Alberta’s capital city is known for many things — a giant mall, a gorgeous river valley and a pretty successful NHL franchise.
You can add to that list Edmonton’s appeal as a testing ground for U.S. chain stores and restaurants looking to expand into the Canadian market.
Dickey’s Barbecue Pit, a popular Texas-based chain restaurant that opened its first Canadian location in Edmonton on Thursday, is one of a few major American chains that have eyed the Alberta city for expansion.
In December, American convenience store chain 7-Eleven opened a licenced location in north Edmonton that includes a dining area for liquor consumption on the premises.
California Pizza Kitchen, meanwhile, has said it will open its first Canadian location in south Edmonton sometime this year.
Industry experts say the city’s population demographics, eating habits, affordability and even the presence of a giant mall are factors in attracting businesses keen to test the taste buds of Canadians.
“Edmonton is a very good place to start because you limit your risk and you get a good market test,” Ziad Kaddoura, a franchise consultant based in Edmonton, told CBC’s Edmonton AM.
He said the city is a great place to figure out whether companies are up to the challenge of introducing a franchise in Canada with the least amount of damage in case their venture fails.
“And it’s not as saturated as other markets,” he said. “So I think it ticks all the right boxes.”
9:00New chains love Edmonton
Dickey’s decided to come to Edmonton because of the similarities between Alberta and Texas, especially when it comes to oil and beef.
“Those two things are exactly how this brand started 81 years ago in my country,” said Jim Perkins, the company’s vice-president of international sales and support.
Market research showed people in Edmonton trend toward a higher consumption of white protein, chicken and turkey. “And that’s certainly fine with us,” he said.
Smaller, affordable market with a mall
Kaddoura said the province has the closest cultural population makeup to the U.S. Quebec, for example, would respond to something with a more French flair, he added.
Toronto and Vancouver aren’t suitable test markets in that they’re too big for companies to figure out what works and what doesn’t.
Compared to the other cities, Edmonton has an affordable real estate market, Kaddoura said.
He said a 3,500-square-foot space in a neighbourhood like Windermere could cost $12,000 a month in fees, leases and rent; a similarly sized space in a suburb of Toronto would cost between $20,000 to $25,000.
He said Edmontonians are also food savvy.
“They’re open to trying different things,” he said . A couple of decades ago, that brought restaurant chains like Red Robin and Outback Steakhouse to the city.
West Edmonton Mall, which opened in 1981 and was once North America’s largest mall, also plays a role in attracting businesses to Edmonton, said Craig Patterson, a retail analyst at the University of Alberta.
“It’s a very unique centre. You don’t get some stuff in Calgary that you’ll get in Edmonton just because Edmonton has West Edmonton Mall. So it’s pretty interesting how that works,” he said.
The mall is home to Canada’s sole locations of Sarah Jessica Parker’s SJP shoe store and the Bubba Gump Shrimp Co. restaurant.
Population size a problem
Although a single restaurant could find success in Edmonton, Kaddoura said Edmonton’s small population could be a deterrent for some brands.
Companies with a business model reliant on a high volume of product in several spots to serve a larger population may not work here.
“There’s not enough to serve,” Kaddoura said.
But he said other brands will be watching the success of new openings to decide if they want to follow suit. “We’ll see what happens in the future,” he said.