Supply Chain North West

Being able to cater to local markets better than our competition is a key strategy for North West. Store management selection and development, store-level merchandise ordering and community relations, and profi t-sharing incentive plans are all ingredients of the business model we have built to support this strategy. We believe that continued enhancement of our localization skills, while still ensuring that we leverage our scale, is an essential component in meeting the different customer needs of the markets we serve.

Our food merchandising strategy for our Northern and NorthMart stores was adjusted in 2005 to place more emphasis on lower pricing in select product categories, in addition to more new item and “special buys”. This focus will continue into 2007. In general merchandise the priority continues to be on increasing profi tability through better supply chain and storebased ordering practices. At store level we have several more years of opportunity to improve capability through investments in technology, improvements in work methods and by upgrading the skills of our store teams.

Our store network provides us with the financial resources, stability and knowledge to pursue expansion into related markets, products and services. We are opportunistic in pursuing new ventures, such as the expansion of retail gas outlets at our Northern and NorthMart banner stores and the roll-out of Giant Tiger stores in western Canada. We also focus on ensuring that the risk/return profi le of these ventures has a high potential to be close to that of our existing store base. This requires looking at the long-term potential of a store or new product or services and the probability of achieving threshold returns on a sustainable, consistent basis. We place a heavy weighting on new ideas, clear principles, execution and the ability to track performance.

Our wholesaling expansion plans are centered on Crescent Multi Foods (CMF) in western Canada and Frontier Expeditors (FE)...