Canadian Tire Corporation, Limited

International Directory of Company Histories, Volume 71 (2000) by Dave Mote, David Salamie

Canadian Tire Corporation, Limited

2180 Yonge Street P.O. Box 770, Station K Toronto, Ontario M4P 2V8 Canada Telephone: (416) 480-3000 Fax: (416) 544-7715 Web site: http://www.canadiantire.ca

Public Company Incorporated: 1927 Employees: 8,300 Sales: CAD 8.39 billion ($6.97 billion) (2004) Stock Exchanges: Toronto Ticker Symbol: CTR NAIC: 441310 Automotive Parts and Accessories Stores; 441320 Tire Dealers; 444110 Home Centers; 447110 Gasoline Stations with Convenience Stores; 448140 Family Clothing Stores; 454111 Electronic Shopping; 811191 Automotive Oil Change and Lubrication Shops; 811192 Car Washes

Canadian Tire Corporation, Limited is one of the leading retailers in Canada. The company, aided by associate dealers, franchisees, and agents, operates the flagship Canadian Tire chain, which includes more than 450 stores from coast to coast. These stores offer a wide selection of automotive parts, accessories, and services; sports and leisure products; and household goods. About 85 percent of all Canadians live within a 15-minute drive of a Canadian Tire store; nine out of ten adult Canadians shop at one of these outlets at least twice a year; and 40 percent of Canadians shop at Canadian Tire every week. The company also offers online shopping via the Canadian Tire web site and runs the 40-unit PartSource automotive parts specialty chain. The Canadian Tire Petroleum unit is the nation's leading independent retailer of gasoline with about 250 gasoline filling stations, some of which include a convenience store and/or a car wash. Canadian Tire Financial Services finances and manages the Canadian Tire Options MasterCard program, which has more than 3.1 million cardmembers; markets insurance and warranty products; and offers emergency roadside assistance through the Canadian Tire Auto Club. The company also owns Mark's Work Wearhouse, operator of around 320 men's and women's clothing stores, including approximately three dozen L'É quipeur stores in Quebec; these outlets specialize in business casual and weekend clothing and workwear. Canadian Tire Corporation is a true national institution, so much so that it issues its own "money," was celebrated on a Canadian postage stamp, and has won the nation's highest honor, the Order of Canada. Martha Billes, a daughter of one of the company cofounders, is the controlling shareholder, owning a stake of more than 60 percent.

Early History

Canada Tire was started in 1922 by brothers John W. and Alfred Jackson (A.J.) Billes. The budding entrepreneurs invested their combined savings of CAD 1,800 in an automobile service garage and auto parts depot in Toronto. The company—Hamilton Tire and Garage Limited—stocked a small inventory of repair and replacement goods, including tires, batteries, and automobile fluids. Although the automobile industry was still in its infancy, the Billeses believed surging automobile sales at the time indicated a bright future for their business. Later that year, in fact, Toronto hosted its first "Closed Car Show," in which windshield wipers, automatic starters, and other new car parts were introduced.

The Billeses experienced what could have turned out to be a major setback shortly after they opened their shop: A bridge that routed traffic past their garage was shut down for repairs. To overcome the problem, the brothers converted the garage into an overnight parking facility and took turns sleeping in the garage at night. Then, early in 1923, they moved the entire operation to a better location. The new shop included retail goods and a gas pump. The success of that outlet encouraged the Billeses to open a second retail store nearby. Early gains were largely attributable to A.J.'s marketing savvy. He began offering free road maps in the company's promotional flyers, for example, because maps were rare at the time and valued by customers.

In 1927, after four years of rising sales, the Billeses changed the name of their enterprise to Canadian Tire Corporation, Limited. That same year, A.J., building off of his successful road map idea, decided to test a mail-order offer to car owners in southern Ontario and New York state. Response to that effort, in turn, led him to publish a full catalog in 1928 that featured Canadian Tire's retail offerings and allowed customers to order by mail. Thus, the company became a pioneer in the mail-order and catalog auto-parts retailing industry. Indeed, Canadian Tire's mail-order sales swelled in the late 1920s and early 1930s. Even during the Great Depression the company continued to post gains as a result of its low prices, high-quality merchandise, and an emphasis on customer service. Importantly, shrewd marketing always played a role.

Throughout the 1930s and into the 1960s, in fact, Canadian Tire was a leading innovator in its industry. Among A.J.'s most brilliant marketing schemes was Canadian Tire "money," an innovation he concocted in the 1950s. A.J. knew a lot of money could be made from the sale of gasoline from his store pumps. Because of pressure from the big oil companies, however, retailers such as A.J. were unable to lower their prices to undercut competitors. A.J. got around that hurdle by giving his gas customers coupons that they could use for merchandise in his stores. The scheme was a major success and continued to be used, in some form, for several decades. Another of A.J.'s innovations was clerks on roller skates. When A.J. expanded one of his stores into a vacant supermarket he became concerned that the longer aisles would slow down his clerks. Besides speeding up the clerks, the roller skates served as an entertainment gimmick that drew customers.