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DavidsTea Is Coming To Canadian Grocery Stores This Fall After A Drop In Sales

DavidsTea is generating momentum through an expansion into Canada's grocery stores.

Just when it looked like trouble was brewing for DavidsTea, the Canadian specialty tea retailer announced that the company is ready to give a different retail channel a chai.  Yesterday, DavidsTea revealed its new retail strategy, consisting of plans to expand its wholesale business, after seeing a drop in sales in its most recent quarter. DavidsTea in grocery stores will soon be a reality, as the company attempts to boost profits in Canada.

The company made an official announcement that it would be expanding its grocery store product line by selling its teas at over 1,500 Loblaws locations starting this fall.  DavidsTea is also looking to increase its brand awareness among men, reported the company's COO, Frank Zitella, to The Globe and Mail.

Zitella referenced the fact that since DavidsTea's customer base currently consists of over 80 percent female shoppers, the company would be aiming to promote its tea and other products at events popular with the male demographic in the near future.

According to The Globe and Mail, DavidsTea's sales dropped 4.1 percent to $83.1-million in Q4 (which ended on February 2nd), while comparable store sales dropped 1.6 percent. 

 Interim CEO and executive chairman Herschel Segal explained during a conference call on Thursday after the company's fourth-quarter financial results were released, "Clearly our financial results are not yet where we want them to be.  However, we are making headway and experiencing positive trends in a number of areas."

The retailer, which is based out of Montreal, did notice that its wholesale and e-commerce sales increased by 20.2 percent or $2.5-million for Q4, due to a greater online presence in both Canada and the US, as well as its rolling-out of some of its teas at numerous Loblaw Companies Ltd. store locations.

The company also intends to leverage wellness trends when developing new initiatives, since, according to Zitella, wellness teas are "growing more quickly than the overall tea market."