Corner stores are disappearing from Canada's retail landscape, while independent supermarket outlets are increasing in number across the country, say industry analysts and operators.

"The competition between corner stores and supermarkets is going to be felt across the country because of the changing dynamic of the supermarket industry," says James Smerdon, a retail analyst with Vancouver-based Colliers-Hudema Consulting.

It's difficult to get accurate statistics on just how many corner stores have ceased operations. Smerdon and others interviewed say the decline of corner stores that sell basic food items is due to increased competition from national convenience store chains, such as 7-Eleven, and petroleum producers that operate stores along with gas stations.

Many corner stores in Canada were originally started by immigrants, whose offspring have pursued different careers. Meanwhile, customers don't travel the same routes every day anymore, or take the time to stop and chat with their friendly local storekeeper while buying basic necessities.

John Scott

However, Smerdon says more and more independent supermarkets of various sizes and formats are moving into neighbourhoods they haven't been before.

"What that's doing is establishing their accessibility, their visibility and their proximity to the market. It used to be the domain of the corner store."

Smerdon says major chains are also entering a new era as they open smaller stores in streetfront locations.

But, contrary to popular belief, independent grocery stores are not struggling because of competition from major supermarket chains and other large players, says John Scott, president and CEO of the Toronto-based Canadian Federation of Independent Grocers.

"People often call me and say, 'Boy, Wal-Mart must be killing your people' - and the answer is no, they're not," says Scott, whose group represents 4,100 independent grocery stores across the country. "Wal-Mart is going against the big guys. It's superstore against superstore. It's the large guys that tend to gouge each other when a new competitor of that size comes into the marketplace."

Citing reports by trade publication Canadian Grocer, Scott says independent grocery stores have increased more than any other segment in the market.

He says independents would have great difficulty going head to head against major supermarket chains because larger players have more wholesale buying and advertising power - but they don't have to.

"Independent grocers that are well-differentiated in the marketplace are doing exceptionally well, particularly right now in this current economy," says Scott. "You can go across the country ... They're doing exceptionally well for a reason. They have a different offering against the corporates."

Big corporate stores are competing for more of the mass-market dollar, he notes.

"They don't differentiate themselves by consumer group or appear to a certain consumer's taste."

Independents "mean something" to consumers, but the meaningfulness differs market by market, he adds.

While corner stores and independent grocery outlets have co-existed for years, the little corner stores are facing a more difficult time these days as gas stations that sell food drastically undercut their prices.

"A corner store is really a convenience thing," says Scott. "An independent store is not a convenience thing. An independent store, to be successful, has to offer something that's significantly different. The corner store isn't in that game."

Danny Louie is looking forward to getting out of that game. If the proprietor of Fairview Corner Store in Nanaimo, B.C., could start all over again, he wouldn't.

"It's tied me down," says Louie, who has owned and operated a corner grocery store for 29 years. "You can't go anywhere. You can't hire people. They don't know how to run the store."

Louie and his wife Dorothy, who operates the store with him, will try to sell the business when it comes time to retire. Their three children are not interested in running the operation.

"It's pretty hard to compete with the bigger stores," says Louie. "They can sell everything cheaper now. We can barely compete at all."

Alistair Corbett, a retail analyst with CB Richard Ellis, says he can find another reason than increased competition or cultural causes for the closure of some corner stores.

"I can see the fact that many of them are in areas that are getting redeveloped," says Corbett. "That's probably not the highest - or best - rent player in the formats that they're in. I can see why they're a struggle."

He points to examples of stores on properties in downtown Calgary that are being bought and being redeveloped as condos with some retail components.

"(Corner groceries) are typically not the users that are going back in once the buildings are finished," he says.

Since most corner-store owners rent their properties, they can't salvage an unsuccessful operation by selling the land for huge gains during a time when real estate prices are high, especially in Western Canada.

But Corbett says corner stores still play an important role. Many areas of Calgary, he says, still depend on little corner stores. He frequents one in his neighbourhood when he doesn't want to travel far for groceries.

"The city should certainly be encouraging that (development of corner stores) because they're wanting more and more people to be able to walk to a place rather than have to drive to their nearest Safeway store."

But people trying to start up a corner store have an increasingly difficult time acquiring sites, compared to convenience store chains. Corbett says landlords are willing to take less in rent from national players because they provide a national name, an anchor tenant and more financial security than fledgling mom-and-pop operations.

"If there's gas involved, it becomes even more difficult," he says. "If something goes sideways on that (mom and pop) store and it doesn't perform, the landlord is not going to be getting a rent cheque every month."

Bill Genova, who conducts tours of independent grocery stores in Toronto, says the key to their success is specialization.

Genova's father owned and operated a corner grocery store in downtown Toronto after immigrating from Italy. But Genova chose to go into TV and radio broadcasting before he retired and then moved into the tourism sector.

"It can only be operated on a family basis in order to get the manpower to run it," says Genova. "Your son's got to work for peanuts."

He attributes his family store's decline largely to the removal of streetcars from downtown Toronto.

"People would come along, get off the streetcar, go into the corner grocery store, grab some milk and some veggies and go home. Once that stopped happening, that killed a lot of neighbourhoods."

Genova says green grocers have done a better job of checking the quality of produce and presenting it in the store than large supermarkets.

Independent grocery stores also appeal because many customers want to support small operators rather than large ones.

Like CFIG's Scott, he believes there will always be a place for independent grocers - and people who want to operate them.

So does Brent Batistelli, who owns and operates a store by his family's name in Lively, near Sudbury. "This business is something that's basically in people's blood," says Batistelli, whose store is actually a franchise within the Loblaw's chain.

He says he gains by selling Loblaw's products, but most customers probably don't know that he runs a franchise.

Either way, he supports and echoes the sentiments of others: "The independent grocery store is alive and well in this country."

(Monte Stewart can be reached at monte@businessedge.ca)