Saks Fifth Avenue's Canadian stores will feature large upscale food departments, modelled on the food hall at London's iconic Harrod's department store. Toronto will become home to the world's first Saks food hall, and it's expected to open in the fall of 2015 within the new Saks Fifth Avenue store at the Toronto Eaton Centre. Other Canadian locations will follow.
It's by no accident that Canadian Saks stores will feature Harrod's-like food halls: Saks' new CEO, Marigay McKee, was 'chief merchant' at Harrod's before joining Saks in September of 2013. Food halls will differentiate Canadian Saks stores from competitors Holt Renfrew and Nordstrom. The Canadian food halls will be unique to the company as well: currently, no other Saks stores carry extensive food offerings.
The Hudson's Bay Company's CEO Richard Baker estimates the size of Saks' food halls to be approximately 25,000 square feet. A second 25,000 square foot Saks food hall is expected to open in 2016 within a 132,000 square foot Saks Fifth Avenue store at Toronto's Sherway Gardens shopping centre. Subsequent Saks locations are expected to be announced for Montreal, Vancouver, and possibly Calgary.
The 25,000 square foot Saks food departments will be similar in size and, in some cases, larger than some urban grocery stores. Many Downtown Toronto grocery stores are smaller than what Saks has proposed (for example, McEwan's new Downtown Toronto grocery location will be only about 9,000 square feet). Downtown Vancouver's three Urban Fare grocery stores are each about 20,000-25,000 square feet. Montreal's recently opened Marché Adonis is only 14,000 square feet, while its new Les 5 saisons store is almost 10,000 square feet. We can expect prices to differentiate the Saks grocery stores from the competition: Saks will no doubt be more expensive. As a tradeoff, however, we may expect a high level of service and beautiful store interiors at Saks's new Canadian food halls.
These food halls will immediately differentiate Canadian Saks stores from their American counterparts. There are currently no food halls in American Saks stores, though that may change under the direction of Marigay McKee. Finding approximately 25,000 square feet of space within existing American Saks stores will be a challenge; if Saks replicates its Canadian strategy, some American Saks stores may have to expand in size to accommodate food halls.
Harrod's food hall features fresh meat and seafood, fine chocolates and desserts, cheeses, baked goods, prepared foods, other miscellaneous food items (including packaged items and its popular hampers) and fine wines. Wine and alcohol sales at Canadian Saks stores will likely be dictated by provincial liquor laws.
It will be interesting to watch if Canadians embrace Saks Fifth Avenue's new luxury food halls, and it will also be interesting to see how competitor Holt Renfrew reacts. Rumour has it that Holt's could expand further into food offerings as well, and we'll provide further details when permitted. Holt's will have to act quickly, however, as Saks' first food hall is expected to open in September or October of 2015 within the Hudson's Bay building at the Toronto Eaton Centre.