The Oromocto merchants’ war with the Canadian Army

WHEN A BIG supermarket moves in to squeeze out a small grocer, it’s easy to shrug off the result as one price of free enterprise. But what’s the answer when an army colonel commanding a squad of 77 civilian clerks sets up shop to compete with a town’s established merchants?

Shop owners in Oromocto, NB, are bitterly facing such competition from a general store two miles away, at Canadian Forces Base Gagetown. Since the servicemen’s store got started early last year, in anticipation of a takeover by the new governmentbacked Canex (Canadian Forces Exchange) System last October, the merchants’ trade, they claim, has dropped 30 to 40 percent.

“We’re damn well going to do something about it!” vows Peter Rouleau, a haberdasher who’s president of Oromocto Board of Trade. But about all they’ve been able to do is protest in vain to the army, the town council and Ottawa. They say there’s no way they can match prices with Canex, whose customers include 12,600 servicemen and their families, the base’s civilian employees, and military pensioners. Some comparisons:

□ A washing machine priced at $200 on the plaza sells for $120 in the Canex store.

□ A sports jacket that’s $30 at Canex is $45 on the plaza.

□ On some hard goods (e.g. radios, TV sets) there’s scarcely any difference, but cigarettes on the base cost a nickel a pack less than in Oromocto.

□ By undercutting civilian service stations the base exchange has driven

0gasoline prices down from 51.7 cents to 47.2 a gallon for regular grade and from 56.7 to 52.2 for premium.

Such price differentials aren’t hard to explain. Though its range of items is wide (virtually every personal and household need, except groceries, is displayed or offered by catalogue), the Canex store carries a limited selection and jam-packs its displays into 4,000 square feet of space that was once a military clubhouse. But the base exchange’s big advantage, as its rivals see it, is its low overhead, with no real-estate taxes to pay and with building depreciation, lighting and heating all coming out of the base’s budget, not out of the store’s income.

Col. H. E. Theobald, who bosses the base’s commercial operations (the store, 10 snack bars, a movie house, a car hobby shop), scoffs at the civilian merchants’ claims about unfair competition. For one thing, he says, the store building is “surplus to military needs” and might thus stand idle otherwise. His operation, he insists, isn’t unfairly hurting the merchants — just forcing them to bring down their “extravagant prices” and improve “generally poor service.”

Many townspeople and military personnel agree. One Oromocto housewife claims local prices were so “atrocious” she used to drive 12 miles to Fredericton to shop. One soldier swears an Oromocto clothingstore used to clip manufacturers’ price tags off suits and substitute its own.

For Col. Theobald, the big appeal of the Canex system is that Ottawa lets him keep nearly all his profits to provide recreational facilities for servicemen. With a gross take of $450,000 in 1968 and even better prospects for ’69, Theobald expects to

meet the year’s recreation budget and build a $130,000 swimming pool. But the civilian merchants fear another monument to Theobald’s enterprise could well be a long row of empty stores in the Oromocto shopping plaza. GARY BANNERMAN