As the 1950s draw near, the food industry is ripe
for far-reaching changes. Two types of stores fiercely compete for
customers' business: the chains (Dominion, Steinberg, A&P,
Dionne, Union and a number of others) and a multitude of
independent grocers who will eventually join forces,
countering the competition and supply problems by pooling their
purchases.
These are the conditions that prevail in 1947, when a group of Montreal grocers applies for a charter. Adopted by the provincial legislature on December 22nd of that year, it creates a new food retailing organization: Magasins Lasalle Stores Ltée.
This project is, in fact, initiated a few weeks earlier, in a little school in Verdun where grocer-butchers have come together to discuss the future of their business. All are experiencing the same difficulties and concerns due to competition from corporate chains whose buying power enables them to offer lower prices. Since food wholesalers as we now know them do not yet exist, more and more grocers are opting for the voluntary pooling formula (or buyers' pool), as this allows them to offer customers products at prices comparable to those of chain stores. Similar groups are already formed in several regions of Quebec: Les Épiciers Modernes (founded in Montreal in 1927), Épiciers Unis Inc. (Quebec City, 1928), Les Épiciers Coopératifs (Sherbrooke, 1931), La Société Provinciale des Épiciers (Quebec City, 1939), Épiceries Richelieu Limitée (Montreal, 1940), Les Épiciers Maisonneuve (Montreal), Magasins Regal Stores (Trois-Rivières) and Les Marchands de l'Ouest de Montréal. The last three of these are founded in 1945.
Aware of this situation, grocers at the Verdun
meeting agree that it is necessary to create an entity to
represent them and support their business activities. The meeting
first appoints a provisional Board of Directors chaired by Rolland
Jeanneau, who is to initiate the process leading to the group's
recognition. As stipulated in the charter subsequently adopted,
this organization's primary goal is to conduct "the wholesale and
retail business of grocer-butcher, broker of food, meat, poultry,
fish, delicatessen products (...) and anything that may relate to
the business of grocer and butcher in general."
At the time, the authorized capital is limited to $40,000, consisting of 200 shares with a par value of $200. Upon becoming a member, each grocer receives one share carrying one voting right, regardless of sales. A weekly contribution of $5 is requested to finance the services offered. At the end of the fiscal year, operating profits are redistributed in the form of a dividend proportional to each shareholder's purchasing volume.
Initially, 19 grocers - all small grocery store owners with sales of $800 to $1,500 a week - agree to participate in the venture. These operations generally offer free delivery, give credit to a large number of customers, and rely on a two-page, black and white advertising circular produced in-house. Their stores are all located in Montreal or a neighbouring municipality.
The new group hires two new employees to handle purchasing and distribution of products to members. The Company is temporarily hosted by a produce supplier who provides them with a 100 square foot stocking area. Few months later, it establishes its quarters in a little shop located at 508, Vinet Street in the Saint-Henri sector. This new shop of about 300 square feet, is used as head office and warehouse. Due to the rapid growth of membership, the management agrees to relocate in a more spacious site. In 1950, they decide to purchase a building located at 3624, Ethen St. in Verdun. The 1,500 square foot basement is used as a warehouse and the second floor is designed for administration purposes and meetings.
On June 30, 1952, the group's members adopt a new name: Les Épiceries Lasalle Groceteria Ltée. The addition of the term "groceteria" should be seen as a reflection of changes sweeping the food industry, a groceteria being, by definition, a self-serve grocery store. At the time, grocers' premises are generally rather modest. They serve customers in stores covering an average of 600 to 1,200 square feet, with merchandise generally placed on wooden shelves attached to the wall. Goods are sold from large counters, with customers asking the grocer for the items they want.
However, major renovations alter this environment.
By the 1950s, many grocery stores have expanded and modernized,
covering areas of up to 4,000 square feet. At the same time a new
business practice is emerging: self-service. More than a simple
marketing technique, it is a significant innovation that
radically alters consumer habits and results in the introduction of
the shopping cart. New metallic product displays appear,
traditional iceboxes disappear to be replaced with refrigerated
counters, and bulk goods give way to prepackaged products. Store
layouts allow customers to circulate freely while making their
purchases, which they pay for at the check-out counter. Telephone
orders, credit sales and bicycle deliveries are gradually becoming
a thing of the past.
Through all these changes, members of Les Épiceries Lasalle Groceteria Ltée continue to position themselves to compete with major chains. Three years after its acquisition, the Ethel Street facility is no longer adequate for the needs of the company which, by then, has a total of 43 members, leading its management to purchase a large lot (50,000 square feet) for a new 15,000-square-foot warehouse. Located at 2225 Leclaire Street in east-end Montreal, the new facilities are inaugurated in November 1953.
Despite a modest start, the business grows rapidly. By 1955, sales to the 50 member-grocers top the $2 million mark.
Set up initially to benefit from the buying power of a group, members soon become interested in joint advertising as well. As Christmas Eve 1954 approaches, the organization buys 400,000 pounds of Quebec turkey and takes out a full-page ad in La Presse to announce the sale of turkeys at 39 cents a pound as well as a number of other Holiday items available at bargain prices in its stores. A "first", this initiative proves sufficiently rewarding to incite a number of grocers to repeat the experience. This triggers a period of discussion which, in 1956, leads to the creation of a new banner bringing together members wishing to take advantage of joint advertising. At the time, Jean Drapeau, mayor of Montreal, has conducted a high-profile campaign to promote his metro project. As "metro" is the buzz-word of the day in Montreal, the new banner's name is a natural. Originally, it is simply a division of Les Épiceries Lasalle Groceteria Ltée, joined by members of Les Épiciers Maisonneuve.
The group welcomes 25 new members as a result of this merger. Then in 1957, with the support of 73 members, the group's management decides to supply non-member grocers. Once again, the Company's new facilities become too small to handle growing needs.
Within a decade, the Company's founders have managed to meet the objectives they had set. They have created a structure that enables group members to overcome supply and distribution problems. On the threshold of the 1960s and the Quiet Revolution, the Company is financially sound, and its sales top the $10 million mark.
