LCBO remakes itself

A group of 10 small housewares retailers, which go by the name Pro Kitchens, has complained to the federal Competition Bureau, saying that the LCBO is abusing its monopoly position and stealing away business once reserved for the private sector.

The Globe and Mail
November 30, 2001

LCBO remakes itself
Marina Strauss

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The Liquor Control Board of Ontario has been so successful in marketing itself as a modern, consumer-friendly retailer that its latest efforts have put it at loggerheads with a group of housewares retailers, who say the LCBO is stepping on their toes by expanding into high-end home decor items.

The liquor board began last year to sell pricier accessories, including wine glasses, serving platters and place mats at 13 of its 600 outlets.

It says it's not making a lot of money on the high-end accessories – roughly $300,000 in revenue in the past year. However, as a marketing tool to entice shoppers and solidify its image as a purveyor of fine wines and a promoter of fine living, it appears to be succeeding.

The image makeover isn't entirely new; the LCBO began to pull itself into the 21st century more than a decade ago by stocking a wider variety of products, including corkscrews and giftbags, and presenting them with style.

Its advertising pitches the LCBO as a lifestyle destination and its glossy magazine, Food and Drink, offers tips for entertaining. The newest stores even boast shiny new kitchens for cooking demonstrations and classes.

Given this progression, the move this year into more carriage-trade items only makes sense, both from a marketing perspective and as a service to customers. But some argue that the LCBO has gone too far and has no business peddling itself in such a manner.

A group of 10 small housewares retailers, which go by the name Pro Kitchens, has complained to the federal Competition Bureau, saying that the LCBO is abusing its monopoly position and stealing away business once reserved for the private sector.

What's more, they say, the LCBO has an unfair edge because the merchants can't sell liquor.

The LCBO's decision to broaden its scope is a welcome one for many time-challenged consumers, who find it convenient to pick up a smart set of napkin rings with their bottle of Beaujolais.

Some consumers, such as regular LCBO shopper John Tyerman, say they wouldn't bother buying fine housewares at a liquor store because that's not its specialty.

"It's not the place I would think of going to buy high-end items," says the computer consultant, who has checked out some of the liquor store merchandise — but has bought it elsewhere.

Industry watchers say the LCBO's flirtation with housewares is bound to raise awareness of the entire home decor category, prompting consumers to head for a sleek specialty store to find a wider choice of these very products.

"The LCBO is never going to become a Williams-Sonoma or Pottery Barn," says Alan Gee, whose ad agency has developed some catchy promotions for the liquor board over the past few years. "The LCBO is just giving you a smattering of how that [houseware item] works in your life. That will help build the whole category for retailers."

Pro Kitchens counters that the LCBO is different from other retailers because it is a government agency. The group has threatened to sue it for $5.8-million, the amount the LCBO rings in annually for non-alcoholic goods. Its total annual sales are $2.7-billion.

"The whole concept is totally misguided," says Pierre Paradis, a second-generation owner of the family business C.A. Paradis Inc., a restaurant supplier and upscale housewares retailer in Ottawa.

Mr. Paradis, a member of Pro Kitchens, says he can't compete against the buying power of the LCBO. Housewares are the thin edge of the wedge, he fears, adding the LCBO could eventually move on to other areas – maybe clothing and even a café.

But LCBO spokesman Chris Layton insists the Crown corporation has no plans to branch out beyond the small selection of home entertaining items now available, mainly in the 13 flagship stores.

The controversy landed in the Ontario Legislature this week when MPP Mario Sergio demanded that Queen's Park ban non-booze sales at the LCBO. "Stop the cash grab," he said.

But it's no such thing. A modern retailer of alcohol serves its customers well by stocking some complementary merchandise.

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