October 28, 2008 / 6:51 PM / 9 years ago

Canadian Tire to test grocery sales

TORONTO (Reuters) - Canadian Tire, known for its automotive supplies and outdoor goods, is eyeing the grocery market, an area which is traditionally buffered from an economic downturn.

<p>A female shopper carries her purchases from a Canadian Tire store in Toronto, April 6, 2005. TREUTERS/Mike Cassese</p>

The company said on Tuesday that it plans to open two experimental “smart stores” both in Ontario over the next few weeks, and will include staple products such as bread, milk and some frozen goods.

Most of its stores already offer a limited selection of snacks including candy bars, chips and beverages at its check-out areas.

“This is a natural extension and research was telling us that it might be an opportunity to make some incremental sales,” said company spokeswoman Lisa Gibson.

Gibson said the two stores, located in Orleans and Welland, Ontario, will feature a new retail format, differing from its traditional stores. Gibson refused to provide details on the new concept for the stores, however.

She did note that the groceries will occupy only about 1 percent of the total floor space of the new concept stores.

“The fact that we are opening these two new stores and the formats are so different gave us an opportunity to test it in these stores,” she said.

Gibson said the company has no plans right now to roll them it out anywhere else.

Other Canadian retailers have also ventured into the grocery field in recent years including Shoppers Drug Mart, which has branched out to include staple goods.

Wal-Mart Stores Inc. has long sold groceries and now offers fresh produce, meats and baked goods at its superstores.

($1=$1.30 Canadian)

Reporting by Scott Anderson; Editing by Frank McGurty

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