooler unit.

The cooler unit was a transitional facility as goods flown in typically filled this up and then emptied as products were placed on display in the store. The freezer unit served more as storage, but it too was replenished by fly-in resupply. In some of the independent stores visited, the freezer storage consisted of floor or chest freezers as opposed to actual walk-in freezer units.

The long-term or main warehouse capacity was sometimes external to the store in separate building. In a few cases the long-term warehousing was attached or in the basement.

The main warehouse area often consisted of a range of available storage structures that included:

• Semi-trailers
• Existing sheds and garage
• The old store building
• An old house
• Basements
• Shipping containers (usually referred to simply as "Cans")

The warehousing was organized by product type. About 40% to 50% of the main warehouse area was devoted to a range of food stuffs. This product was stored in a facility that could be heated throughout the year. The remaining warehouse space was usually split between household goods (that did not require heating), furniture and hardware, oil and vehicle supplies.

The warehousing that supports the northern retailing operations is configured to maximize the amount of stock held in the space available. However, this may not be the most efficient warehousing set-up from a stock access and retrieval standpoint.

Awareness and Impression of the NNC Subsidy

Awareness of the NNC Subsidy

Awareness of NNC among the shopper focus group respondents ranged from vague to non-existent. In many of the discussion groups with consumers, there was no awareness of NNC at all, even after repeated probes from the moderator. In some communities, a few people had heard of it, but only a couple of individuals actually knew how the Program was structured or what products the subsidy applied to.

In Garden Hill, MB, individuals more active in placing personal orders expressed a higher degree of awareness of the Program.

Among community professionals and local government officials, awareness of NNC was somewhat higher, ranging from superficial to good. Nurses are better versed with the Program, but they mainly point to NNC as one of the secondary tools in solving nutrition challenges in the North. Once the Program was explained by the moderator in some detail, a few people recalled seeing signage in the stores and a few then recalled that the subsidy was referenced on their grocery receipt. However, some suspicion was voiced by several individuals as to whether they really did receive the subsidy from the store.

"The price hasn't really changed much, so it doesn't really affect anything. If people noticed a price change because of NNC then I think (they would) start leaning towards looking at (NNC products). A lot of the things that seem to go on NNC are things people don't buy that often."

The lack of consumer awareness could, to some degree, be attributed to how the various store managers were communicating the presence of the Program in their stores.

A retailer registered in the NNC program must undertake a certain level of in-store communications regarding the NNC program. According to the Nutrition North Canada Program National Manual for Program Recipients and the NNC retailer application form, the following is required of registered retailers:

• Must agree to make the Program visible and the subsidy transparent to consumers through messages on cash register receipts and communication material, in-store signage and displays provided by AANDC.
• Must agree to support nutrition education activities in local stores by working with community lay workers and health professionals funded by Health Canada.

In the communities visited, all retail stores registered with NNC were communicating in some form the presence of the subsidy on products. There was some discrepancy from store to store, however, in terms of how information about the Program was being displayed and eligible products identified. That is, there was evidence in some stores of the development of independent promotion products beyond the required materials provided by AANDC. There was no consistent regional pattern in communications efforts.

Typically, communications in the store consisted of wall posters near the entrance, identification (NNC) on the sticker price (for Northern Stores) and shelf-talkers.

Some shelf-talkers were more effective as they actually showed what the product price would be without the NNC subsidy (see above). It did the calculation. These more detailed shelf-talkers were only observed in northern Manitoba and Ontario communities.

Stores belonging to a larger chain, particularly the Northern Store, appeared to do a better job of providing information. Information regarding the NNC program among independents was quite sporadic, keeping in mind that only retailers registered with the program are subject to requirements to make the subsidy visible.

A number of factors contribute to a low awareness of the NNC program among local residents.

• Based on conversations with consumers, the impact on their grocery budgets of the Program's subsidy was perceived as negligible as it did not demonstrably affect their budget. As a result, it was not something they looked for when shopping. 
• Confusion with other regional northern food subsidies in place affected the awareness of the NNC subsidy. In Nunavik and Labrador, there are provincially or regionally administered programs which have been in place longer and are therefore better known.
• In Nunavik, the Kativik Regional Government recently expanded the Food and Other Essentials Program which provides a 20% to 40% discount on a list of essential household grocery items. Some items, such as fresh produce, are also subsidized through NNC, while other items are not. In the Quaqtaq, QC Co-op, the subsidy impact on some products was visually more prominent compared to information on the NNC program.
• Transparency concerns was another factor that limits the awareness of the NNC program.  In many communities, local government officials that were interviewed expressed strong concern regarding how the subsidy was being applied in their store(s). From their perspective, the subsidy was not being passed on and their repeated questions to the store have not been addressed satisfactorily. In these instances, awareness of the Program among local officials was good; however, their questions regarding how it was being applied in their community made them less likely to promote the program to the local population.
• The inconsistent application of the NNC subsidy because of the transportation options into the community. In Aklavik, NT and Rigolet, NL, there were periods during the year (winter in Aklavik and summer in Rigolet) where the most efficient means to transport some NNC-eligible items was by ground or water (therefore not NNC-eligible).  Also, complicating this was where the subsidy was being applied. In some cases, wholesalers in the South were supplying the NNC-eligible product and applying the subsidy at their end. In these cases, the store was not responsible for applying the subsidy. This meant some local stores who are not registered with the NNC program but who may be accessing NNC subsidized products from a registered southern supplier do not have to provide the same level of communication to its customers.

While awareness was low about the Program and some questions existed regarding it being passed on to the end consumer, there was also generally good support in the intent and structure of the Program among consumers. Consumers, community officials and support workers supported the concept of a system that subsidized retailers' efficient transportation of healthier food options.

Health & Nutritional Awareness – NNC and its Role

In all the communities visited by NRG Researchers, local residents believed they did not have a good understanding about what foods are healthy, nor how to prepare meals in a more healthful way. This attitude was most apparent in the far northern regions of Canada, including Nunavut, NT, Nunavik and Labrador. From discussions, it was clear that many individuals held to the old assumption that if the stores sold it, "it must be good for you." As the selection and variety of items offered in stores has increased over the years, this is clearly not the case. Interviews with community shoppers express this sentiment clearly,

"When the stores first came here, Inuit never thought of anything as bad for you. You lived off the land. Everything you ate was good for you. There wasn't going (to be something) to make your teeth rot out of your head – not going to give you diabetes. So when the stores came and its food, who was to tell them that's not healthy for you? So, parents not knowingly were feeding their children unhealthy foods…"

"Health Canada should do more labeling in Inuktitut for Elders."

"For Elders, NNC (nutrition) labeling is like staring at a blank wall."

"When we (Elders) go to the store, we can't differentiate between is this good, is this bad."

With deeply rooted misconceptions such as these, it is not surprising that healthy living education or courses on food preparation sometimes fail to gain traction.

The barriers to expanding the food and nutrition options for northern communities are extensive, and in some regions grounded in cultural traditions and norms of the households. For example, one nurse in a Nunavut community described the situation where many households operating with a traditional country food diet supplemented by convenient frozen dinners, a large number of cooking utensils are not needed. The nurse pointed out that in this situation, "There's no use teaching someone how to cook if they don't have pots."

When the NNC program was fully explained and discussed residents became aware of the connection between healthy eating and the NNC program. Based on the group discussion with residents and community professionals, the association is based primarily on the inclusion of the name 'Nutrition' in the program title and less on the actual program affiliation with Health Canada.

Health care workers are an important source for communicating healthy eating.  Programs (such as NNC) designed to reduce the costs of nutritious foods are perceived as a useful step, but the nurses, educators and local government officials universally indicate that it is only part of the answer in encouraging healthier eating among northern residents.

Across the ten communities included in this study, NRG Researchers received feedback of a wide array of different healthy eating and food preparation education programs provided to residents. Following is a sampling of these efforts:

• Meal prep courses at Arctic College in Igloolik and Arviat, NU.
• Meal preparation course for pregnant women in Quaqtaq, QC.
• Life Skills or Home Economics curriculum are common in Nunavut high schools.
• Community centre staff in Puvirnituq, QC hosting monthly food shows to demonstrate ways to cook healthy.
• Diabetes Education programs are quite active in Northern Manitoba and Ontario communities of Lac Brochet, MB, Garden Hill, MB and Fort Severn, ON .
• In Fort Severn, the local government hired a nutritionist themselves (separate from Health Centre) to visit the community every 4 to 6 weeks to provide cooking classes and talks regarding healthy eating tips. This individual has made a particular effort at engaging men in learning about cooking and healthy eating.
• Numerous after-school healthy cooking and eating programs conducted by Health Centre dieticians for school age children.
• Activities by non-governmental organizations like the Food Security Network (present in Rigolet and Iqaluit) promote hunting, gardening and cooking programs during tours through various regions.

Meal programs in the schools are important, as it was reported that a great many children in the schools regularly skip meals. Uptake of meal programs in the higher grades is more uneven, and not always offered. In Rigolet, NLand Lac Brochet, MB, the educators interviewed were fairly active shoppers outside the community who had expressed intent to bring in supplies in an affordable manner so the school could provide a regular breakfast program for its students. In all the communities it operates, the Northern Store provides supplies to the schools' breakfast programs at a reduced cost—usually 15% to 20%.

Outshopping

For the purpose of this study, outshopping is the act of shopping / purchasing items from retail or wholesale sources (on-line or in-person) located outside the local community store.

In order to shop for goods outside the community, two factors must consistently be in place:

A reasonable level of disposable income and/or access to credit. As previously discussed, many residents of these communities are not well off economically and much of the population is on a fixed income – government income support system. Access to capital to make a significant upfront grocery purchase, along with the costs of a return trip from the community, if outshopping, can be a challenge.

Reasonable and moderately affordable access out of the community. Based on this examination, communities that have winter road access or regular ferry service to a better served community (i.e., all weather road) are more likely to be shopping for groceries outside the community.

Residents provided two reasons for shopping outside the community: to save money and to access a broader and better selection of quality products. After some discussion, some residents acknowledged that shopping outside the community was not always a big money saver after shipping costs were taken into account, but even a small saving helps the household budget and a greater selection was still attractive.

Country Foods

Country foods, the collective bounty from hunting and fishing, are an integral part of diet and society in the North. Community members almost universally embrace the importance of country foods to their communities, and want the practice of collecting and distributing country foods to continue as a significant part of their culture. In the groups, all participants indicated they would like to be able to increase their consumption of country foods. In most communities included in the study, individuals mentioned a particular preference for caribou.

While there is a strong wish for a healthy country food component, some respondents indicated country foods are not as plentiful or common as they had been in the past. One challenge is there are natural fluctuations in caribou herd sizes.

Respondents in Igloolik, NU, Rigolet, NL and Lac Brochet, MB were the most likely to cite these concerns.  Respondents in Rigolet, NL, pointed out that a current caribou hunting ban has had an effect on the mix of animals hunted or trapped as country food. In Igloolik, respondents indicated much of their caribou and arctic char is being shipped in from the Kivalliq Region. Lac Brochet, MB residents said that forest conditions last year around the community have meant the caribou is further away than normal and more difficult to hunt.

Some government representatives in Arviat, NU said the Kivalliq appeared to be in a reasonably good position at present to serve its needs for country foods and had supported exports to the Baffin in the past. Aklavik, NT also appears to have good access to caribou and other game at present. However, there have also been reductions in allowable caribou harvests in some areas in recent years.

In Nunavik, while country foods are important and sought after, many residents said it is also getting expensive to hunt. This, along with the fact some younger residents are showing signs of losing interest in the practice of hunting, is a concern.

In Garden Hill, MB, fishing is popular among some locals, but a noticeable number of people did not make an effort to obtain any country foods. In Fort Severn, ON, country food is a major part of the local household diet. There is an abundance of different game—geese, caribou, small game and fish—to keep freezers well stocked.

Some communities maintained a community freezer that stores local wild game and distributes to people in the community. In these communities, an effort is made to ensure seniors and households dealing with diabetes received a share of wild game. The allotment is free. In Rigolet, NL, hunters are supported financially in terms of a small stipend to cover some of the costs associated with harvesting the game. This did not appear to be the case in other communities however.

At present, a large segment of country foods are generally handled outside the formal retailing structure of the community. The hunter, once his/her household is looked after, may take any surplus to friends or relatives' households to sell, barter, or share. Alternately, the surplus may be shipped to other communities or sold through the retail food system in the community.  If the latter, the expectation is that country foods first meet Canadian Food Inspection Agency standards by inspection through Canadian Food Inspection Agency approved facilities.  The Canadian Food Inspection Agency inspection adds time and cost to the process but is in place to ensure food safety. A Nunavut Government staff member pointed out that the level of Canadian Food Inspection Agency involvement varies, depending upon the distribution and destination of the country food. As he indicated, in some instances "CFIA doesn't come into it." However, concern remained with many residents that when country foods were available in the local store, it was usually almost as expensive as southern meats and therefore not as accessible to all households.

Within a community, access to country foods is not universal. Some households do not have a snowmobile (standard equipment for modern hunting in the North), or anyone in their household who has been taught the skill set. In these instances, the household depends on surplus from other households or purchase of government inspected product at the stores.

With poverty levels being a significant concern, and the wish to reduce food insecurity, the use of country foods could be seen as a tool to reduce some pressure in these areas. The opportunity for households to extend their food budget is quite real, and country foods, by their nature of being sourced from within the region, are somewhat insulated from transportation cost impacts (although modern hunting generally uses snowmobiles which have a southern-sourced fuel component). Also, the shorter supply chain may be less vulnerable to weather delays and other challenges associated with air or sea travel in the North.

Overall, across the communities included in this study, country foods are not items that are stocked by northern retailers to a large degree. Retail operations in the communities of Arviat, NU, Igloolik, NU, Iqaluit, NU and Aklavik, NT have begun bringing country foods into their stores. Northern Stores in Arviat and Igloolik (and NorthMart in Iqaluit) had prominent chest freezers with arctic char. The char sells for about $17 per kg, which is quite a bit higher than the cost residents in the area would pay. The char is reportedly routed through the Canadian Food Inspection Agency and /or territorial inspection and is not necessarily local char.

Some local independent retailers expressed frustration of not being able to sell any local fish in their store because of Canadian Food Inspection Agency and Freshwater Fish Marketing Board rules. It was clear from retailer comments that the Canadian Food Inspection Agency and/or territorial inspection processes is perceived to increase the cost of selling country foods in local stores as well as complicating the process of getting the product to the store for sale.

In many northern locations, local governments maintain community freezers to which local hunters could donate (or in the case of Rigolet, NL, be provided a small stipend) wild game. The presence of these freezers or the abundance of game in general, further diminishes the likelihood of country food being sold in the local store.

Expectations and Role of 'Brick & Mortar' Retail Operations

The following discussion revealed the greatest disconnect between the opinions expressed at the shopper focus group level and at the retailer level.

Profile of Managers and Stores

From the information gathered from the online survey, the typical manager of a grocery store in an NNC eligible community is a non-aboriginal male between 35 to 54 years of age. The individual has likely been in the position of manager for five years or less, with a significant number having less than two years experience. However, it is likely the individual has held other positions in a northern retailing grocery operation, so there is a higher level of general managerial experience than simply the number of years as manager.

The stores are staffed predominantly with part-time employees drawn from the local community and full-time managerial positions filled from outside the community. This case is the strongest in Labrador, Manitoba, Saskatchewan, and Nunavut. Local hiring for managerial positions is occurring at a lesser rate in Quebec and Northwest Territories and Yukon.

On average, stores employ a staff of 20, with 9 of these positions being full-time. On average, Nunavut is home to larger stores, having a complement of up to 29 full and part-time staff.

Just under half of the managers surveyed (49%) said they had prior grocery retail experience in a southern market. The majority of managers with prior southern retail experience said this experience was beneficial to their managing a store in a northern setting.

In terms of product mix in the stores, about three-quarters of the stores' retail floor space is devoted to grocery (food) items, which almost always includes fresh produce, dairy, frozen foods, bakery items and dry food items. Fresh meat^{Footnote 10} is the one product that is often not an item stocked in some stores. Fewer than half the stores (49%) said they carry fresh meat. Access to fresh meat through a grocery store was highest in Labrador and Manitoba and Saskatchewan and lowest in Nunavut, Northwest Territories and Yukon stores. Virtually all stores stocked frozen meat.

Over half (60%) of managers said they did not stock country foods. Stores that did stock these items tended to be located in Nunavut (80%) or Nunavik (50%) and typically the local food sold was fish. Managers that sold country foods said it made up less than 5% of their food product volume.

Managers stated that they are receiving reasonably good air freight service. Almost half of the stores (49%) reported being resupplied by air a minimum of four times a week, with the balance (46%) being resupplied by air at least twice a week. Nunavut communities receive the most frequent service with air, 72% of managers saying they receive at least four resupply flights a week. Manitoba, Saskatchewan, Labrador and Quebec have the most infrequent level of air service.

In terms of the competitive environment, 80% said there is another grocery retailer operating in the community where they are located. In Manitoba, Saskatchewan, Ontario, Northwest Territories and Yukon, this is generally an independent operator. This tended to be a regional chain in Quebec, and communities in Nunavut were most likely to have both major northern retail chains (Northern Store and Arctic Co-op) present.

Retailing Challenges & Experiences

From a managerial perspective, staffing/HR issues followed by store equipment and maintenance are the most challenging aspects of running a store in the North. Another important challenge surrounds identification of spoilage and damage and the ordering and purchasing of inventory.

Managers who had prior experience working in a grocery retail store in the South said the greatest difference between the retailing environments are:

• HR and staffing, specifically reliability;
• Inventory management, specifically resupply times, frequency and weather interruptions;
• Product availability and price; and,
• Store and equipment maintenance, specifically costs.

Managers perceive their store to be doing a reasonably good job serving their respective community in terms of grocery product selection, giving themselves an overall rating of almost 7 out of 10 in terms of their performance in this area. Managers feel their store is well received in the community from a reputation perspective (overall rating 7.6 out of 10).

When managers were asked what they thought would have the greatest impact on reducing the costs of the groceries they sell, a strong majority (73%) said it would be to reduce freight rates.

Shopping Outside the Community

Store managers from Manitoba, Saskatchewan, Ontario, Labrador, and to some extent Quebec were most likely to indicate the incidence of shopping for goods outside the community is more common.  Managers said people are doing this to save money and to increase the selection of goods available to them.

Managers are of the view that professionals working in the community—teachers, healthcare workers and workers transplanted from the South—are most frequently shopping for goods outside the community. This said, there is also a fairly strong perception that many local residents are shopping for products outside the community as well.

Sample Profile

Ninety-eight store managers participated in the region wide survey conducted by NRG Research Group. Following is a demographic profile of the sample:

Retailing Experience & Staff Make-Up

How long have you been store manager at this store?
How many years have you been involved in other management positions at your current store?

A total of 98 persons responded to this survey

Expand for text description of this chart

Out of 98 respondents, 41 percent have experience as a manager for less than two years while 43 percent have experience in management for less than two years.

34 percent have experience as a manager for two to five years while 31 percent have experience in management for two to five years.

26 percent have experience as a manager for six or more years while 27 percent have experience in management for six or more years.

Experience among managers is higher in the stores in NT(40%, 6 years or more) and Labrador (40%, 6 years or more). Experience is lower in Ontario (54%, < than 2 years), Nunavut (48%) and Quebec (40%, < than 2 years).

How long in total have you worked in retailing in the North?

A total of 98 persons responded to this survey

Expand for text description of this chart

Out of 98 respondents, 7 percent of respondents have strongly worked in retail in the North for less than two years.

32 percent of respondents have strongly worked in retail in the North for two to five years.

61 percent of respondents have strongly worked in retail in the North for six or more years.

Noteworthy is that over a third (38%) of current managers with less than 2 years of manager experiences have been involved in retailing in the North for 6 or more. This is an indication of some additional experience with northern retailing in advance of taking over the manager position.

How many employees do you have on staff?

A total of 98 persons responded to this survey

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Out of 98 respondents, 29 percent have less than five employees on staff, 43 percent have six to nine employees on staff, and 28 percent have ten or more employees on staff.

How many employees are full-time?

A total of 98 persons responded to this survey

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Out of 98 respondents, 32 percent have less than ten full-time employees, 37 percent have ten to 19 full-time employees, and 32 percent have 20 or more full-time employees.

The mean average number of employees is 20. On average, a store has about 9 employees full-time. Larger stores, employee-wise, are in Nunavut, which on average employ just over 11 full-time people at a store.

What percent of the stores employees are from the local community? Outside the community?

A total of 98 persons responded to this survey

Expand for text description of this chart

Out of 98 respondents through a mean percentage, 82 percent of employees are said to be local while 18 percent are said to be non-local.

The highest incidence of hiring locally was in Labrador (99% local), Manitoba and Saskatchewan (84% local) and Nunavut (84% local).

What percentage of your staff is First Nation, Inuit, non-Aboriginal?

A total of 98 persons responded to this survey

Expand for text description of this chart

Out of 98 respondents through mean percentage, 31 percent of employees are said to have First Nations or Métis ancestry, 50 percent are said to have Inuit ancestry, and 19 percent are said to have non-Aboriginal ancestry.

There are significant regional differences regarding the ancestry of store staff as outlined in the table below.

What percentage of your staff are First Nation, Inuit, and Non-Aboriginal? [BY REGION]

A total of 98 persons responded to this survey

Expand for text description of this chart

Out of 98 respondents through mean percentage, the Manitoba and Saskatchewan is said to have 85 percent of staff as First Nations or Métis, zero percent of staff as Inuit, and 15 percent of staff as non-Aboriginal. Ontario is said to have 79 percent of staff as First Nations or Métis, one percent of staff as Inuit, and 20 percent of staff as non-Aboriginal. Quebec is said to have four percent of staff as First Nations or Métis, 73 percent of staff as Inuit, and 23 percent of staff as non-Aboriginal. Labrador is said to have zero percent of staff as First Nations or Métis, 99 percent of staff as Inuit, and one percent of staff as non-Aboriginal. Northwest Territories and Yukon is said to have 51 percent of staff as First Nations or Métis, 27 percent of staff as Inuit, and 22 percent of staff as Non-Aboriginal. Nunavut region is said to have one percent of staff as First Nations or Métis, 80 percent of staff as Inuit, and 20 percent of staff as non-Aboriginal.

Store Services

Which of the following grocery categories does your store provide?

A total of 98 persons responded to this survey

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Out of 98 respondents, 97 percent are said to provide fresh produce, 49 percent fresh meat, 98 percent dairy, 99 percent frozen foods, 95 percent bakery items, and 100 percent dry food stuffs.

Fresh meat service varies regionally.

• NT/Yukon – 27% yes
• Nunavut – 42% yes
• Ontario – 46% yes
• Quebec – 55% yes
• Manitoba/Saskatchewan – 63% yes
• Labrador – 80% yes

In addition to groceries, what other services are offered in your store? [MULTIPLE MENTION]

A total of 98 persons responded to this survey

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Out of 98 respondents with multiple mentions, 96 percent are said to have offered electronics, 96 percent general merchandise, 70 percent wireless phone cards, 66 percent banking or automated teller machine, 51 percent post office, 34 percent snack shop, 20 percent coffee shop, 14 percent pharmacy, six percent fuel, four percent restaurant, three percent other financial services, and 16 percent other services.

Most store managers (85%) say their store product mix is generally stable throughout the year. Only 15% say there are seasonal changes to their inventory mix.

In your store, approximately what is the percent of food vs. non-food items such as general merchandise?

A total of 98 persons responded to this survey

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Out of 98 respondents, approximately 72 percent of store inventory is food versus 28 percent for non-food inventory.

The ratio of food to non-food inventory is highest in the NT/Yukon area (average 79%, food) compared to a low of 65% food in Quebec.

What is the frequency of your community's air cargo service?

A total of 98 persons responded to this survey

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Out of 98 respondents, 49 percent have air cargo service to their community two to three times a week, 23 percent have it four to six times a week, four percent have it once a week, and 23 percent have it daily.

Stores in Nunavut, Northwest Territories and Yukon appear to have the best air resupply schedule with over a third of the stores saying they are resupplied daily (Nunavut 36%, Northwest Territories / Yukon 36%). Stores in Manitoba, Saskatchewan, Ontario and Quebec have a lower number of flights servicing their stores with over 50% saying they receive 2 to3 flights a week typically (Quebec 75%; Manitoba/Saskatchewan 69% and Ontario 54%).

Retailer Competition in the Community

Are there any other grocery stores in the community you compete with?

A total of 98 persons responded to this survey

Grocery retailer competition is most common in Quebec (90%, yes), Nunavut (94%, yes) and Labrador (80%, yes). Competition is less likely in Ontario (54%, no) and Manitoba/Saskatchewan (31%, no).

Is the grocery retail competition in your community coming from a major retail chain, regional retail chain or an independent store? [MULTIPLE MENTION]

A total of 78 persons responded to this survey

Regionally, any competition in Manitoba, Saskatchewan, Ontario, Northwest Territories and the Yukon is likely to be a result of the presence of an independent retailer. In Quebec, smaller regional chains are more likely to be identified as providing the competition in the community. In Nunavut, larger retail chains are more likely to compete directly.

Does your store retail country foods and if so what types of country foods do you retail?

A total of 98 persons responded to this survey

Only stores in Nunavut (82%, yes) and Quebec (50%, yes) one store in Northwest Territories said they retail country foods. The majority do not carry country foods.

According to the stores that retail country foods (N=39), the vast majority said this product category makes up a small proportion of their total grocery product stock (less than 5%). Country food, when stocked, is not a significant grocery item in terms of volume. That said, a third of retailers selling country foods said it was an important revenue source.

A plurality of retailers (44%) who indicated they carry country foods said there is no seasonal variation in terms of volume stocked. About 40% of stores that retail country food said volume varied based on the availability of supply, but not directly a seasonal factor.

In your experience, what is the most challenging aspect about managing a retail store in the North? [AIDED MULTIPLE MENTION]

A total of 98 persons responded to this survey

Staffing challenges appear particularly acute among Nunavut stores, where 67% selected this as the most difficult aspect of retailing in the North, and those in Quebec (60%). In Manitoba and Saskatchewan, managers are more likely to identify logistic and freight issues as the most challenging (69% of selections).

Please rate using a 1 to 10 scale, how challenging each of the attributes is in terms of managing your store. The first is [INSERT ITEM]

A total of 98 persons responded to this survey

Below are a few noteworthy sub-group findings for the attributes:

Have you ever managed or been involved in a grocery retail operation in the South?

A total of 98 persons responded to this survey

Store managers from stores in Northwest Territories/Yukon (73%), and Nunavut (61%) were more likely to have had some southern grocery retailing experience.

[IF PREVIOUS EXPERIENCE] How did this experience prepare you for managing a store in the North?

A total of 48 persons responded to this survey

Managers provided the following reasons for saying their southern grocery retailing experience did not prepare them well for their current northern assignment:

• Differences in practices—cultural, logistics (67% of mentions)
• Product availability (20% of mentions)
• Availability of staff (20% of mentions)
• Other mentions (33% of mentions)

Please rate using a 1 to 10 scale, how similar or different the following attribute are comparing retailing in the North to the South. '1' means it is very similar and '10' means it is very different. The first is [INSERT ITEM]

A total of 48 persons responded to this survey

What would you say is the one greatest difference comparing retailing in the North compared to the South? [OPEN END WITH CODED VERBATIM RESPONSES – MULTIPLE MENTIONS]

A total of 48 persons responded to this survey

N sizes are small to this question, but it appears managers in Manitoba/Saskatchewan are more likely to identify product availabilityas the greatest difference while those in Northwest Territories/Yukon identify staffing issues.

How prevalent would you say [direct or personal grocery orders/outshopping] are in the community you serve? Is it…?

A total of 98 persons responded to this survey

A total of 98 persons responded to this survey

While the incidence of personal orders or outshopping is similar overall, there is some variation by region, which is likely attributed to transportation costs and access.

Only 8% of managers (n of 8) were able to provide a response to the question, "how much is typically being spent by residents who place personal grocery orders from retailers outside the community?" The vast majority did not know what this amount was.

Of those few managers who did provide a response, a quarter said it was less than $1,000 over the year. The other managers said it was over $1,000. The mean amount was about $2,400.

In your opinion, why are people using personal direct orders?

A total of 98 persons responded to this survey

Who in the community are the most commonly using direct or personal grocery orders? [MULTIPLE MENTIONS]

A total of 98 persons responded to this survey

A total of 98 persons responded to this survey

Non-grocery items are the most ordered/brought in item with respect to shopping outside the community. In terms of grocery items, a total of 55% of mentions indicate this is being brought in from outside the community.

In your opinion, how satisfied are your customers with the overall product selection in your stores? Please rate this on a 1 to 10 scale, where '1' means very dissatisfied and '10' means very satisfied.

In your opinion, what is your store's reputation in your community? Please rate this on a 1 to 10 scale, where '1' means very poor and '10' means very good.

A total of 98 persons responded to this survey

There are a few other noteworthy sub-group findings to these questions:

• Managers of stores in communities with competition from other grocery retailers are more likely to rate their store's reputation higher (mean 7.8 with competition vs. 7.0 no competition).
• Managers who have been managing at the store for 6 years or longer were more apt to rate their store's reputation higher (mean 8.3) compared to those with a shorter tenure as manager (< 2 years – mean 7.2).

In term of frequent requests for other items to be stocked by the store, the majority of managers said there are not many items they can recall being frequently asked about (52% none). Other responses included:

• Other food (18% of mentions)
• Health foods (7% of mentions)
• Electronics (2%)
• Other (19%)

Managers said they did not stock requested items because either they were not available (55% of reasons) or they were only able to carry products authorized by head office (30% of reasons). Other reasons included a lack of space (13%) and cost (10%).

Based on your experience, what could be done to bring the costs of the grocery and merchandise you sell?

A total of 98 persons responded to this survey

Expand for text description of this chart

Out of 98 respondents for what could be done to bring down costs of grocery and merchandise they sell, 73 percent mentioned reduced freight costs, 17 percent mentioned more subsidies, nine percent mentioned reduced energy costs, seven percent mentioned reduced other costs, six percent mentioned less waste or spoilage, three percent mentioned lower margins, and ten percent mentioned other.

Based on your experience, what could be done to increase the selection of goods for sale in your store?

A total of 98 persons responded to this survey

Expand for text description of this chart

Out of 98 respondents for what could be done to increase their store selection of goods for sale, 30 percent mentioned bigger store, 20 percent mentioned nothing or the selection as good, 12 percent mentioned nothing or the small population, 12 percent mentioned better selection for produce, 11 percent mentioned more flexibility with suppliers, ten percent mentioned better freight, and nine percent mentioned other.

If issues of cost and selection in northern retailing can be addressed, who or which groups should be involved in making the required changes? [AIDED LIST MULTIPLE MENTIONS]

A total of 98 persons responded to this survey

Expand for text description of this chart

Out of 98 respondents with aided list of multiple mentions for who should be involved in making required changes if issues of cost and selection in northern retailing can be addressed, 73 percent mention retailers on the ground, 57 percent mention retailer head offices, 53 percent mention governments, 45 percent mention local community leaders, 36 percent mention customers in the north, three percent mention transportation companies, and three percent mention other.

It is interesting that while managers identify freight costs as the major driver of expenses when retailing the North (73% of mentions), only a handful identify the actual transportation companies as directly being part of the solution.

Beyond the provision of groceries, what other contribution does your store make in the community?

A total of 98 persons responded to this survey

Expand for text description of this chart

Out of 98 respondents for contributions of their stores to the community beyond the provision of groceries, 76 percent mention donations and fund-raising, ten percent mention services like banking and postal, eight percent mention other merchandise, seven percent mention employment, five percent mention co-op program, three percent mention fuel sales, four percent mention other, and five percent mention nothing.

Primary Data Sources

The research team gathered primary data from a number of different sources. Outlined below is a discussion of these different methodological approaches. Researchers Andrew Enns, Al Phillips, Liddie Sorenson-Lawrence, Micheline Bourque and Nadia Papineau-Couture were responsible for the collection of the primary data. Dr. Barry Prentice provided assistance in the analysis and interpretation of findings.

Secondary Data Sources

The beginning of the project consisted of a secondary research or existing literature review phase. An Excel database was built which was subsequently updated with demographic, socio-economic data, community infrastructure data, transportation data and retail infrastructure data. The sources of existing data consulted in this phase included Statistics Canada, provincial, territorial and local government bodies and available private sector data.

Clustering on the Basis of Indices

As described in the 'Criteria Available in the Decision Pool,' there are many combinations of characteristics available to use in cluster definition. To obtain representation from the full spectrum of governance, demographic, socio-economic, grocery / retail services and air service options would require a virtual census of participating communities. By combining the various elements of the decision pool criteria, indices can be created which reduce the variance in the trait (and hence reduce the diversity in the decision criteria). While all five major groupings contribute to variation in the environment for operation of the NNC, NRG Research Group identified that the community selection should focus on the following criteria:

• the governance/administration area (region);
• the traits contributing to variance in the air service options; and
• retail diversity.

Additionally, it is noted that there are varying levels of subsidy under the NNC program. Communities with extensive previous use of the Food Mail Program are eligible for full subsidy under NNC.  Communities with moderate previous Food Mail Program usage are eligible for a partial subsidy. Cluster differentiation based on the NNC full / partial subsidy may also prove instructive, but at present, the cluster design does not make that distinction.

Population data in the North is somewhat unreliable, as there is variability over time and some changes are not fully captured. However, based upon current estimates, the 103 communities in the sample frame collectively have about 93,700 persons in residence. From a governance / admin view, these break out as follows:

The previous table summarizes the population distribution of the provincial or territorial communities in the communities in the NNC program. In the absence of quantifiable, non-anecdotal data dealing with the relative successes or failures of NNC in the various regions, a proportional approach was recommended. The selection of the 10 communities was first distributed by their share of the sample frame:

The reader will note that a purely population-based selection will result in sampling from only six jurisdictions, with Saskatchewan and Yukon falling below the threshold.

Igloolik, NU

Arctic  Co-op

Co-op operations in Igloolik include a retail store, hotel, restaurant, freight services, property rentals, arts and crafts and convenience store.

Sales Area 12,800 sq. ft. – Main store
Sales area 1,800 sq. ft. – C-Store
Service/Warehouse 5,816 sq. ft. (In the South the ratio of retail to warehouse is about 6 to 1 sq. ft.)
Total 20,416 sq. ft.
Energy costs - $0.51Kwh plus a Demand Rate Fuel Rider (costs est. $875-$900 /month)

The Northern Store

Transportation costs over a year - $1,495,234

Winnipeg to Iqaluit (2296 KM) All freight: Air
Ottawa to Iqaluit (2098 KM) All freight: Air
Iqaluit to Igloolik (856 KM) All freight: Air
Winnipeg to Montreal (2760 KM) Dry & Frozen freight for Sealift: Rail (summer)
Montreal to Igloolik (~3000 KM) Dry & Frozen freight: Sealift (summer)

Arctic Co-op

Winnipeg to Iqaluit (2296 KM) All freight: Air
Iqaluit to Igloolik (856 KM) All freight: Air
Winnipeg to Montreal (2760 KM) Dry & Frozen freight for Sealift: Rail (summer)
Montreal to Igloolik (~3000 KM) Dry & Frozen freight: Sealift (summer)

NorthMart

140 employees of which 43 (31%) are Inuit

From 2002 to 2012, capital investment in store in Iqaluit was - $6,318,701
For 2011 year end, Northern estimates economic impact annually in Iqaluit to be $7,767,855

Sales Area 46,870 sq. ft.
Service/Warehouse 31,435 sq. ft. (In the South the ratio of retail to warehouse is about 6 to 1 sq. ft)
Total 78,305 sq. ft (In Iqaluit the retail to warehouse ratio is about 1.5 to 1 sq. ft)
Total Building Investment $6,318,701 ($81 per sq. ft.) compared to Giant Tiger in south - $68 a sq. ft. (Note: representative southern Giant Tiger is about one-fifth the square footage of the NorthMart, yet still has a lower investment per square foot)

Average Refrigeration Repair incident - $3,500
Energy costs - $0.44/kwh (compared to $0.06/kwh in Winnipeg)
Inventory Investment - $6,287,783
Accounts Receivable - $235,838
Total Operating Capital - $6,523,621
Product Losses - $364,616
NWC also operates a QuickStop convenience store in Iqaluit

Arctic Ventures MarketPlace (Co-op Corporate Store as of end of 2012)

55 employees of which 10 are full-time and 45 are part-time
Sales Area 14,000 sq.ft –
Service/Warehouse 5,000 sq.ft

Baffin Canners Ltd.

Extensive renovations to public access sales area within the last year
14 employees, all full-time
Sales Area: 800 sq. ft.
Service / Warehouse 2700 sq. ft.

NorthMart

Transportation costs over a year - $5,591,310

Winnipeg to Iqaluit (2296 KM) All freight: Air
Ottawa to Iqaluit (2098 KM) All freight: Air
Winnipeg to Montreal (2760 KM) Dry & Frozen freight for Sealift: Rail (summer)
Montreal to Iqaluit (~3000 KM) Dry & Frozen freight: Sealift (summer)

Arctic Ventures MarketPlace

Winnipeg to Iqaluit All freight: Air
Winnipeg to Montreal freight for Sealift: Rail (summer)
Montreal to Iqaluit (~3000 KM) freight: Sealift (summer)

Baffin Canners Ltd.

Ottawa to Iqaluit All freight: Air
Montreal to Iqaluit freight: Sealift (summer)

Demographic Summary

Total population – 2,318 (2011 census)
Population growth since 2006 – 12.5%
92% Inuit
8% Non-Aboriginal
Unemployment rate – 16% (2010)
Median income - $15,200
Main employers: Mining (Agnico Eagle Mines) local government, health, school, Arviat  Co-op store and Northern Store, misc. other stores

Transportation Summary

Air access 3-5 days a week – Calm Air; First Air
Air service to/from Churchill; Whale Cove; Rankin Inlet and Baker Lake. Can connect through to Iqaluit. Limited flights to/from Winnipeg and Yellowknife via First Air
3470 foot runway – gravel
Sealift two times a year

Grocery Retailing Presence – 4 Stores

Resupply

Demographic Summary

Total population – 635 (2011 census)
Population growth since 2006 – Increased 7%
92% Inuit
8% Non-Aboriginal
Unemployment rate – 27%
Median income - $16,000
Main employers: Local government, health, school, Northern Store

Transportation Summary

Air access: five days a week – Aklak Air
Air service to/from Inuvik
3000 foot runway –gravel
Sealift has seasonal ferry

Grocery Retailing Presence – 2 Stores

Resupply

Spring Summer/Fall (September) Re supply

Dry and frozen freight shipped via barge. Fall an important time to stock up for the several months (2 to 3) river closed and winter roads have not opened. Perishables flown in to communities from Inuvik. The NNC subsidy applies. The river barge operates from around June to end of September.

Winter Resupply

All freight, including perishables, arrive to communities via winter road. Nothing is flown in unless there are prolonged road closures due to weather. Winter roads are typically open from December to March. March a big stock-up supply period to carry stores with dry/frozen goods until barge starts running around June.

Stores in Aklavik and Tuk are resupplied with produce and dairy usually three times a week year round.
As a result of resupply flexibility (air, barge and winter road), best before dates are not a big problem.

Demographic Summary

Total population – 2,776 (2011 census)
Population growth since 2006 – 4.6%
98% First Nation
2% Non-Aboriginal
Unemployment rate – officially at 25% (2006)
Median income - $23,000
Main employers: Local government, health, school, retailers and one outfitter. Also work on winter roads

Transportation Summary

Air access – Perimeter
Cargo service (Northern Store only) with Calm Air
Perimeter provides daily passenger air service to/from Winnipeg to communities in Island lakes regions, including Garden Hill. Several flights a day
3,500 foot runway – crushed rock
Winter road access late January to March

Grocery Retailing Presence

Resupply

Demographic Summary

Total population – 816 (2011 census)
Population growth since 2006 – Increased 35%
98% Aboriginal
2% Non-Aboriginal
Unemployment rate – 19%
Median income - $19,300
Main employers: Northern Store, Local government, school

Transportation Summary

Air access: daily – Perimeter
Air service: to/from Thompson
3500 foot runway – crushed rock
Sealift: none
Winter Road: Yes

Grocery Retailing Presence

Resupply

Demographic Summary

Total population – 334 (2011 census)
Population growth since 2006 – N/A
99% FN
1% Non-FN
Unemployment rate – N/A
Median income – N/A
Main employers: Self-employed (trapping)

Transportation Summary

Air access: daily – Wasaya Airways
Air service: to/from Sioux Lookout
3518 foot runway – gravel
Sealift one time a year
Winter Road available for short period – very long and costly route

Grocery Retailing Presence – 1 Store

Resupply

Demographic Summary

Total population – 376 (2011 census)
Population growth since 2006 – Increased 19%
95% Inuit
5% Non-Inuit
Unemployment rate – 13%
Median income - $29,900
Main employers:  Co-op Store, government, school, health care providers

Transportation Summary

Air access: daily – Air Inuit
Air service: to/from Kangiqsujuaq, Kangirsuk
3520 foot runway – gravel
Sealift three times a year

Grocery Retailing Presence – 1 Store

Demographic Summary

Total population – 1,692 (2011 census)
Population growth since 2006 – Increased 16%
97% Inuit
3% Non-Aboriginal
Unemployment rate – 19%
Median income - $19,400
Main employers:  Co-op Store, government, school, health care providers

Transportation Summary

Air access: daily – Air Inuit
Air service:  Montreal, Akulivik, Inukjuak, Kuujjuaq
6300 foot runway – gravel
Sealift three times a year

Grocery Retailing Presence – 2 Stores

Resupply

Demographic Summary

Total population – 306 (2011 census)
Population growth since 2006 – Increased 14%
94% Aboriginal
6% Non-Aboriginal
Unemployment rate – 32%
Median income - $10,800
Main employers: Northern Store

Transportation Summary

Air access: daily – Air Labrador
Air service: to/from Goose Bay, Hopedale, Makhovik, Nain, Natashish, Postville
2500 foot runway – gravel
Sealift has regular ferry in summer

Grocery Retailing Presence

Resupply