Lik

I guess T&T isn't making money?
yoursecret 發表於 2009-7-24 10:58

This is a pure guess with little factual evidence to support the claim, but I seriously doubt that T&T isn't making money.

Despite heavy competition in the market (esp in Richmond), I'd say T&T is likely doing quite well. They have supermarkets throughout the Lower Mainland, stores in Calgary and Edmonton, and have expanded into Ontario with numerous stores as well. Foot traffic is always heavy at a lot of their stores as well, and they have diversified into a wide range of products (including ready-made hot and cold food, pastries, etc.)

If I have to make a guess, I would say that the reasons for the sale is because of a combination of global economy outlook, expenditure incurred during T&T's expansion into the East, and stiffer competition from all over the place. The recession is making the business more challenging to run, as is the more competitive market. From the Ontario expansion, they must have build up a decent amount of debt as well. Even though the whole chain is still making money, it might be less worrisome / risky for the ex-owner to just take Loblaws $200M and call it a day.

Overall, I would say it was simply a smart business decision to reap your profits while it's there and gracefully bow out from the market.

-Lik

Lik

At least the staff of T&T will be happy for is that they will be unionized and get much higher pay than now.
pkphilip 發表於 2009-7-24 23:00

I didn't know SuperStore staff are all unionized.

If T&T staff gets to organize as well, is there any guarantee that salaries would rise quickly/immediately to similar levels with SuperStore? Granted,  I seem to recall that SuperStore staff aren't paid that much either (at least in comparison to several other chains), but if T&T staff receive their pay increases, how can at least one of the following things not happen?

1) T&T will have to increase prices to make up for the higher salaries
2) T&T's business will become unprofitable for Loblaws

-Lik