Steinberg's (supermarket)

This article is about the Canadian grocery store chain. For the American electronics store chain, see Steinberg's (electronics store).
Steinberg's
Private
Industry Supermarket
Fate Bankruptcy; supermarkets sold to IGA, Metro, & Provigo
Founded 1917
Defunct 1992
Headquarters Montreal, Quebec, Canada
Products Bakery, beer, dairy, deli, frozen foods, general grocery, liquor, meat & poultry, pharmacy, produce, seafood, snacks.
Subsidiaries Miracle Mart (Became M Stores in 1986)
Les 5 Saisons
Valdi Foods
Cardinal Distributors
Pik-Nik
Ivanhoe
Miracle Food Mart

Steinberg's (renamed Steinberg in 1961) was a large family-owned Canadian grocery store chain that mainly operated in the province of Quebec and later Ontario. In addition to its flagship supermarket chain, the company operated several subsidiaries across the country. The company went bankrupt in 1992, three years after being sold to private interests, after 75 years in business.

Beginning

Steinberg's began as a grocery store founded in 1917 in Montreal, Quebec, Canada by Jewish-Hungarian immigrant, Ida Steinberg. Her five sons, led by Sam Steinberg, grew the company from a tiny storefront on St. Lawrence Boulevard into the most popular and largest supermarket chain in Quebec.[1] It was the first to create the "supermarket" concept in Quebec, in 1934, with expansions into Ontario (primarily the Ottawa area) and parts of New Brunswick.[2]

Expansion

Steinberg's opened more stores in Montreal and Quebec over the years, expanding from the single little grocery store. Steinberg's eventually entered the real estate market in 1952 under the name Ivanhoe Investments and owned several shopping centres. During the expansion years, the plan was to landbank properties in Quebec for future development into shopping centres and stores. Ivanhoe turned out to be one of Steinberg's most profitable ventures and still exists today under the name Ivanhoe Cambridge. Steinberg's also had holdings in food production and distribution.[3]

In keeping with increasing French language pressures in Quebec, Steinberg's dropped the possessive "'s" from its name to become "Steinberg" in 1961. This was accompanied with the introduction of a new logo as shown above this article (the previous logo had consisted of Sam Steinberg's personal signature). Despite the change, the chain continued to be referred to as "Steinberg's" among the English-speaking public and media throughout its history and beyond.[4]

Sam Steinberg

For several decades, and until the late 1980s, Steinberg's was the largest supermarket chain in the province of Quebec. Store outlets could be spotted in nearly every district of the island of Montreal and was a major competitor for chains like Provigo and Metro. Sam Steinberg was one of the first employers to implement mandatory bilingualism (English and French) for all his personnel and as a result, the company became so entrenched in Quebec culture that among French speakers, "Je fais mon Steinberg" ("I'm doing my Steinberg's") became a synonym for going grocery shopping, regardless of supermarket chain.

In 1959, Steinberg's made its expansion west of Ottawa into Ontario by acquiring Grand Union's 38 stores. The branding of Steinberg's Ontario's supermarkets was changed in the late 60's to Miracle Food Marts outside of eastern Ontario, some operating next to a Miracle Mart department store. Miracle Ultra-Mart stores were introduced in the mid 80's, a new food and drug store chain. The main warehousing and administrative offices were in Rexdale (Etobicoke, part of present day Toronto). The Ottawa, Cornwall and Brockville stores were part of the Quebec division rather than the Ontario division.

At one point a hypermarket was introduced called Steinberg Beaucoup, which consisted of a Steinberg's grocery, a Miracle Mart department store and Le Quick and Pik-Nik restaurants, all under the same roof. In Ontario, they were opened as "Miracle Beaucoup" stores with Miracle Food Mart as the grocery store. The first two Beaucoup stores were opened in Laval, QC and Bramalea ON.

Steinberg's owned and operated several well-known businesses aside from their own name-brand supermarket chain:

In addition, Steinbergs had partial ownership of:

Decline

A few signs of Steinberg's past remain, such as this logo on the floor at the entrance of a former store in Montreal which is now operated by the Metro supermarket chain.

Trouble started brewing for the chain after the death of Sam Steinberg in 1978; his laissez-faire dealings with the union and lack of a succession plan for the company began its decline, and resulted in a trend of higher unionized labour costs than other unionized and non-union supermarkets, and a general loss of direction of the company without its former leader. Things worsened rapidly when a power struggle developed between his daughter Mitzi, her husband Mel Dobrin, daughter Marilyn Steinberg Cobrin and daughter Evelyn Steinberg, who all had trusts established with equal controlling shares in the company (but whose shares along with their mother Helen's were stipulated to be voted together as one, to keep control of the company in the family).

After a number of years under lackluster leadership, Irving Ludmur, a former Steinberg's real estate vice president who worked with the company from 1957 until going off to start his own real-estate company in 1971, became CEO in April 1984 in an attempt to reinvigorate the company and give it some direction following the chaotic years since Sam's death. He had previously rejoined real-estate branch Ivanhoe in 1983, and had become close to Sam during his initial years at the company. He initiated sweeping changes throughout the company, resulting in improved sales, stock prices, and a general all-around improvement in Steinberg's, making it more attractive on the stock market.

By the end of the 1980s, family infighting, power struggles, rising costs and increased competition were taking their toll, and Steinberg's was placed on the auction block for an estimated $1.5 billion. The Ontario-based Loblaws chain initially attempted to acquire Steinberg's, a move blocked by the Quebec provincial government on nationalist grounds. Other potential buyers included Toronto-based Oxdon Investments, Oxford Development, Metro-Richelieu, Provigo, and even a leveraged buyout from company executives Irving Ludmur and Arnold Steinberg. In the end, the company was sold for $1.3 billion on August 22, 1989 to a joint bid between Socanav (a marine shipping firm with no experience in retail, and whose major shareholder Michel Gaucher helped set up the deal) and the Caisse de dépôt et placement du Québec, Quebec's pension-fund manager.

Under Socanav's ownership, Steinberg's saw its first ever locations that were run as franchises, a practice historically reserved for smaller Quebec grocery chains such as Metro-Richelieu and IGA. The company could save on labour costs as those stores could employ non-unionized labour paid at lower wages than Steinberg's company-operated stores.

M stores logo

End of Steinberg's

The buyout of Steinberg's was highly leveraged, regarded by some as the highest leveraged buy-out in Canadian history at the time. Despite improved profitability and cash flow results from Steinberg's after the buyout, various parts of the company were auctioned off by new owner Socanav to help pay down the heavy debt load incurred. The Caisse de dépôt et placement du Québec wanted Steinberg's real estate arm Ivanhoe for its attractive portfolio from the start, and acquired it for $887 million in 1990. Steinberg's 50% stakes in both Lantic Sugar and Price Club were sold in 1990 for $110- and $58-million respectively.[5] After ongoing talks, A&P Canada agreed to buy the Ontario operations (consisting of 58 Miracle Food Marts, 11 Miracle Ultra-Marts, and Ontario divisional offices in Etobicoke) in July 1980 for $235 million, with the closing date of October 20, 1990. The stores continued to operate under their former names, but were eventually rebranded under the "A&P" and "Dominion", and Ultra Mart/Ultra Food & Drug banners.

The final 10 Ontario stores in the Ottawa, Cornwall and Brockville locations (not included in the sale to A&P since they were all part of the Quebec division) were bought by Loblaws (under National Grocer Co.) in January 1992 and either converted to "Loblaws" or "Your Independent Grocer" banners, or closed outright. The sale included two operating as Xtra discount supermarkets. Those were the final stores Steinburg's owned in Ontario, aside from 74 Valdi stores that the chain held onto (a combined 101 in Ontario & Quebec).

An old Steinberg's sign outside a store in Montreal now operated by the IGA supermarket chain.

Attempts to sell off more assets and restructure the company (including rebranding some stores and franchising others) were difficult, due to Steinberg's higher labour wages, the 1990-1992 recession, suppliers unsure of supplying the highly leveraged company, pressure from creditors, mounting losses and interest payments on debt from the leveraged buyout. In May 1992, court protection was obtained in order to liquidate the company and pay off creditors. Loblaw again attempted to buy the chain. They were again foiled by the Quebec government, who arranged for Steinberg's stores to be sold off to its two major local competitors Metro Richelieu and Provigo. To avoid accusations of monopoly, Metro and Provigo sold some Steinberg's stores to The Oshawa Group (IGA).

By June 1992, Steinberg's and its poor-performing department store chain M disappeared, as the Steinberg's stores were absorbed and converted by its competitors, and the M stores were closed. Valdi Foods remained a company subsidiary until the stores in the western provinces were closed in 1991/92.

Although Steinberg's, Miracle Mart/M, Miracle Food Mart, Valdi and Cardinal Distributors are now defunct, Sam Steinberg is survived by two of its companies which are still in business today. The first is his real estate company Ivanhoe (which absorbed Cambridge Shopping Centres Ltd in 2001 to become Ivanhoe Cambridge). The second is Pik-Nik, his restaurant chain founded in 1966, that was sold off to startup investment firm Cleman Ludmur Steinberg Inc. (founded by former Steinberg executives Arnold Steinberg, Irving Ludmur and Bill Cleman after they left the company).[3]

Michael Steinberg, a grandson, opened a health and local produce-oriented grocery store in 1973.[6] The "Herb and Spice Shop" expanded and declined and now consists of two Ottawa locations with the same name but different businesses.

Succession for the Steinberg's grocery chain was the subject of a 1974 National Film Board of Canada documentary by Arthur Hammond entitled After Mr. Sam.[7]

See also

Wikimedia Commons has media related to Steinberg's (supermarket).

References

  1. ↑ DeWolf, Christopher (April 18, 2007). "Yiddishkayt and Soviet Spies: Life on the Main". URBANPHOTO. Retrieved 2009-06-13.
  2. ↑ http://www.thecanadianencyclopedia.com/index.cfm?PgNm=TCE&Params=A1ARTA0007691
  3. 1 2 3 Funding Universe.com
  4. ↑
  5. ↑ Toomey, Craig (9 May 1992). "Sale of Steinberg stores could come in week". The Gazette [Montreal QC].
  6. ↑ http://www.foodnetwork.ca/Pages/Community/BlogPost.aspx?id=22366
  7. ↑ Hammond, Arthur (1974). "After Mr. Sam". Documentary film. Montreal: National Film Board of Canada. Retrieved 17 September 2012.
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