Bay And Zellers Faces example essay topic

Today Hudson Bay Company is at an uphill battle in Canada's Department store war. Although Hudson Bay may be the oldest it is no longer fit to dominate the market like it used to. Hudson Bay has dated back to 1670 with fur trading company then branched out. Three centuries HBC (Hudson Bay Company) is Canada's largest department store retailer. Today HBC operated under 3 banners: The Bay, Zellers, and Home Outfitters. 2002 the revenue of HBC for that year was the same as the year before.

Net earnings dropped from 125.3 million to 72.8 million. This was a slow year for clothing sales for The Bay and seeing how Clothing sales account got 70% of revenue this was a dramatic change. The Bay is losing its share in the market to competitors. The Bay is trying to improve its operating efficiency. The Bay has made significant investment in technology. To implement a common computer platform, a common HBC rewards and credit card was implemented to encourage cross-banner shopping.

In 2001, The Bay had tried to give a new image by the new slogan "shopping is good" none of these really made a substantial change to the company. The real problem that The Bay faces today is shrinking market shares. The Bay and Zellers faces incredible pressure from Sears & Wal-Mart. Sears has opened 7 new Eaton stores through the last years and Wal-Mart continues to expand rapidly along with big-box stores like Business Depot and Future Shop. A recent move was The Bay striking an arrangement with Federated Department Stores Inc. to have exclusive rights to clothing and house wear brand previously available only at upscale United State retailers. Although the dramatic changes The Bay has made, people still see The Bay as "Bland looking" and uninspiring retail environment.

HBC currently operated 100 Bay stores, 323 Zellers, and 22 Home Outfitters. A goal for 2002 for HBC was to open as many as 17 new stores in Canada. HBC feels that Home outfitters has a very promising future. Home Outfitters: the type of store that is fueling growth in retail sales. The Bay competes for shares in this market with Sears and as for Zellers it competes with the famous Wal-Mart. Wal-Mart's "low-price policy" makes them unstoppable.

Wal-mart has the dominant position in the discount segment that was once controlled by Zellers. Wal-Mart's strategy is low-priced goods attracting customers, as for Zellers: the strategy is to become the preferred store of Canadian moms. Zellers attempts to compete with Wal-mart. Zellers has invested in expanding and upgrading more than half of its 323 locations. Those stores will have brighter and wider aisles, popular brands like Truly and Cherokee, Adding a indoor and outdoor furniture, electronics, pet supply, and foods section to all of their selected stores.

Zellers wants to go head-to-head with Wal-Mart. Zellers adopting the "everyday low prices strategy" where merchandise has a low sticker price all year round. Kmart had once tackled Wal-Mart and had ended up in bankruptcy. Today many Zellers customers are now Wal-mart loyalists, this making it very costly to change Zeller's image. I remember days where my mother and I would go shopping at the once famous Zellers offering great prices and great selection, now a day my mother suggests to go to Wal-Mart instead. Convincing me that it cheaper and that he guarantee the price they have, this giving her the assurance that this was the safest way to purchase and know that the hard earned money was not being cheated from her in some way.

I am sure that that is one reason that every mother faces today. Zellers need to let customers know the low price policy and convince them for a second try. Booklet from Class & Some Research Online Management 40's Mr. K's Class.