With investors largely avoiding bricks and mortar retail like the plague, companies like Canadian Tire Corporation (TSX:CTC.A) may not appear to be top choices for long term investors seeking out companies which will thrive for decades. With headwinds aplenty in the consumer retail space, it makes sense that shares of Canadian Tire have largely stagnated since the beginning of the year.
That being said, Canadian Tire is one company which remains high on my watch list for a number of reasons. In addition to holding a dominant market position in its sector, Canadian Tire has offered investors for decades superior returns compared to its peers due in part to its ability to leverage an impressive footprint across Canada – a footprint which has gone unparalleled.
With the majority of the company’s products consisting of those which require some service aspect or are hard to sell via an online channel, Canadian Tire remains relatively insulated from technological disruption, relative to its peers.
Additionally, the company has continued to move into focusing more heavily on its private label products, choosing to leverage its existing store footprint by investing in outside brands. The company recently announced the acquisition of Helly Hanson, a brand which is synonymous with outdoor apparel, and is well-known as a global leader in this niche market.
By continuing to build out its product base and attribute a higher percentage of the company’s sales to company-owned brands, I expect Canadian Tire to be able to continue to provide superior upside potential in the long term for investors willing to weather the storm (no pun intended).
Invest wisely, my friends.
