Consumers Distributing - History

History

The first Consumers Distributing store was opened in 1957 by Jack Stupp in Toronto. The company was taken public in 1969. In 1978, Oshawa Group sold the 50% interest it had acquired. The company was bought by Provigo, a Quebec-based grocery retailer in 1989, and in 1993 was again sold to a group controlled by Ackerman Van Haaren, a Belgian holding company.

Consumers bought the 42-store Cardinal Distributors catalogue chain from Steinberg Inc. and the 70-store Consumers chain in the U.S. from May Department Stores, leading to a total of 400 stores in 1981.

Hudson's Bay Company, which operates Canadian department stores under the Bay and Zellers names, acquired the small "Shop-Rite" catalogue chain in 1972 and quickly expanded it in competition. It was closed in 1982. U.S. competition was mainly from the shuttered chains Best Products (also known simply as Best) and Service Merchandise, both of which operated chains of catalogue showroom retail stores in the United States.

The main focus of the retailer was jewellery, appliances, kitchenware, toys, personal care, discount furniture, electronics and seasonal goods. The retail store layout consisted of a series of glass cabinets that displayed merchandise. Customers were for the most part required to select their products from catalogues that were located throughout the store, filling out a request form for the item they desired. This form was given to the store clerk and processed for fulfillment, with the goods stored in non-public space in a warehouse system stock area, behind the counters.

There were two main catalogue launches per year, with seasonal mini-catalogues issued throughout the year to highlight certain items. The entire line changed twice a year with few exceptions. New items were introduced only with a new catalogue. A few specialty lines, such as batteries, film and some jewellry lines on counter racks, and were not found in the catalogue. Photo processing was another service available in many stores.

Consumers Distributing sought bankruptcy protection in 1996, a fate that befell its US competitors Best Products and Service Merchandise and most major jewellery chains in Canada. Argos, which was modelled on the format of Consumers Distributing, continues to thrive in the United Kingdom and Republic of Ireland.

Consumers Distributing was plagued by the perception of things "always being out of stock" due to the catalogue shopping nature of the store. With the catalogue concept, the customer selects the item either at home while looking through the company's catalogue, or by a group of catalogues in the showroom of every store. It was not uncommon for a customer to wait in line only to be told by a clerk that the merchandise was not in stock. In 1984, a concept called the "Flashboard" was introduced. The "Flashboard" was a steel bulletin board with magnetic catalogue numbers for out of stock items. Customers were able to look at the "Flashboard" for their item and if it was listed, they knew that it was out of stock and they did not have to wait in line. This concept was used in certain New York, and New Jersey stores before computerization became mainstream.

Consumers Distributing undertook several initiatives to dispel this "out of stock" perception, including "super stores" that had all of the available, in-stock products on display; and free home delivery or store to store transfer for items that were not in stock. They also implemented a state-of-the-art inventory system that could check the availability of other stores in real time, and also would suggest alternate products at the store which were in stock.

Consumers Distributing was one of the first to initiate this "real time" stock check and prepayment of products available at other branches and the main warehouse. These initiatives, including the superstore expansion, costly free delivery, and costly new inventory management software, overextended the company.

This, and increasing competition, changes in retailing (such as warehouse format stores) in the retail sector, deflation in several product categories, including jewellery and electronics, a deep lingering recession and the expansion of Walmart into Canada contributed to the company's bankruptcy in 1996.