Chairman's MessageAs expected, 2013 was a demanding year for North West. We challenged the company to deliver more ongoing “In Store” improvements while assessing a wider range of strategic options within our core markets. We also invested significant time in pursuing investment opportunities that arose over the past six months, as part of what turned out to be a very active period of transactional restructuring within the Canadian retail sector.
The results from last year’s “In Store” work were better than the financial numbers indicate and set us up for improved future performance. Staying the course on execution and operational excellence in our existing business is proving to be the best focus for short and longer range returns. Within the higher cost, and increasingly complex environment of most North West markets, there remains much to be gained from leaner and more innovative work processes.
Going forward, the strategic overlay that was largely completed in the first half of the year reinforces the fundamental importance of our stores and the people who run them. The confirmation of this core competency is causing us to place even more emphasis on the need for investment in our store network, both in capital and operating resources. It is also helping management and the Board to appropriately prioritize the projects that we are considering.
The pace of new ideas in retail continues to accelerate and, as we saw in 2013, this includes a significant amount of industry consolidation, accompanied by aggressive financial engineering. While the Company has and will continue to consider larger scale investments on a very selective basis, we believe the more likely path to success will be to build on what we know works, for example our focus on improving perishable performance and community relations, and to fix or discard practices and strategies that fall short of our expectations.
Our focus continues to be on building a better business, which understands and meets the needs of our customers and the communities in which we do business. We are seeing a slow shift of economic momentum as income grows within the remote markets we serve. As this gains traction, we are confident that we will be ready with the products and services our customers want.
On behalf of the Board and all Nor’ Westers, I would like to acknowledge the exemplary contribution of Gary Lukassen who will be retiring from the Board in June. Gary became a founding member of the Board in 1987, when the Hudson’s Bay Company, of which he was CFO, sold its Northern Stores Division to create today’s North West Company. For most of these twenty-seven years Gary led the Company’s Audit Committee, bringing his deep retail and accounting expertise to this role. Above all, Gary has been dedicated to governance and Board oversight standards that are reflected in North West’s impressive success over his years on our Board.
- H. Sanford Riley, Chairman, Board of Directors, April 9, 2014