Summary Annual Report - Northern Stores

8/2/2019 Summary Annual Report - Northern Stores

1/24

More growth in store

Th NoTh WsT CompN iNC. 2010 mmy l p


2/24

ear nded year nded year nded

($ in thousands, excet er share inoration) Janary 31, 2011 Januar 31, 2010 Januar 31, 2009

sulTs Fo Th

aes $1,448,104 $ 1,444,366 $ 1,392,634

ae store saes % increase 1 2.7% 0.1% 2.7%

rading roft 2 (earnings beore interest, incoe taxes and aortization) $ 125,302 $ 130,274 $ 122,257

arnings beore interest and incoe taxes 2 (BI) 89,810 95,124 90,203

et earnings 76,594 81,813 75,378

Cash ow ro oerations 2 113,076 116,486 106,324

FiNNCil posiTioN

ota assets $ 620,482 $ 623,800 $ 609,173

ota debt 192,596 209,170 213,026

ota equit 302,497 289,926 274,410

FiNNCil Tios

Debt-to-equit .64:1 .72:1 .78:1

eturn on net assets 3 17.5% 18.7% 19.8%

eturn on average equit 25.8% 29.3% 28.6%

aes bend: Food 76.0% 77.0% 75.0%

Genera merchandise 20.0% 20.0% 22.0%

ther 4.0% 3.0% 3.0%

p sh ($) DiluTD4

rading roft $ 2.58 $ 2.69 $ 2.52

et earnings 1.58 1.69 1.56

Cash ow ro oerations 2.33 2.40 2.20

market rice Januar 31 21.09 17.94 16.14 high 23.00 19.60 19.99

ow 17.02 14.88 13.00

currenc fgures in this reort are in Canadian doars, uness otherwise noted

Cash Distributionsper nit Diuted ($)

1.50

1.25

1.00

0.75

0.50

0.25

0.00

1,500

1,250

1,000

750

500

250

0

aes($ in iions)

20 06 2007

1,448

2009 20102008 2006 2007

1.42

2009 20102008

150

125

100

75

50

25

0

200 6 20 07

125

2009 20102008

1 ae store saes, excuding the oreign exchange iact, on an equivaent ear basis

2 ee on-Gp easures section on age 26 in the nnua Financia eort which is avaiabe through D at www.sedar.com

and the Coans website at www.northwest.ca

3 arnings beore interest and incoe taxes as a ercent o average net assets eoed

4 ective Januar 1, 2011, orth West Coan Fund converted to a share cororat ion caed he orth West Coan Inc. he coarative inoration

reers to the units o the Fund. er unit inoration has been restated to reect the three-or-one unit sit that occurred on eteber 20, 2006.

2010 FICIl IGlIG

945

1,393

1,064

1,444

107

96

130122

0.80

1.40

1.13

1.39

rading proft 2($ in iions)


3/24

last ear, we unveied our ans to increase saes and

roftabiit b investing ore in our eoe and in

the wa we do business in our stores and distribution

networks. his reort suarizes our rogress on this

core work and exains how we are setting the oundation

or even More Growth in Store during the ears ahead.

Even moregrowth in store

2010 W Cmpy IC.

(et to right) mariee Chares, Front nd manager at C Vaue Center,

Kawock, aska; da Coons, Grocer manager, Giant iger, Cagar,

berta; and Donna Xavier, Vaut Cerk, and Jonathan Xavier Jr. at

Cost--less in t. hoas, .. Virgin Isands.


4/24

t. maarten

Caribbean

Curacao

Grand Caant. hoas

t. Croix

Pacic Ocean

auning (Gua)

Dededo (Gua)

uva

erican aoa

Kaaa (awaii)

io (awaii)

onora

2010 evenue b Banner($ in iions)

$573Northern $285

Giant Tiger

$177AC Value

Center

$261Cost-U-Less

$44Other $108

North

Mart

230 Locations

6,902 Employees

$1.448 Billion in Sales

1 Incudes Quicksto stores

2 Incudes Vau lots, oo market, Fur marketing outets and a Drug tore

12 Ct-u-le d-zed

waree tre oer

discount ood and genera

erchandise roducts

to isand counities in

the outh pacifc and

the Caribbean.

1 iand Fre serarket

is a neighbourhood store

oering convenience with

an ehasis on resh and

reared oods.

34 Gant Tger jnr

dcnt tre

oer ai ashion,

househod roducts

and ood to urban

neighbourhoods, and

arger rura centres in

western Canada.

33 C Vae Center tre1

are siiar to orthernand orthmart, oering

a cobination o ood

and genera erchandise

to counities across

reote and rura regions

o aska.

7 Nrtmart tre

are targeted at arger

northern arkets with

an ehasis on an

exanded seection o

resh oods, ashion

and heath roducts

and services.

17 Qckt tre2 are

convenience stores that

oer read-to-eat oods,

etroeu roducts and

reated services.

126 Nrtern treoer a cobination

o ood, fnancia

services and genera

erchandise to reote

northern Canadian

counities.

The North West Company is a leading retailer of

food and everyday products and services to rural

communities and urban neighbourhoods in Canada,

Alaska, the South Pacic and the Caribbean.


5/24

* eote arket banners incude orthern, orthmart, C Vaue Center and

Cost--less which coective reresent 81% o orth Wests tota saes

An extraordinarycommunity store positionmore than 90% o househods served b our

reote arket banners* sho in our stores ever

onth, which aows us to be a trusted oca choice

or a wide range o roducts and services.

87%

90+%

85+%

7.0%EBITDA CAGR

A growing focus on everyday needs87% o our saes are derived ro ood and reated

everda iving roducts and services, a ocus that

essens orth Wests exosure to the voatiit o

discretionar sending in diicut econoic ties.

1.5T I M E S

Positive market fundamentalsur arkets are hoe to ounger, aster-growing

ouations with stabe incoes tied to consistent

eves o governent unding, and incoe growth

ro resource deveoent. he ouation

growth in our reote arkets is 1.5 ties greater

than the nationa averages in Canada and the

nited tates.

Leadership in hard-to-serve,remote marketsmore than 85% o our reote banner* stores are

a two-hour drive or arther ro the big box

stores that doinate urban arkets.

A strong financial positionWith strong, reiabe cash ows and rudent eves

o debt, we invest to sustain and grow whie returning

aroxiate 50% o our cash ow to investors

ever ear. rading roit (BID) at orth West

increased ro $63.9 iion to $125.3 iion during

the 10 ears ending Januar 31, 2011, a coound

annua growth rate o 7.0%.

A proven record of value creationhares in orth West have roduced a coound

annua return o 26.1% over the ast 10 ears.

$10,000 investent in orth West at Januar 31,

2001 was worth $101,711 at Januar 31, 2011.

$101,711

$10,000GROWS TO

Why invest in North West?

2010 W Cmpy IC.


6/24

2010 was a transition ear or orth West in an resects. t ear

end we changed the Coans structure ro an incoe trust to a

share cororation. ur More Growth in Store work oved ro anning

and testing to aking an iact at store eve and heed deiver

industr-eading ood saes growth in our northern banners. We aso

invested signiicant tie sizing u oortunities or iroveent to

our su chain, esecia our outbound ogistics. his work coincided

with ajor changes to the Canadian governents transortation subsid

rogra or nutritious erishabe oods sod in the orth.

pID & C mG

More Growth in Store is much more than a tagline at North West.Last year it symbolized our continuing shift to becoming a more

customer- and process-focused retailer. The initiatives that are

described in this report will give you a sense of the real benefits

we are getting from digging deep into key areas of our business

that received too little of our time in the past.


7/24

t heart, More Growth in Store is a reositioning o orth Wests core

abiities that wi utiate ake us an even ore coeing store to sho

at and coan to invest in. he ost iortant accoishent on this ath

in 2010 was a growing sense o urose and conidence as this work deiveredresuts across the organization. his ear, we have the beneit o exerienced

teas who have earned where to ook to ind unreaized vaue and how to get

these new aroaches into our stores and in ront o our custoers.

s we ade exciting rogress on More Growth in Store, we aced one o the ost

varied econoic and coetitive ciates in recent ears. ura aska and

northern Canada regiona GDp was u shar ater a suggish 2009. he iars

o incoe growth were governent stiuus and natura resource investent

and we were in a great osition to cature the boost in discretionar consuer

sending. ur orthmart, orthern and C Vaue Center banners that

caitaized on this oortunit aso beneited the ost ro our erishabe

and in-stock erorance iroveent work and this heed deiver

industr-eading ood saes gains.

ur Giant iger and Cost--less banners were at the other end o the sectru.

t Giant iger, we ost ground to our arger discount coetitors who continued

to add new sace and drive down argins through ore aggressive rootiona

ricing. Whie we staed coetitive with our rices, we wi need to be better

at standing out this ear through an iroved ashion aare seection and

b giving our custoers ore o the treasure hunt ites that Giant iger is

unique known or.

Cost--less was our one banner that continued to see weak consuer

sending in its arkets. ouris nubers were u odest ro their ow

oint in 2009, but on-isand sending did not rebound at the sae ace due to

the ower incoe roie o new visitors. s a resut, oca uneoent ratesreained stubborn high. gainst this backdro, Cost--less hed its osition

as a trusted store or vaue aidst an intense coetitive environent that, ike

Giant igers, ut heav ressure on argin rates. B ear end, argins were

iring u and our rootiona and seasona activit was roducing odest

saes gains. his ear our riorities are to introduce ore ower-cost ood ites

into Cost--less ix and to soidi our eadershi osition in erishabe

quait, whie deivering returns ro our More Growth in Store work.

he contribution ro our northern banners ore than oset the erorance

at Giant iger and Cost--less and, i that had been the entire stor, we woud

have deivered a botto ine increase ast ear. nortunate, we aso incurred

$3.2 iion in unusua costs ost reated to higher ension exenses

that wi start to dro in 2011, with the reainder due to the cost o our

conversion ro an incoe trust. ore concern was our aiure to execute

on the integration o our two whoesae businesses in aska and ongoing

oerating cost chaenges with our Winnieg and new donton distribution

centres. We wi recover ro these two setbacks and what we have earned

ro the has aread been addressed through our More Growth in Store

initiatives. Whie I cant roise we wont ake istakes, I can assure ou

that we wont a short again ro ack o rearation.

dward Kenned visits custoer Goria Kowtak

and her chidren at Gorias hoe in ankin Inet,

unavut. orer teacher, Goria works at the

unavut literac Counci.

2010 W Cmpy IC.

went-year aes istorJanuar 31, 1991 Januar 31, 2011 ($ in iions)

Canadian erations Internationa erations

1,500

1,250

1,000

750

500

250

0

94 96 04 1008 09060298 0092 9591 97 05 070399 0193


8/24

here were aso transitions within our senior anageent

tea in 2010. s earier announced, lo Charrire, our CFor the ast seven ears, retired in June and was succeeded b

John King, our Vice-president, Finance with 16 ears o inance

and accounting exerience at orth West. oe o los

non-inance roes were assued b Craig Giin who joined

orth West in march 2010 as Chie Cororate icer. Craigs

ost recent osition had been president o obes ntario.

mike orobe joined orth West at the sae tie as our

new Vice-president o logistics and u Chain ervices,

reorting to Craig. Both o these iortant additions have given

us the ocused eadershi needed to address our su chain

chaenges and oortunities.

t the end o march 2011, Karen miani, Vice-president, uanesources, et orth West ater an accoished 14-ear career

with us. Karens ast ajor contribution, aong an, was the

design and deiver o our high accaied Leadership@North

West earning rogras across the organization.

he near uture in Canadian retai roises to be ore voatie

than at an tie over the ast 20 ears. more new seing

sace and ore new orats wi coete or saes ro a

consuer chaenged b sow incoe growth and high debt

oads. t orth West, this is the tie when we can stand

out as a retaier with deeer-than-ever skis at seing to

hard-to reach custoers.

pID & C mG

Darrin Bungua, a baker at our orthern store in ankin Inet,

ees our custoers suied with a wide seection o

esh-baked breads and astries.

In 2012, The North West Company will celebrate a

remarkable 25 years as an independent company.

With this milestone in reach, I can only thank ourenergized people who have worked with more skill

and commitment than ever over the past year.


9/24

I a conident about what we can inuence, starting with

knowing our custoers better and our assion or asteringthe unique crat o retai that draws on the egac o the

enterrising erchants who have receded us.

In 2012, he orth West Coan wi ceebrate a rearkabe

25 ears as an indeendent coan. With this iestone in

reach, I can on thank our energized eoe who have worked

with ore ski and coitent than ever over the ast ear.

he are the enduring and distinct advantage that akes us

worth o the continued suort o our custoers and the

counities we are rivieged to serve.

dward . Kenned

president & C

ri 6, 2011

he initiatives described in this ears annua reort

share one coon goa to deiver substantia orevaue to our custoers b running a better business.

We are conident that this is the right direction or

orth West toda, but we aso know that successu

reaching our destination requires ore than a good

road a. It takes the ski o eaders at a eves, uing

together with a coon understanding and urose.

wo ears ago, we introduced Leadership@North West,

starting with our executive and senior anageent

teas. Leadership@North West teaches roven

ractices that are based on the core rincies we

subscribe to: custoer driven, accountabiit, trust,

assion, enterrise and ersona baance. ogether,these rincies reect what we stand or and what

it takes to reaize our otentia as a business and

as individuas. In 2010 and ear 2011, we cascaded

Leadership@North West to over 300 anagers in store

suort ositions and ebedded our rincies and

ractices into interna counications, huan resource

rogras and other asects o our business.

his ear, eadershi teaching is roing out to store

anageent through a ractica, cassroo- and web-

based earning initiative caed Managing@North West.

he rogra incororates rea, everda chaenges to

deonstrate how new business toos and rocesses can

be used to irove anning and deiver better resuts.

bove a, Managing@North West is eant to reinorce

how being better at what we do rootes the interests

o everone touched b our business, starting

with our custoers.

Leadership@North West

2010 W Cmpy IC.

Derek eier, Canadian erations Controer,

and Cae outo, Categor manager, are two o

the dozens o orth West anagers who have

now graduated ro Leadership@North West training.


10/24

Direct feedback from our customers is the foundation of

our selling strategies going forward we are listening

better than ever and bringing to our markets more

quality products from the brands they expect.

Brett Hargreaves, Category Manager, Entertainment, Media & Ofce Supplies

ans rnodt, Deartent manager o etai, and

Categor manager Brett argreaves know whats

ouar with custoers ike Jaese iusuagnar

and lero Kaunak in the counit o ankin Ine


11/24

2010 W Cmpy IC.

More Customer InsightMore growth from existing stores depends on a

deep understanding of the people who matter most

to North Wests success our customers.

What we ca community retailing at orth West is a about the reationshis

between our stores and the riends and neighbours we serve ever da.reendous insight into custoer needs and exectations can be drawn

ro these reationshis and we recognize ore than ever the iortance

o earning and caring about our custoers. he groundwork or our

custoer insight initiative began in 2009 with innovative research into our

custoers attitudes and buing reerences. last ear, we buit on this

oundation b aking in-hoe and in-store interviews art o ever store

working tri or visit undertaken b our anageent tea. Further insight

into shoing behaviour is ongoing based on what dierent custoers

actua bu. nd this ear, we are getting even coser to our custoers

through socia edia and other web-based touch oints.

What weve earned so ar is enabing our arketing and erchandisecategor anagers to get ore saes b creating roduct oerings that

better reect the distinct and utie needs within each custoer

househod. Getting this work right reresents an enorous oortunit

to enhance custoer oat, increase basket size, gain arket share and

becoe an even ore integra art o the counities we are rivieged

to serve. nd it a sti begins with the riend, wecoing reationshi

that we bring to our custoers ever da.

Categor manager d lindquist shows o one o our excusive

Northern Expedition bicces to orthern store eoee Ke low

Intiate knowedge o our custoerseads to saes growth

Keeping in close contact with

store staff and customersgive

us the opportunity to ensure w

develop assortments that mee

customer needs and wants on

current trends.

Ed Lindquist, Category Manager, Toys & Seasonal


12/24

Leveraging technology to deliver

information when ordering decisions

are made is creating higher rates

of product availability and improved

inventory management practices.

Michael Beaulieu, In-Stock Project Lead

Iroved roduct erorance eads to increased returns

More Product In-Stock

n et sace on the she is never a wecoe sight. s a

counit store serving towns and neighbourhoods with

iited oca shoing choices, we are counted on to deiver

consistent, no atter what. For us its a atter o trust.

n et sace is aso a ost saes oortunit. t orth

West, better in-stock erorance reresents our greatest

untaed oortunit or revenue growth.

In the ast, a big reason or stock-outs was ack o visibiit

into where we were out o stock and wh. In the ast ear,

we invested in inoration sstes to better track zero

saes data on ast-oving ites. We aso deveoed

iroved saes oor reorting and ordering toos to

he our store eoe understand and ix high stock-out

situations. hese changes, cobined with a coan-wide

ocus on iroveent, have roduced draatic resuts.

In-stock erorance iroved b 38 ercent ater the

a aunch o this initiative, heing to drive sae store

ood saes growth in our northern banners to soe o the

highest eves seen in orth erica ast ear. nd the

best is et to coe.

B the idde o 2011, we exect 95 ercent o our

store ood order voue to be owing through a

technoog ator that wi give us unrecedented

insight into the oveent o roduct throughout our

network. his wi enabe coaboration with store

anagers in rea tie to eiinate stock-outs and

continuous reine our inventor reenishent and

erchandising ractices. he sae technoog wi

drive urther iroveents in non-ood erchandise

categories as we as deiver better assortent contro

and vendor cost anageent.

Making certain that our customers favourite products are always

in stock is the surest way to grow sales and loyalty.

michae Beauieu, In-tock project lead, and

Greg Coobs, manager o Grocer in ankin Inet,

deonstrate a hand-hed wireess scanner, art

o a new technoog ator that is enabing

better in-stock erorance and other saes

and roductivit iroveents.


13/24

More Refreshing PerformanceFrom Our Perishables

In 2009, we easured our erchandising erorance

against interna and externa bencharks as we as our

custoers exectations. ne area that rea stood out

was our resh business, which incudes produce, Dair,

meat, Dei, Baker and Food ervice areas. he resuts

werent rett. either were the surrising given the

extree weather, high energ costs and other su

chain conditions that aect the deiver and handing

o erishabe ood in our reote arkets. B the sae

token, getting these categories right reresents our

greatest oortunit or increased custoer

satisaction and argin iroveent.

produce was the starting oint in 2010. ere we

ocused our eorts on iniizing inventor shrink*

and streaining roduct assortent. like our in-stock

work, a ke ste orward was deveoing sier and

ore accurate eectronic rocesses or tracking the te,

aount and causes o unseabe roduct in our stores.

In the ajorit o our stores we shited to seing

re-ackaged roduce to iniize handing soiage

and to irove the consistenc o our overa roduct

oer. B the ourth quarter o ast ear, our action an

was in u stride and heed deiver a doube-digit gain

in produce gross roit doars.

In 2011, we wi deiver a u ears worth o gains ro

our produce business and ra u the sae te o

enhanceents in our meat and Dair categories. his

wi incude the exansion o a re-cut and ackaged

Fresh meat rogra that was successu aunched at

18 northern Canadian and 10 Giant iger stores ast ear.

iiar to our produce initiative, the beneits reaized so

ar incude reduced waste, ower abour and shiing

costs and the deiver o a consistent and high-quait

roduct.

he quait o our roduce and other resh

categories is iortant to orthern custoers

ike athan uugak and Krista asseo

2010 W Cmpy IC.

We are focused on bringing the performance of our perishablemerchandise categories, starting with Produce, Dairy and Meats,

to levels that deliver more value to our customers and to us.

*hrink is deined as ost saes due to daage, exiration-date,

thet or an other occurrence that akes a roduct non-seabe.


14/24

It is the stability of our dedicated and

competent store staffthat helps guarantee

Alaska Commercials continued success.

Walt Pickett, Vice-President & General Manager,

Alaska Commercial Company

ur veteran C Vaue Center tea in Kawock, aska

let to right: Donna Wiias, Baker/Dei manager

patt moore, Genera merchandise manager

John oeth, meat Deartent manager

Katheen Chaee, Branch manager

mariee Chares, Front nd manager

ett meton, Grocer manage

and Jose ees, produce manager


15/24

More Store Stability

Weve earned a ew things about rontier erchandising since ourdirect redecessors estabished the irst trading ost on Jaes Ba

ore than 340 ears ago. uccess in reote retaiing takes eoe

who can oerate indeendent and as ebers o the orth West

tea, whie ebracing the unique business, cutura and socia

conditions that coe with ever arket.

uccess aso takes tie. hats wh orth West introduced our

store stabiit initiative in 2010. Its aied at increasing the average

ength o tie our store anageent teas sta in osition to a

iniu o three ears. he irst hase encoassed one third

o the stores in our askan and northern Canadian network in

2010 with the reaining ocations schedued over the next two ears.

o reach our goas we are working sarter to ensure that anagers

have the right ski set, are an exceent it or their counities and

have the right suort tea to get the job done. his incudes the

addition o dedicated adinistration and erishabe anageent

ositions. hese changes are designed to irove store eicienc

whie heing store anagers send ore tie doing what the

do best getting saes, eading their teas and being active in

the counit. We are aso creating a better work exerience or

career-inded eoe who want to ake a dierence, as individuas

and as ong-ter contributors to orth Wests success. ur eorts

incude ore ora career anning and deveoent, revaed

incentive-based coensation and vauabe beneits such assubsidized ood and better quait housing. For the right individua,

store anageent at orth West is an increasing coeing

career oortunit that attracts the ver best eoe to one o the

ost rewarding and adventurous retai exeriences in the word.

(to) xecutive Vice-president michae mcmuen congratuates orthern

tore manager Beinda laert-Keand ro Fort Veriion, berta, on

her 25-ear anniversar with orth West.

(botto) ea sirit and a coective can-do attitude go ar

at store eve. ere enthusiastic sta surround orthern tore

manager err Kent, ankin Inet.

2010 W Cmpy IC.

Realizing the potential of our More Growth in Store

initiatives depends on highly capable store managers

who thrive in their roles as integral community

members and true enterprising merchants.

It takes tie to understand the unique needs o ever

counit we serve

Like snowakes, no two communiti

are identical.Our store managers

need to integrate, understand andbuild relationships over time.

That is the fundamental platform

to becoming the trusted community

store of choice.

Michael McMullen, Executive Vice-President,

Northern Canada Retail


16/24

More Advantage From Our Supply ChainThe work we are doing on one of the worlds most complex retail

logistic networks will yield substantial benefits for North West

and our customers.

like ost retaiers, orth West aces secia ogistics

chaenges ever da. What akes us dierent is the

unusua ength o our su chain. It takes just as ong

to drive a oad o resh roduce ro our distribution centre

in donton, berta to our stores in Inuvik, orth West

erritories, or exae, as it does to bring the roduce

ro the growers orchards in Forida. Distance isnt the on

chaenge, as the tri to our stores oten requires utie

odes o transortation incuding rai, air, sea, highwa and

ice-road. We ust aso contend with orbidding terrain and

excetiona harsh and unredictabe weather.

Whie we are aread rett good at eeting these

chaenges, were coitted to achieving a higher eve

o ogistics erorance whie reducing the exense o

oving roduct throughout our network each ear. We view

each o the unique conditions we ace as an oortunit

to rovide better service to our stores and ower costs or

orth West and our custoers. In 2010, we started this

initiative with a rich rewarding baseine review o the

coex reight voues and atterns within our current

network. he agnitude o this anasis has eant that

ieentation o iroveents to the su chain wi

not take ace unti ater this ear, oowing the aroach

taken in 2010 with our other More Growth in Store work

streas. he highest aback work wi deiver returns in

the second ha o 2011 and onger range initiatives wi be

deveoed or ro-out over the next two ears. he ost

signiicant iroveent wi be the design and ro-out o

an advanced transortation anageent sste which

wi rovide uch-needed visibiit into the rea tie

oveent o roduct within our transortation networks.

his inoration wi give us an unrecedented abiit to

otiize shients based on ocation, deiver windows,

roduct voues, odes o avaiabe transort and a host

o other variabes incuding weather-reated deas. qua

iortant, we be generating the erorance etrics and

other data we need to he our carriers schedue and

organize our business ore eicient.


17/24

ATLANTIC

OCEAN

PACIFIC

OCEAN

SONORA

FORT LAUDERDALE

MONTREALWINNIPEG

EDMONTON

TACOMA

ANCHORAGE

HAY RIVER

IQALUIT

THOMPSON

VAL DOR

SOUTH

PACIFIC

OCEAN

HUDSON

BAY

TO SYDNEY

A USTRA LIA

BEAUFORT

SEA

GULF OF

MEXICO

LA BRA DOR

SEA

CHURCHILL

First Air 767 in Iqauit, unavut o-oads

erchandise bound or the Iqauit orthmart.

Vice-president & Genera manager cott mcKa and

michae orobe, Vice-president o logistics & u

Chain ervices, with tore manager pau Caste at the

Feror venue Giant iger store in Winnieg.

2010 W Cmpy IC.

Speed to market is essential.

In our competitive urban markets

we continue to enhance our logisticsnetwork, ensuring our goods are on

display and into our customers

shopping basket in the quickest and

most cost-effective manner.

Scott McKay, Vice-President & General Manager,

Giant Tiger, West Store Division

utboard transortation iroveents strengthen our su ch


18/24

Our Community Promise

CmmIy C

We strive to help make a positive difference so the communities

we serve have strong futures. And as friends and neighbours we

never forget that we live here too.

Sports & Recreationorth West is an avid suorter o counit sort andrecreation rogras that he buid the skis and confdence

o oung eoe whie encouraging heath iving. B sonsoring

articiation in nationa sorts rogras and roviding

counit outh sorts teas with uniors, trave and

fnancia suort, orth West is aking such activities ore

accessibe to athetes and their counities.

Culture & Artsorth West has a ongstanding reutation or rooting the

cuture, heritage and artistic exression o the northern

counities we serve. hrough the reservation o anguages

and counit traditions, to the suort o art estivas and

outh art rogras, orth West takes an active art in heing

our counities reserve where we cae ro and suorting

where we are going.

Healthy Livingutrition and heath are at the oreront o causes iortant to

orth West. ur ai is to create a ositive environent that

rootes heathier iestes or eoees and counit

ebers aike. his is accoished through a growing eath

ating rogra which is directed b our own coan dietitian

and adinistered in artnershi with nationa organizations

such as the Canadian Diabetes ssociation.

orth West has awas beieved in suorting the counities

that have heed ake us a roserous and growing coan.

ur coitent to act as a resonsibe cororate citizen coud

be seen on an ronts during the ast ear, ro our roe as

a ajor oca eoer, taxaer and urchaser o services to

our continuing suort o the an worth causes in our

counities. We were aso roud to undertake severaiortant initiatives that are iniizing the environenta

iact o our store and distribution networks.

A Positive Economic Force orth West has a ositive

econoic iact on the counities we ca hoe in

northern Canada, aska, the Caribbean and the outh

paciic. In tota, we eo ore than 4,500 eoe with

annua aro costs o $102 iion. orth West has ore

than $392 iion o caita invested in the retai oerations

that serve these counities and in 2010 we sent

$60 iion to urchase oca goods and services.

ur iact is greatest in Canadas orth. We are the regions

argest oca eoer with ore than 3,000 eoees and

an annua aro exceeding $65 iion. We are aso the

argest eoer o First ations and Inuit eoe in Canada.

In addition, we aso urchase goods and services o

aroxiate $34 iion in these counities annua.

Helping Our Communities orth West devotes aroxiate1.5% o net earnings each ear to suort sorts and recreation,

cuture and arts, heath iving, education and sustainabiit.

hese activities a share a coon goa o heing to ake

the counities we ca hoe in Canada, aska, the outh

paciic and the Caribbean better aces to ive, work and a.

In reote counities with iited resources, we can be

counted on to ake a dierence. ach o our stores works

cose with oca eaders and residents and artners with

organizations to deveo and suort taiored rogras that

it their unique requireents.

orth West contributed $1.28 iion or about 1.5% o

net earnings to suort a wide range o worth causes

in our counities.

37%Culture & Arts

9%

10%Healthy

Living

21%Education

8%

Environment &

Sustainability

Community Support(% o cororate donations in 2010)

15%Other

Sports &

Recreation


19/24

2010 W Cmpy IC.

orth West beieves in suorting our oca

counities everwhere ro aska and the

Canadian north to the outh pacifc and the

Caribbean. you can earn ore about our activities

in the new regiona Our Community Promise reorts

avaiabe on our website www.northwest.ca.

Curacao Adoption Program

he Cost--less in Curacao,

etherand nties adoted the

Casa manita orhanage 34

bos and girs aged 4 to 15. he

store donated books to start a

ibrar, organized cean u

events and heed raise unds

or a resh coat o aint.

Batting Against Breast Cancer

hrough this annua so-itch

tournaent, hed throughout

the prairies and W regions,

Giant iger eoee vounteers

have heed the Canadian

Breast Cancer oundation

raise $183,000.

Sand Points Annual

Silver Salmon Derby

and point, aska ceebrates

ever labor Da b raising unds

through contests or various

counit organizations.

he C Vaue Center tea is a

ajor contributor and suorts

oca outh through their eorts.

Day of Caring

red with sades and rakes,

140 orth West sta ebers

in Winnieg were rovided with

an oortunit to see what their

donations to the nited Wa can

accoish in their counit.

Road Hockey Rumble

For fve ears, the orthe

store in Gjoa aven, un

has sonsored the orthe

metdown treet ocke

ournaent. he tourna

encourages hsica activ

and good sortsanshi;

its aso great un.

making a dierence in the counities we serv

alaskaCommunItyreport

OurCommunityPromise

NuNaVuTCommunItyreport

OurCommunityPromise

Environment & Sustainabilitys a resonsibe cororate citizen, orth West shares

societs concerns or the heath o the environent.

We are taking the initiative to oerate our business in

the ost sustainabe wa ossibe and are doing our

art to rotect our environent or uture generations.

ur eorts to iniize orth Wests environentaootrint can be seen in a wide range o activities ro

annua counit cean us, to the reinvestent o a

astic bag ees into counit-rioritized environenta

initiatives, to the aunch o a subsidized reusabe bag

rogra, to incororating higher energ and environenta

standards in buiding renovations, to artnering with

industr environenta organizations.

Educationorth West beieves that education is the best wa to

exand individua oortunit and enhance the uture

rosects o our counities. We are roud to rovide

ost-secondar schoarshis and bursaries to boriginaand northern outh and to contribute our own educationa

resources on environenta and heathier iving ractices.

he Coans ongoing coitent to continuing

education has ed to the deveoent o orth West-

sonsored schoarshis, which are avaiabe to quaifed

aicants reresenting our eoees and ebers

o the counities we serve. n exanded WC

choarshi progra wi be aunched in the a o 2011.


20/24

id ingering recessionar conditions, he orth West

Coan deivered ixed resuts in 2010 that were not

in keeing with our erorance in recent ears. t the

sae tie, our erorance reaired the stabiit o

the core eeents o our business, ost notab our

northern Canada and askan stores, which achieved a

heath increase in saes. 2010 was aso another ear

o soid rogress in our oundationa work through the

More Growth in Store initiatives highighted in this

suar reort. nd, ina, 2010 was a ear that wi

be reebered or the tireess eorts o our eoe

to dea with chaenging coetitive and econoic

conditions acing our discount banners. o this work

deands the coitent and roicienc o our

eoe across the organization and their contributions

have never been greater.

t the governance eve our Board concuded three ke

ieces o work. he irst was our sooth conversion ro

an incoe trust to a share cororation. he essage

ro the coan was cear and consistent eading u

to our conversion date: we reain coitted to being

an attractive growth and ied investent or our

sharehoders and we u recognize the reiu aced

on sustaining both coonents, as reected in a growing

and consistent dividend.

he second task coeted was the revaing o our

governance oicies, both to aign with our share

cororation ega structure and to genera irove the

discosure o the sound and ingrained rincies o goodgovernance we oow at orth West. his was a tie-

consuing eort, but aso ver worthwhie. We ocused

our work on rocesses that tru atter in creating and

sustaining investor vaue and the ong-ter heath o

our enterrise and we reinorced orth Wests good

governance ractices.

ur third job was to oversee the Coans conversion

to Internationa Financia eorting tandards (IF)

beginning this ear. IF is a signiicant shit in inancia

reorting ractices or Canadian ubic coanies and it

resents unique accounting treatent issues or retaiers.

your Board has been u engaged with anageent andwe have a beneitted ro the dee inance, accounting

and tax exerience o a nuber o our Board ebers.

looking to 2011 and 2012, the Board wi continue to

ocus anageent on the Coans coitent to

More Growth in Store, with seciic attention to arket

share growth and eicienc targets. We wi aso be

investing ore tie on iroving the erorance o our

discount businesses. ext ear wi aso be the beginning o

a rejuvenation o our Board triggered in art b the ending

retireent o severa ebers over the next two ears.

ne o these board deartures wi be that o Ian utherand,

eective at our June 2011 nnua meeting. Ians roe at

orth West started as a ounder and ead investor in 1987,

continued on as a Board eber, as C, as Chairanand ina, as a Board eber again over the ast 24

ears. ong a ong ist o individuas and teas that

have brought orth West to where it is toda, the range

and deth o Ians contribution stands aone and is dee

areciated.

Keith marte aso et our Board ear in 2011, due to his

riar business coitents. like Ian, Keith brought to

orth West uti-aceted skis and insights starting with

his knowedge and stature as a eading Canadian borigina

business erson. We thank Keith or his signiicant

contributions over the ast 11 ears, ost recent as Chair

o our uan esources and Coensation Coittee.

. anord ie

Chairan, Board o Directors

ri 6, 2011

CIm mG


21/24

2010 W Cmpy IC.

Coete discosure o he orth West Coan Inc.s

cororate governance is rovided in the Coans

manageent Inoration Circuar, which is avaiabe

on the Canadian ecurities dinistrators website

at www.sedar.com or in the investor section o the

Coans website at www.northwest.ca

1 32

4 65

7 98

DRECRSHE RH ES CPA C.

H. Sanford Riley (1)

Chairan

Edward S. Kennedy (2)

David G. Broadhurst1, 2 (3)

Frank J. Coleman1 (4)

endy F. Evans2,3 (5)

Robert J. Kennedy2,3 (6)

Gary J. Lukassen2 (7)

James G. borne1,3 (8)

an Sutherland2,3 (9)

Cttee

1 Governance & oinating

2 udit

3 uan esources, Coensation and pension

Cp GVC

BD F DIC


22/24

EECESCAADA PERAS*


president & C

Craig . Gilpin (2)

xecutive Vice-president &

Chie Cororate fcer

John D. King (3)

Chie Financia fcer

ichael . cullen (4)

xecutive Vice-president,

orthern Canada etai

Dalbir S. Bains (5)

Vice-president,

panning & Cororate Deveoent

David . Chatyrbok (6)Vice-president,

Canadian procureent & marketing

Paulina Hiebert (7)

Vice-president,

lega & Cororate ecretar

Daniel G. cConnell (8)

Vice-president,ea state & tore Deveoent

Scott A. cKay (9)Vice-president & Genera manager,

Giant iger, West tore Division

Gerald L. authe (10)

Vice-president,

Inoration ervices

ichael E. Sorobey (11)

Vice-president,

logistics & u Chain ervices

EECESERAAL PERAS*


Chairan & C

Rex A. ilhelm (12)

president & C

John D. King (3)

Chie Financia fcer

J. Robert Cain (13)

Vice-president,logistics & u Chain ervices

Christie A. Frazier-Coleman (14)Vice-president,

procureent & marketing

Paulina Hiebert (7)

Vice-president,

lega & Cororate ecretar

homas . Kallio (15)

Vice-president & Genera manager,

Cost--less

alter E. Pickett (16)

Vice-president & Genera manager,aska Coercia Coan

James . alker (17)Vice-president & Genera manager,

Whoesae erations

*as at ri 6, 2011

Cp GVC

CDI & IIl XCIV

For additiona coies o this reort or or

genera inoration about the Coan,

contact the Cororate ecretar:

Te Nrt Wet Cany inc.

Gibratar ouse, 77 main treet

Winnieg, manitoba Canada 3C 21

204 934 1756 F 204 934 1317

[email protected]

www.northwest.ca

9

1 32

4 65

7 8

10 1211

13 1514

16 17


23/24

radearks are used throughout this annua

reort in an editoria ashion with no intention

o inringeent.

printed in Canada on reccabe aer.2011 he orth West Coan Inc.

Design: Circe

Editorial Services: Bunn & Coan Inc.

Principal Photography: Ian mcCausand

Additional Photography: Chris rend

ur thanks to the sta and custoers who aear in

hotograhs ro Cagar, berta; Curacao, etherand

nties; Gjoa aven, unavut; Iqauit, unavut; Kawock,

aska; ankin Inet, unavut; t. hoas, .. Virgin

Isands; and point, aska; Winnieg, manitoba.

lD IFmI

2010 W Cmpy IC.

Te Nrt Wet Cany inc.

ntcated Dvdend Date*

ecord Date: march 31, 2011

paent Date: ri 15, 2011

ecord Date: June 30, 2011

paent Date: Ju 15, 2011

ecord Date: eteber 30, 2011

paent Date: ctober 17, 2011

ecord Date: Deceber 30, 2011

paent Date: Januar 16, 2012

*Dividends are subject to arova b the Board o Directors

2011 nna and seca meetng

he nnua and ecia meeting o harehoders

o he orth West Coan Inc. wi be hed

on uesda, June 14, 2011 at 11:30 a

in the murie ichardson uditoriu,

Winnieg rt Gaer, 300 meoria Bouevard,

Winnieg, manitoba.

Tranfer gent and egtrar

CIBC meon rust Coan

Cagar and oronto

o-ree: 1 800 387 0825

www.cibcmellon.ca

stck xcange ltng

he oronto tock xchange

stck syb NWF

II #: C6632781093

CIp #: 663278109

uber o shares issued and outstanding

at Januar 31, 2011: 48,378,000

dtr

pricewaterhouseCooers llp

hare/nit hare/nit hare/nitFisca year price igh price low price Cose Voue p/p

1

2010 $23.00 $17.02 $21.09 24,813,768 $1.58

ri 30, 2010 19.50 17.60 18.75 4,899,200 0.36

Ju 31, 2010 20.22 17.02 19.78 4,148,526 0.41

ctober 31, 2010 21.99 19.27 20.68 5,118,932 0.45

Januar 31, 20112

23.00 19.93 21.09 10,647,110 0.36

2009 $19.60 $14.88 $17.94 20,080,407 $1.69

ri 30, 2009 17.48 14.98 16.35 4,068,297 0.33

Ju 31, 2009 16.75 14.88 15.65 5,289,346 0.43

ctober 31, 2009 18.70 15.11 16.98 6,004,601 0.51

Januar 31, 2010 19.60 16.86 17.94 4,718,163 0.42

2008 $19.99 $13.00 $16.14 16,402,351 $1.56

ri 30, 2008 19.99 17.37 18.53 3,378,010 0.32

Ju 31, 2008 18.75 14.20 14.55 4,473,357 0.38

ctober 31, 2008 17.75 13.00 17.00 4,438,533 0.46Januar 31, 2009 18.50 15.10 16.14 4,112,451 0.40

1 et earnings er share (unit) are on a diuted basis.2 ective Januar 1, 2011, orth West Coan Fund converted to a share cororation caed

he orth West Coan Inc.

Tta etrn perfrance (% at Januar 31)

his chart iustrates the reative erorance o shares/units (on a ost

sit basis) o orth West Coan Fund over the ast fve ears.

ective Januar 1, 2011, orth West Coan Fund converted to a share

cororation caed he orth West Coan Inc. he index incororates

the reinvestent o dividends and incoe distributions.

2006 2007 2008 2009 2010 2011

WF./WF 100 139 166 157 189 239

X Coosite 100 112 116 79 104 130

Consuer Durabes/are Grou 100 107 109 46 76 94

etaiing Grou 100 111 97 68 92 103

Food/taesetaiing Grou

100 110 88 94 98 104

[

[

[

[

[

300

200

100

0

[[

[[

[

[

[


24/24

orWesters are associated with the vision,

erseverance, and enterrising sirit o the

voageurs who ushed ast iits to urther

our Coans growth during the ur trade.

We trace our roots to 1668, and the estabishent

o one o orth ericas ear trading osts at

Waskaganish on Jaes Ba. oda, we continue

to ebrace this ioneering cuture as true

rontier erchants.

Documents

Summary Annual Report - Northern Stores