business concept analysis

Business Concepts Analysis

- Property

Development

for

Mid Island Co-op

Bowen Location

2517 Bowen Road, Nanaimo, B.C. V9T 3L2

(250) 729-8400

Prepared by - mclaren consulting

Completed: July 16th, 2004

tel (250) 618-1226 – fax (250) 729 4961 – Email: [email protected] - Web: www.mclarenconsulting.ca

Table of Contents Table of Contents............................................................................................................................ 2 1.0 Executive Summary.................................................................................................................. 2

Conclusion and Recommendations........................................................................................4 Background............................................................................................................................5 Methodology..........................................................................................................................5

2.0 Property Analysis & Considerations ........................................................................................ 6 Place/location:............................................................................................................................. 6 Zoning:........................................................................................................................................ 6 Property/Building – Strengths and Weaknesses ......................................................................... 7 Central Location – Map .............................................................................................................. 8 History - Relevant issues from grocery operation ...................................................................... 9

S.W.O.T. Analysis .................................................................................................................9 Focus Group Report - Highlights.........................................................................................11 Market/Industry Trends .......................................................................................................11 Consumer trends ..................................................................................................................12 Relevant Strategies & Tactics from marketing analysis......................................................13 Branding...............................................................................................................................13

3.0 Business Concepts .................................................................................................................. 14 Co-op Country Market.............................................................................................................. 14 Co-op Wellness Centre ............................................................................................................. 18 Banquet – Community Centre .................................................................................................. 20 Tourism Attraction – Educational Centre................................................................................. 22 Leasing...................................................................................................................................... 24

4.0 Appendices.............................................................................................................................. 26

1.0 Executive Summary Mid Island Co-op commissioned mclaren consulting to conduct a business opportunity analysis to generate ideas for business concepts - property development ideas to replace the Mid Island Co-op grocery store at the Co-op property on Bowen road. It is important that Mid Island Co-op consider the history, brand and perception from the existing grocery store and the Co-op as a whole. Focus groups, interviews and phone surveys have relayed that there are negatives tied to the (old) Co-op brand. New branding of new business concepts is necessary, especially with a farmer’s market concept. In developing our top five concepts (plus a larger list not making the top five) we considered the following topics: Size of property/building; zoning; property, strengths and weaknesses; location; relevant history; market trends. For each of the top five concepts we did a general SWOT and an overview with rationale.

Business Opportunities Analysis Mid Island Co-op – Bowen Location

Top 5 Business Concepts: Co-op Country Market This concept combines the farmer’s market found in rural small towns with the urban market, with a strong emphasis on an enhanced customer experience. This is a market that is distinct, a market that feeds the body, mind and soul. This concept ties into several consumer growth trends including buy local, farm markets, prepared meals, gourmet take out, specialty foods, boomer retro (return to good old days) and interactive tourism attractions. Co-op Wellness Centre (market) A (whole life) market for the health conscious and/or those with an active lifestyle. A mix of healthy life style oriented retailers including health foods, produce, recreational sports shops, health - senior targeted restaurant(s), pharmacy, plus entertainment, some health services and recreational classes. Fits the demographic profile of the Co-op membership and meets a growing need for the central Island. This seniors/health oriented concept is on a growth trend and with top end baby boomers (mature market) hitting sixty this is a concept with strong and long term potential. Banquet – Community Centre This banquet facility offers a full service restaurant, catering service and also acts as a member’s community centre and theatrical facility. At its heart this is a people place, a place where members and others socialize, entertain and plan. Nanaimo has limited (full) banquet facilities and this hospitality facility allows the Co-op to build a profitable business and offer community support. Tourism Attraction – Educational Centre One of the biggest trends in the tourism industry is interactive attractions that educate and involve the visitor. This concept is part museum, part attraction, part educational facility. Nanaimo is experiencing consistent growth in tourism however one major downfall is that there are no major attractions (besides the outdoor environment). When it rains, there are no in-door (major) attractions that can be enjoyed by residents and visitors. Leasing Lease majority of space out for low risk option. Plan and managed to a leasing strategy and/or theme. This option can be used to develop the above mentioned concepts, the best opportunity for this likely being with the Co-op Country Market Or Co-op Wellness Centre. This option probably has the lowest financial risk and the biggest opportunity for consistent profits.

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Conclusion and Recommendations Through this report, its process of analysis and based on the (weighted) criteria we recommend:

1. The Co-op Country Market as the strongest overall concept. a. Benefit to members is good, will likely be well received overall b. Best overall fit to Co-op values and philosophy c. Many opportunities for growth and enhancement to concept-operation d. Can mix lease operators with Co-op to reduce risk and improve offerings e. Good market opportunity for long term

i. Fills several current market opportunities & growth trends f. Good use of facilities g. Best use of current management expertise h. A very exciting concept which should create excitement throughout the

community, receive good support from residents and the business community i. Weakness - a substantial investment is necessary to do this concept effectively

i. A comprehensive and potential lengthy planning process is necessary ii. Risk factor should be considered medium (dependant mostly on

implementation of a comprehensive plan)

2. Co-op Wellness Centre, 2nd strongest opportunity a. Best reason is it’s pursuit of a very good target segment

i. Mature market and seniors is growing, specifically in the central island b. In the global/North American market this concept is just beginning a long term

growth pattern (start of the bell curve) c. Also has many opportunities for enhancement and mixed leasing d. Weakness – also needs a substantial marketing and capital improvement budget

i. As this is a new concept, it may take time to build critical mass/profitability

ii. Should be considered a medium to high risk iii. Also requires a comprehensive planning/ leasing process

3. Leasing, 3rd strongest opportunity

a. If there are interested parties in this location – lowest financial risk b. Planning is necessary but is shared by the tenants and reduced

i. Transition time is reduced c. Allows for “other” social/charitable support program/projects d. Member equity has higher potential for positive and immediate impact e. Marketing of centre is shared, increasing ROI f. If a “substantial” tenant is found that Co-op can partner with, is a traffic draw,

meets key criteria issues and will support either of the top two concepts… i. Leasing could be the best/strongest overall choice

ii. Opportunity to keep many of the key components from the top two concepts

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g. Weakness - may be no interest from quality tenants with strong brands i. Lease agreements could reduce options for centre improvement

(exclusivity, term, etc) 1. Lease could tie Co-op to under performing operators

a. Weak traffic draws, poor to no marketing ii. Weak operators affect the entire centre operation and Co-op

iii. Reduced management control of critical operational and marketing issues 1. Lease agreement must protect Co-op interest and ensure a strong

operation and brand for the centre 2. Quality tenants may not accept strict controls, others may not be

able to fulfill requirements iv. Membership may perceive this option as not meeting Co-op values

Background Due to consistent losses from the Mid Island Co-op grocery store and the lack of potential for long term profitability, the Co-op board decided to close the grocery store as of October 31st, 2004. Based on this decision a viable business is needed to occupy the Co-op grocery store location on Bowen Road. Methodology This reports objective is to present new or different business concepts regarding property development for the Co-op Bowen property. To generate concepts for this report, traditional research methods were used to pursue both primary and secondary information. A broad criteria was used with a general review considering strengths and weaknesses of concepts. In developing/suggesting business concepts, mclaren consulting was directed that a criteria must be weighted considering Co-op’s social values, benefit to membership, long term potential of profitability and Co-op maintaining ownership and using the Bowen Road property. An extended list of criteria was developed for this report, with the input of Co-op management. Management also participated in the ranking of concepts based on the same criteria. For this presentation of concepts and general analysis, research included: Brainstorming session with Mid Island Co-op management

o Qualifying, concept ranking Interviews with: Tourism Nanaimo, Economic Development Office – City of Nanaimo,

Doug Creba, President - Board of Directors, Roger Griffin – Branding/retail specialist Market, concept research – on site, Vancouver Secondary Research

o Industry research on concepts – multiple sources; Industry Canada – Strategis o Consumer trends – multiple sources including: Trend Watching, Key Findings,

Ipsos Canada, AC Nielsen o Market trends - EDO o mclaren consulting – June 2004 Marketing Analysis – Study

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2.0 Property Analysis & Considerations

Place/location: 2517 Bowen Road, Nanaimo, B.C. V9T 3L2 4.91 acre (1.99 hectare or 214,197 sq feet) property

o Excluding credit union, gas bar, future townhouse development (area) 300 parking stalls

o Excluding credit union and gas bar

Zoning: Updated to April, 2003 (most recent at time of this report) Community Shopping Centre Commercial Zone – (C-7)

o “This zone provides for the shopping needs of the community at large” Permitted uses

o Arcades o Bingo Halls o Car Wash o Churches o Daycare facility o Fast Food Restaurants o Financials Institutions o Gasoline Stations o Home Centres o Libraries o Offices

o Production Bakery o Public Assembly and

entertainment uses o Neighbourhood Pubs o Refund Container Recycling

Depots o Restaurants o Sani-Pump Stations o Shopping Centres o Veterinary Clinics o Wholesale

Liquor stores are no longer an allowable use in the C-7 zone Multi-family housing development would require a re-zoning

o The Official Community Plan supports multi-family use at this site. If this option is of interest, a meeting with City Planning staff is suggested to map out the process / requirements.

The permitted uses/ zoning allows for a great deal of flexibility in developing business concepts. As an example, despite liquor stores not being considered allowable with C-7 zones, a Fine Wine Cellar could fit within the zoning requirements.

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Property/Building – Strengths and Weaknesses Strengths: Centrally located, almost exactly at the central point of Nanaimo

o Convenience for north and south residents On main road, Bowen corridor Close to Parkway exit/entrance One block up from (old) island highway Bowen/Island highway junction – main retail area Removed & distinct from Woodgrove retail centre Good parking Well positioned to reach households in the Diver Lake area and Bowen Road corridor Convenience to local neighbourhood and businesses Close to Beban Park/recreation Recreational and overall traffic draw Close to Tourism Nanaimo – (directing tourists to Co-op) Location known to co-op members Existing traffic pattern to location Major intersection, traffic light for entrance on Labeaux Opportunity for social housing development below – potential customers for new concept Retail is on a growth trend in Nanaimo

o improving leasing opportunities for property owners Building Large size – 26,000 sq feet

o Not many large spaces of this type in Nanaimo o Option to break up space or keep intact

Building frontage – strong presence o Can be used/adapted for multiple (impressive/memorable) looks

Covered entry – enables mixed uses – including outdoor covered retail/market area Designed as grocery store – potential attraction of other grocers and/or retailers

o Potentially lowers the property development cost for an incoming large retailer Co-op Café allows for conversion to restaurant and/or catering service Multiple entrances Multiple current and potential office uses, upstairs and down Warehouse facilities

Weaknesses: No left lane access - coming from North Awkward entrance off Bowen (right lane entrance)

o No direct entry on this (right) side of Bowen Road Car lots reduce “presence” of Co-op location A glut of retail space is available in Nanaimo Current operation is a weak traffic draw (Somewhat) removed from main retail areas

o One block away & across highway from Country Club o Not Woodgrove area – Nanaimo’s major retail growth area

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Weaknesses: Building Not a welcoming entrance to/in store Poor lighting throughout existing store

o Dark in Café and Bakery o Institution like through the rest of the store

Committed to golf retailer o Limit options for complimentary retailers o Limits options for use of space

Central Location – Map The Co-op location is central for the Nanaimo area and close to all major road arteries.

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History - Relevant issues from grocery operation Since there are many issues that relate to multiple industries/sectors, consideration must be given to what worked and what didn’t with the grocery operation, especially if a farmer’s market concept is pursued. Below are relevant issues and highlights from the marketing analysis completed in June 2004. Some issues have been expanded/adjusted for this report. S.W.O.T. Analysis

Interview issues gathered in a SWOT format from the June 2004 marketing analysis Edited for relevancy to new business concepts

Strengths: (2) Co-op Philosophy

A true locally owned store (2) Social Democratic philosophy Good support by members (3) Beautiful store (6) Great service Loyalty of members, they keep coming back Co-op has been buying longer from local producers o Good & trusted relationships o Local producers want to deal with Co-op (4) Good meat dept. Meat debt offers smoked meats Good lunch crowd for Deli (from surrounding car lots) (5) Good garden shop Garden workshops, attendance is consistently increasing Fresh product in Garden centre Knowledgeable staff in Garden Centre Green/environmental values of Co-op Convenience to local neighbourhood and businesses

Weaknesses:

(7) Membership list is not utilized for (marketing/member) store benefit (3) Not strong follow-through on good in-store ideas or promotions

o Ideas are sometimes initiated but tend to fall away when they are not managed Poor equipment (meat dept.) (2) Don’t promote Co-op brand Not implementing programs (4) Produce - (4) Customer complaints

o (3) Poor freshness – i.e. wrinkled apples o Design/layout is dated o Displays are not used to full potential (colour, etc.)

(2) Dated. poor eating/sitting area (4) Not a welcoming entrance (2) Floor displays … done poorly (3) Misconception that you have to be a member to shop at Co-op (7) Not enough promotion of store No left lane access - Coming from North

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Opportunities:

Membership list used effectively with new business/property development concept o Members are targeted o Memebers are asked to support o Demonstrate member’s value with member only services

Enhance/promote community and charitable support Competition does not recognize co-op as major threat Old style (value) Market place (i.e.: Granville Island or Pike Street Market)

o Take advantage of the Baby Boomer affinity for retro Butcher shop– promote as is and/or enhance and reconfigure Local produce – enhance and reconfigure Fresh fish Promote health – focus on health supplements, dietary specialties Food service - Pre-prepared meals - Deli & Bakery Philosophy – effectively promote & establish position Promote social responsibility

o Fair trade o Environment

(2) Anti-globalization movement very strong o Promote as shop Canadian, BC, ‘home-grown/town’

(6) Improve member sales (use of list) (3) Buy local produce (i.e.: Gabriola) Juicer in produce dept. Improve lighting (3) Offer (more) prepared foods

o Promote take home meals, party trays, etc o Promote specialty meals, lunch specials o Pasta kiosk?, Mini stir-fry

What are new colour trends? Use them and update store and “warm it up” (3) Use garden centre at entrance to encourage shoppers Change perception of being store for ‘older generation’ Promote to ex-prairie new homeowners and tourists

o Offer sani-dump, specials to bring them into the store o Motor home parking in back?

Promote to unions? When garden shop is closed for 3 months, replace with something else in that area Co-op hardware in south end or Downtown (2) Work on Kids’ Club (half-done now). In-store fishing equipment (2) Offer health care services: clinic- doctors, clinic where people wait Recycling bins – replace with our own - Expand 3R opportunities Give workshops on organic/environmental products and uses Target prairie transplant Use meeting space for non-profits and (target segment) community) groups

Threats:

Aging of loyal members (will they be replaced by new/younger) (3) Lack of target marketing (4) Lots of/ new competition - Perceived as younger/fresher, more vibrant Any store changes will anger old-timers Not changing may be worse Perception that members may owe money - embarrassment to have to pay (owe money) Lots of garden shops Wrong concept choice affects Co-ops long term Financial stability Under funding property development concept will impair business viability

o Possibly ensure failure

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Focus Group Report - Highlights Please to refer mclaren consulting’s Focus Group Report for full details.

Lighting -… in spite of the significant investment in the new entrance…

o dark entrance, lighten/brighten (store & entrance) o Particularly the café and deli/bakery areas.

Fair Trade and Organics – most are not familiar with Fair Trade products o Lumped in with organics -“important…not enough to justify the poorer quality

and much higher prices”. Local Products - promoting ‘local’ will be well received

o strong affinity for local products o seen as fresher, healthier and possibly more pesticide/chemical free o expectation is that local produce should be the same price or less

Produce - expanded, fresher (quality) and cheaper produce was a consistent focus Meat - opening a Butcher Shop would only build on the strength and trust members have

in the Co-op meat department o In a Butcher Shop environment, the brown wrap (after purchase) would send

positive signals about the meat quality as well as contributing to the overall desire for an enhanced ‘shopping experience’.

Market/Industry Trends

New and growing competition – grocery is highly competitive Many/most are incorporating the “market” approach Promotional focus local/Island identity and community support Ethnic/international grocery and produce selection is growing Grocery is enhancing organic produce selection and promoting this niche Thrifty’s is further establishing itself as the urban/sophisticate grocery retailer All competitors are pursuing the prepared meals and deli niche opportunity Country Club’s upgrade is positively affecting traffic in the Bowen Rd, Island Hwy area Tourism is growing in central Island Retail is prospering in Nanaimo Lease space, while there is still much available (especially on Bowen) it’s filling Growing interest in Nanaimo from large retailers and business in general Vancouver Island’s real estate market is booming

o Many of the newcomers are from the prairies and/or are seniors or future seniors They either value the Co-op brand or may be responsive to Co-op’s values

The social democratic and/or union movement is gaining in popularity (BC)

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Branded brands – pulling in a valued brand to improve perceived value of another Cause Marketing – “Where price and quality are equal, 76% of consumers are likely to switch to brands or retailers that support a cause in which they believe.”

o “Most receptive to cause marketing when making a purchase are women age 18 to 49, parents of young children, and Influentials.”

o Careful! Note the price/quality issue – also what people say and what they do are different – we suggest that convenience is also a strong influencer

o Does suggest where consumers (may) are going Senior’s discounts are developing as a profit crippling issue

o Senior’s oriented business sectors around the globe are trying to resolve issues developing from declining profits as the seniors demographic grow and with a continued expectation for an “earned” discounts

o Initiatives to offer value added benefits instead or incorporate discount into overall margin/pricing structure

Consumer trends

Prepared Foods/Meals Buy Local, Marketing Programs Community Farmers Markets Tourism – interactive and educational Seniors oriented lifestyle centres Pop-op Retail – short term retail offering the hottest of the hot – mobile, exhibition

o Bringing inner city hip to rural areas Kids' Opinions Influence Purchases – “Research shows that children are influencing more …” not just cereals anymore, even car purchases and more

o They have strong say in household and lifestyle decisions Generation C – Activity, content - allowing consumers to participate and create

o Not a new demographic group ☺ Early Birding - the early-bird special has been reinvented, as eager buyers willingly pay top dollar to be the first to own the hottest new consumer items Global consumption of wine and spirits continues to rise (outstripping beer!) Seeking Health Information Online - eight in ten adult Internet users have sought out health information online (relates to focus on health by adults) Obesity in children –influencing parental views on healthy food & lifestyle choices Mature Market is health conscious and considers 50 the midpoint of life, not the endpoint (huge growth demographic) Life Stages, Lifestyles – today’s consumer is more influenced by life style than age

o Relates to both market and wellness centre

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Relevant Strategies & Tactics from marketing analysis The Shopping experience Capital upgrade and improvements to in store experience.

1. Welcoming entry way 2. Improve lighting – inviting and comfortable colour temperature 3. Enlarge and improve kids club area – child minding and entertainment 4. Old fashioned market place – enhance produce/deli/bakery/meat 5. Improve and upgrade Deli and coffee shop (lighting) 6. Convenience centre, close to entry for quick pick-up of prepared meals, staples, etc. 7. In-store signage, enhance and improve for clarity, conveninec and excitement 8. Potential for leasing of space to complimentary retailers

a. Strict criteria based on fit to Co-op target market and/or traffic draw 9. External store

a. Improve signage – clarity of message and positioning b. Improve sightlines to store front from Bowen road (e.g. lower hedges) c. Make the store front more welcoming d. Weekly events - as above

Branding It is important that Mid Island Co-op consider the history, brand and perception from the existing grocery store and the Co-op as a whole. Much of the Co-op positives are an “inside secret” with staff and members. As well many members are not even fully aware of Co-op benefits. Focus groups, interviews and phone surveys have relayed that there are many negatives tied to the (old) Co-op brand. New branding of new business concepts is necessary. It is suggested that Co-op should not be the lead brand rather it should be positioned and developed as a trusted secondary support brand.

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3.0 Business Concepts Top five concepts are detailed below. These are concepts that we believe have the strongest fit for Mid Island Co-op or are most viable for this Nanaimo market area. It should be noted that the Co-op Country Market contains a great deal more detail due to the research and strategies developed form the previous marketing analysis report. The market is our choice as the “top contender” though we hope the others are given due consideration as they have strong benefits as well.

Co-op Country Market Working title only, new brand-trade name is critical Overview:

This market concept combines the farmer’s market found in rural small town with the urban market, with a strong emphasis on an enhanced customer experience. This is a market that is distinct, a market that feeds the body, mind and soul. This market differentiates itself from the incoming chain markets by enhancing the customer experience. This market will distance itself from its grocery store past by offering a completely new look, new branding (distance itself from the marketplace - sign) new offerings that features food/groceries as just part of a much larger concept. Taking what works from Granville Island, Pike Street Market in Seattle, Lonsdale Quay in Vancouver and all the farmers’ markets that are a weekly event in Island rural communities. This market is designed to offer a wide range of fresh, local produce and products. The market will appeal to the gourmet looking for specialty wines, cheeses and breads. The health conscious consumer will consistently come for the trusted - fresh, local, organic vegetables and the wide selection of health food. Seniors and families on the go appreciate the prepared meals. Seniors especially appreciate meals designed for their appetite, budget, health and tastes. This concept’s other critical objective is to be an attraction, offering an excursion that is enjoyable, entertaining and sometimes educational. A place to take visiting friends, a place where you shop for weekly groceries and enjoy yourself while doing it, a place to take the family on a rainy afternoon, a place to direct tourists, a place that makes Nanaimo proud. During the summer season, vendors meeting a strict criteria (that include quality, quantities, presentation, etc.) present their products to the public every Saturday or Sunday morning. These vendors lease space for the summer months and are attracted by the professional management, the Co-op relationship/reputation, and the traffic draw of the market. An events program is managed by the Co-op marketing co-ordinator, presenting local and cultural entertainers, educators and workshop facilitators that target the market consumer and support the market brand. The look, feel, smells and lighting all relate to a comfortable and enjoyable experience. A market that provides an incredible experience that feeds the body, mind and soul.

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Description/Details/Options: Mix of non co-op retailers/services (strict quality criteria) with "new" and existing co-op business operations:

Body Food products Activities

o Yoga and Tai Chi classes Mind Education

o Health food, cooking & wine classes, educational events Cultural Experiences New culinary experiences

Soul Music, art exhibits, dance

Multiple produce stands

o Can combine co-op operator with leased (quality) retailers o Local o Organic

Old style butcher shop o Smoke meats o Cut to order

Seafood – cut, paste, tweak from Pike Street Market o Entertain o Fresh

Gourmet cheese, pasta and deli shop Cooking workshops Wine cellar

o Wine workshops, tastings, wine bar o Focus on BC wine

The Co-op Shop (Boutique) o House brand - specialty products - trusted and value priced o Presented in an exciting, relevant and “market” atmosphere o Co-op order desk for bulk orders o Small in size - $ per sq. ft/profit

European bakery o The best in breads – taste great

Coombs – cut, paste & tweak Lease to Coombs bakers

o Healthy breads (don’t taste so great but Atkins happy ☺ ) Option if “right” fit - recognized major retailer draw fitting market theme

o Lease to a prominent, large draw retailer (i.e. Starbucks, etc) o Augment retail mix for maximum retail draw

Meals on the Run (another name) o Either lease to a catering company or Co-op develop

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o Meals to take home to the family - prepared, healthy, tasty, international o Quick pick-up – the staples of milk, bread, etc

Convenient (not pulling customers through out the market) Quick check-out (cut, paste , tweak from Urban Fare)

Courtyard entertainment area and stage (centre court – new name) o Designed as a focal point and heart of the market o Provides entertainment during market hours o Theatrical/musical/arts performances after hours (and during) o Spotlight on local and cultural celebration o Roving entertainers outside during summer at outside farmers market

RV parking Children area

o Entertainment that children will beg their parents to take them to o Not the same old ball room or colouring book area

Possibly a mini movie theatre Or some new “cultural market – interactive theme”

o Parents get time out Children’s (oriented) retailer – books, hand made toys, learning centre, etc.

o Fitting market theme/brand Floral shop Garden Café Health Foods Coffee and teas

Rationale: This concept ties into several growth trends including buy local, farm markets, prepared meals, gourmet take out, specialty foods, boomer retro (return to good old days) and interactive tourism attractions. Nanaimo is in desperate need for a tourism attraction that entertains rain and shine. Current management has experience and skills that would relate to a Country Farmers Market. Many of the loyal grocery store customers could be maintained with this concept. Concept has potential with tourism market, filling an (indoor) attraction need for Nanaimo. Attracts a good mix of target segments, including the mature market demographic. Fits with the Co-op “brand”. SWOT Strengths: Allows Co-op to further develop it’s trusted relationship with local farmers Gives the Island/Nanaimo more opportunity to sell local produce/products Allows Co-op to support local producers with a business that treats them fairly

o Good PR/Advertorial opportunity for above three A major growth trend among consumers is buy local (trust, health, loyalty & freshness) A proven destination/tourism attraction (if done right) Can utilize the expertise of store management Attracts a strong, growing and varied mix of consumer segments

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o Upscale families o Future seniors, Seniors (1-2 per household)

Exacting standards for market tenancy can/will attract better business operators (cream of the crop)

Segment includes the lucrative “mature market” (50+) Weaknesses: Not a strong tie in to the leased golf centre

o Not particularly complimentary Too similar to existing grocery store Heavy capital investment is needed to show this is a new concept

o To demonstrate not the same old Co-op o Attract tourists o Maintain loyalty

Must continually improve and stay relevant Chain grocers are pursuing a similar “market” model

o Thrifty’s renovated store in Courtenay Mixed of retail operations makes it more difficult to manage to expectations

o Customer service is critical and will be difficult to manage/guide Exacting standards for market tenancy makes it more difficult to attract tenants

Opportunities: Tourism attraction Partner/cross promotion with Island tourism operators, accommodations, retail malls Develop the Islands “Best” farmers market – inside and out

o Producers/farmers will pay a fair fee because of traffic, strong organisation/structure and advertising support

o Inside tenants enjoy the traffic from the outside market and ongoing events Weekend entertainment Cross promotion to tourists through Gas Bars Very exacting standards and criteria set for all market businesses

o Including customer service Must re-brand market and distance itself from grocery store

o Differentiate from non and member perception as an expensive, lack lustre store New trade name, that serves as brand umbrella

o Co-op “brand” takes a smaller role (i.e. another quality… by Mid Island Co-op) Target the mature market Promote to women, promote the values of co-op as a secondary influencer Promote to children to influence their parents – advertising and actual experience

o Create entertainment not as a parent but as a child (Can we go to the market Mom?)

Tea and coffee shop – cultural? Chinese herbal teas? Fair trade coffees/locally roasted? Department/store specializing in gourmet appetizers

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Threats: Competitive response from grocers (guaranteed)

o Thrifty’s Courtenay model Consumer responds to grocery store version New competition Copycats Negative PR campaign from union Not aggressive enough with transformation – recognized as a weak attempt at a good

concept Perceived as just another Co-op store – not attractive (enough) to non-members

o No opportunity to build “traction”, grow traffic trends Use of Marketplace sign – as above Below expectations service according to this concept and its target customers

o People aspect is critical – below expectations will damage this concept even more so than retail as a general industry

A farmers or country market may be considered a similar concept to the Co-op grocery store causing a negative perception with consumers, grocery store staff and membership. A substantial investment would be needed in capital upgrades and fixtures to give this concept the look and customer experience necessary to attract and retain customers.

Co-op Wellness Centre Overview: A (whole life) market for the health conscious and or those with an active lifestyle. A mix of healthy life style oriented retail shops including health foods, produce, non competitive sports shops, health - senior targeted restaurant(s), pharmacy, with some health services and recreational classes. This health conscious target market includes generation X, young families, future seniors and seniors. As with the Country Market there is an expanded focus from the standard health and fitness oriented retail operations, this is an offering that has a holistic approach to healthy living and also feeds the body, mind and soul. This centre offers healthy food, recreational products, health services and also entertainment and education. This is a social place to meet friends and enjoy a comfortable and vibrant atmosphere.

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Description/Details/Options Mix of health foods, lifestyle products, Co-op Shop, pharmacy, clothing Floral, organic and local produce (as with market) Sporting goods for the non competitive mature user

o Golf, kayaking, walking, etc Social area for entertainment, events and workshops Restaurants (smaller portions- health oriented, senior friendly)

o Catering for the health conscious and senior (smaller portions, dietetic, etc) Health clinic(s) Therapeutic Spa (entrance from a garden area) Farmers market on Saturdays/Sundays Recognized retailer fitting market theme

o Lease to a prominent, large draw retailer (i.e. Choices, etc) o Augment retail mix for maximum traffic draw

Rationale: Fits the demographic profile of the Co-op membership and meets a growing need for the central Island. This seniors/health oriented concept is on a growth trend and with top end baby boomers hitting sixty this is a concept with huge and long term potential. Central Island is growing quickly, with housing sales not appearing to slow down anytime soon. Many of these new residents are seniors, future seniors or higher income families – all tend to be health conscious. Not quite a tourist draw, this concept does have a wide pull and should be able to attract future seniors and retirees from Ladysmith to Qualicum. The Nanaimo Regional district presents a good market size for the remainder of the target segments. This concept also incorporates some of the benefits and opportunities from the Country Market concept. SWOT Strengths: Attracts growing and desirable demographic segments Is a concept hard to duplicate Smaller retiree markets will not have critical mass to succeed Compliments golf shop Butcher shop – health/lifestyle oriented

o Health conscious (cuts and sizes) o “Old style” butcher shop (like we remember)

Built in target market with Co-op members Destination Strongest fit for targeting the lucrative “mature market” (50+)

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Weaknesses: New concept, must educate consumers Mixed of retail operations makes it more difficult to manage to expectations

o Customer service is critical and will be difficult to manage/guide Exacting standards for market tenancy makes it more difficult to attract tenants Not in North end – Woodgrove retail area Existing health store in Woodgrove area Too targeted

Opportunities: Attract chain operation from Vancouver (Choices) Partner with City - parks and recreation department Develop promotional and support relationship with seniors homes Cross promotion with Tourism and hospitality providers Promote to mature market segment – lifestyle - participators

Threats: Takes too long to attract consumers to new concept Consumers do not accept concept Retirees not willing to travel to site New competition Copycats Housing prices erode attraction to new resident seniors Market area population not large enough – not able to attract large enough % of target

segments

Banquet – Community Centre Overview: This banquet facility offers a full service restaurant, catering service and also acts as a member’s community centre and theatrical facility. At its heart this is a people place, a place where members and others socialize, entertain and plan. This facility can manage large weddings and events of up to 400 people but also feels comfortable with 100 to 200 attendees. Or have small meetings or events in the facility meeting rooms. Description/Details/Options Catering and liquor facilities are available within the complex. A stage and lighting allows for a dinner theatre. This concept could include: pub/bistro, private members club, restaurant, musical performances, live theatre, catering, party rentals and social area, meeting rooms, events area.

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The inside would be casual and comfortable. The inside area is designed for a transition to a more elegant environment (weddings, etc) through planned use of lighting, props and accessories. Outside is formal making good use of the impressive entrance. Limousines pull up in a formal setting and all stay dry. This is place to plan a party, give a party or attend a party. Rationale: Nanaimo has limited (full) banquet facilities and this combination facility allows the Co-op to build a profitable business and offer community support. The mix of theatre, meeting space, event space, restaurant and catering service all complement each other very well. Good opportunity for more complimentary services. The frontage of the building has a look of theatre and could be quite impressive with minor but appropriate changes. The ample parking also lends itself well to an events and restaurant facility. SWOT Strengths:

o Strong and growing mix of desirable demographic and psychographic segments o Future seniors and seniors are relocating to Nanaimo because of housing and

quality of life o Strong fit to the Co-op members demographics o Social and interactive o Strong flexibility to meet needs of many types of events o Nanaimo has limited (full) banquet facilities with catering facilities and liquor licenses o Life style oriented – fitting mature market

Weaknesses: High risk industry

o Theatre o Restaurant

Existing and spread out cultural community Restaurants are a high risk business sector Meetings do not normally generate consistent and profitable revenue Events are difficult to attract Lack of expertise in this industry

Opportunities: Events for/managed by social democratic organisations Develop relationship with wedding planners Working relationship with other facilities

o When one is booked refer the other Restaurants - meals and table areas to meet the needs of seniors

o Meal size, lighting, music, budget, “Meals like I remember”

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o Heavy influence on people skills/respect on serving seniors Attract an existing and well run catering service Operate a “Meals on Wheels” program

o Co-ordinate with a school lunch program Contract to supply school district for hot meals programs Use leftovers from banquets for charitable needs program

o PR Market (target) all socially responsible, charitable and socially democratic organisations

o For events, meetings, catering, personal use of restaurant and catering services Promote to mature market segment – lifestyle – participators Promote to women, promote the values of co-op as a secondary influencer Department/store specializing in gourmet appetizers Develop a mature members (seniors) pricing/profit structure (seniors discount)

o Recognizes seniors desire for respect and “earned” value Consider smaller portions, etc that seniors normally consume

o Allows business profits not to be crippled by discounts Threats: Co-op not accepted as a Banquet – entertainment provider Hotels respond to new competition New competition

Tourism Attraction – Educational Centre Overview: One of the biggest trends in the tourism industry is interactive attractions that educate and involve the visitor. This concept is part museum, part attraction, part educational facility. This facility could use the Fish institute concept already in progress with Malaspina UC and the Biological centre. Tourism Nanaimo has long sought an opportunity to educate and entertain people on Nanaimo’s past, possibly a coal mining exhibit or forestry museum. Description/Details/Options: This opportunity is only limited by imagination and budget. Depending on community partners this concept could have a very interactive and educational objective. Or this concept could be developed as pure entertainment. A Fish institute based on a concept being developed Coal Mining Museum Bathtub waterway ride Railway exhibit with train ride similar to Stanley Park

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Rationale: One of the biggest trends in the tourism industry is interactive attractions that educate and involve the visitor. Nanaimo is experiencing consistent growth in tourism however one major downfall is that there are no major attractions (besides the outdoor environment) and there are no in-door major attractions that can be enjoyed when it rains. Complimentary services with other tourism, hospitality, and educational providers are many. Partnerships with the university, museum and island school boards could lead to a year round clientele and volunteer base. Co-op members could be involved as volunteers. The in-door and educational capacity of this concept lessens the seasonality aspect that most tourism operations experience. As tourism is an economic driver, this concept would benefit not only tourism but Nanaimo as a whole and support educational programs. SWOT Strengths: Matches with Co-op’s community support values Support of education programs and the school boards support in return Nanaimo is growing as a tourism centre No major tourism attractions in area Community building venture Museums are undersized Can reduce costs and risk by sharing with community partner

Weaknesses: Tourism attractions are high risk businesses Nanaimo is not currently a strong tourism destination ( a gateway) Not within the experience of co-op management/board? Substantial investment is likely needed Location may be confusing for tourists, non Nanaimo residents Seasonality

Opportunities: Strong PR opportunities Community partnership with tourism, educational, hospitality sectors Attract students from across the country Pursue all primary schools in central island – target market Seasonal changes in attractions Annual passes (Co-op membership driver) Share costs and risks with community partners Reduce operational cost by use of community partners and volunteers

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Threats: New competition Destination market does not grow Not a large enough market Outside market competition

Leasing Overview: Lease majority of space out for low risk option. Plan and managed to a leasing strategy and/or theme. Description/Details/Options: Recognized retailer fitting market theme

o Lease to a prominent, large draw retailer (i.e. Starbucks, etc) o Augment retail mix for maximum traffic draw

Leasing strategy - options o One or two large, long term tenants that maximize ROI o Retail mix that combines prominent tenants with an opportunity to compliment

with Co-op concepts Co-op boutique/order desk

o Short term lease (3 year?) that allow the Co-op to pursue another property development option several years ahead

Free standing buildings for lease o Specialty wine/pub o Restaurant o Home for a charitable group

Mini Co-op warehouse and order desk for commercial customers Rationale: This option probably has the lowest financial risk and the biggest opportunity for consistent profits. This option minimizes management requirement for the long term, it is the easiest option. Minimum amount of Co-op can take profits form this option and combine with the Fuel division profits to offer exciting community support programs. SWOT Strengths: Tenants (some) can be responsible for capital upgrades in return for long term lease One or two large tenants leads to ease of transition, management, With right tenants, low financial risk With right tenants, strong and immediate ROI for Co-op Apparent growth opportunity for free standing tenants in retail (malls) centres

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Weaknesses: Upgrades may be needed to attract tenants Long term leases limit long term options for Co-op Perceived as not socially responsible Difficult to attract socially relevant tenants Good lease tenants are difficult to attract Difficult to develop a good “mix” of tenants that are complementary to each other

Opportunities: One or two large tenants allow for ease of management and focus on other Co-op

initiatives Free standing businesses located in parking area – similar to other malls Develop leasing strategy incorporating a Co-op order desk and warehouse, Co-op Café

(upgraded). Threats: Low customer draw tenants negatively affects CCCU and Co-op businesses Minimal leasing options leads to a poor mix of businesses, negatively affecting centre for

the long term Non proven tenant businesses (leasing in desperation – bottom feeders)– do not survive

o Affecting centre’s traffic draw and perception with public and potential businesses

Concepts (Seniors) Life Centre Retail/restaurant/recreation RV travellers’ area (RV sani dump/car wash/etc) Tourist Attraction Farmers Market Casino Meals on Wheels/Catering facility (compliment banquet) Food Link depot - (As above) compliment as Bingo Daycare Recycling Depot Call Centre Educational Facility Artisans Studio Medical/health clinic and pharmacy Factory Outlets Co-op order desk (mixed with other lease opportunity) Co-op warehouse (combined with above) Co-op Shop "boutique" (new name) Fitness centre

Co-op Management - "brainstorming" concepts Pub - (different descriptive name) - multi cultural themes Sell property Lease entire space (other than or including office) Car lot Outlet centre Strip Mall Funeral Home Mountain Co-op (specifically or a version of) Dinner Theatre Banquet Hall combined with market Bowling Alley Pool hall (or combined with above) Tourism/attraction concepts Fish institute Coal mining attraction Bathtub - boat attraction Mini golf Open market

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4.0 Appendices AC Nielsen – July 2004 Retail Trends. Wal-Mart was on target with its titanic expansion trend, setting records at every turn, including one mind-boggling day when it opened 50 stores. Whether the measure is sales or household penetration, fewer retailers are wielding more power than ever before. Mid-size competitors are embracing niche strategies from gourmet to whole health offerings to private label launches in an effort to build consumer loyalty and fend off ravenous suitors. The wheels for success have been set in motion with more gas stations making their debut at grocery along with drive-through convenience windows. New Product Trends. What a difference a decade makes! The rate of new product introductions doubled, resulting in 31,432 launches, the majority falling into non-food categories. Hot trends included anything with soy, anything interactive like decorating kit cookies and any walk-about product like portable stuffed pancake rolls. Brand managers attempting to gauge roll-out success were given an early indicator tool--the level of in-market trial--as the single best barometer of consumer acceptance and uptake. Category Trends. Abstinence? Forget it! Indulgence? Embrace it! Diners abandoned their temperate ways and re-examined the concept of the two martini/steak lunch. The appetizing results moved fresh meat into first place as the fastest-growing category (36.9% per annum), with alcoholic beverages snagging runner-up honors thanks to a 31.8% year-to-year growth rate. Channel Blurring Trends. Dollar stores and supercenters made chump change out of supermarkets' once unassailable position as guru of grocery goods. Consumers have opted in to variety on the format front and kicked channel loyalty to the curb. Paper buyers cut the dedicated connection and 80% shop two or more channels. Those smiles in the oral hygiene aisles now spread across multiple formats for two-thirds of category shoppers. Heavy shoppers still throw their weight around, as one-third of the shopper universe totes up the majority of sales for every channel studied--grocery, mass, drug, warehouse, convenience and dollar stores. Private Label Trends. Private label is turning the table on branded marketing. The former stepchild to well-promoted national brands, private label goods are making a public spectacle of themselves and grabbing the sales to prove it. From also-ran generics with so-so quality, private label brands have evolved into the quality leader with all the packaging and promo power associated with a premium brand. Branded marketers find themselves spinning in the backdraft of categories like eye makeup, lipsticks and canning supplies, where private label registered annual growth rates of 1,000% or more. Canadian Consumer Trends. With breathtaking lakes and mountains and a robust economy, The United Nations ranks Canada number three for overall quality of life among 174 countries. Like the U.S., the demands of an aging population bring an increased concern with physical health and healthy eating habits. Time-strapped Canadian consumers look to convenience shopping alternatives to save time and money.

business concept analysis

Documents

marketing analysis

wellness centre

banquet community centre

opbowen location

central location map

bowen road

v9t 3l2

history relevant issues