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BARRIE, ONT. -- Greg and Marilyn Mannion of Port Carling, Ont., headed to a new Best Buy electronics superstore in Toronto for their Christmas shopping, and stocked up on two digital cameras and accessories worth about $2,000.

Then they made their way to a nearby mall where they stopped in at a RadioShack -- and bought a handheld solitaire game for just $19. A few days later, they dropped into the RadioShack outlet store in Barrie, Ont., and spent $75 more on a computer game and joystick.

"Little things, we buy at RadioShack. Big things, probably not," Mr. Mannion says.

Therein lies the problem for RadioShack, which is run by Canadian licencee InterTan Inc. of Barrie. The Mannions -- and too many other shoppers like them -- only think of RadioShack for the small stuff, like batteries or telephone headsets. They turn to destination superstores or independents for the bigger -- and pricier -- products.

RadioShack's challenge: to change that image so that customers like the Mannions will think of its stores for the big-ticket items, as well, and plunk down their dough for DVD players and digital cameras rather than just the accessories.

RadioShack's task has been made all the tougher since last fall, when heavyweight big-box rival Best Buy Co. Inc., which bought Future Shop over a year ago, opened its first eight stores under its own banner. It plans another 65 or so outlets over the next five years.

Despite its new challenger, the RadioShack chain of about 1,000 small stores -- about half corporate RadioShack stores and the rest a combination of Rogers AT&T, Battery Plus and dealer outlets -- is very tuned into its shortcomings.

It has been progressively expanding into popular brand-name digital products, and is now working on remodelling its cluttered stores to try to make them easier to navigate.

It has redesigned its flyers to also make them easier to read, and is adding clearer signs in its stores.

"What we're doing is trying to refresh our brand," says Ean Daoust, a senior vice-president at InterTan. "We realize our stores are cluttered. We want to clean up the clutter."

That would go over well with Mr. Mannion, who says it's difficult to find anything in a RadioShack. "Tell them not to be so crowded, so junky," he suggests.

It was a timely suggestion as RadioShack headed into the final days of the key holiday selling season after having dealt with some unexpected setbacks.

Last month, InterTan abruptly parted ways with executive vice-president Michael Flink, a U.S. consumer electronics veteran who arrived only eight months earlier in a bid to bolster the merchandising and marketing operations. The company refuses to provide any details about the departure.

Three months before that, InterTan was hurt by accounting and warehouse woes that led management to trim its profit outlook for the fiscal year and drove down its share price. At the same time, InterTan reported weaker results for its fiscal year ended June 30.

But InterTan president Brian Levy says the most pressing problems are behind the company as it focuses on new high-tech products and the new-look stores. The first were launched recently in Edmonton and Kitchener, Ont., and they will be rolled out chainwide over the next few years.

They've been dubbed "digital revolution" outlets because of a greater emphasis on digital products and elements of them have been patched together at a model but inoperative store at head office in Barrie. The makeover includes wider aisles, brighter colours, colour-coded signs and a display at the front that showcases digital products.

Mr. Daoust wants consumers to know that RadioShack carries much more than the CB radios and in-store brands that the chain was once known for. The stores have branched out into Sony, Panasonic and the other big brand names, and extended their product mix to such popular items as DVD players, personal digital assistants and home theatres.

"People don't realize we have this kind of product," Mr. Daoust says. For example, RadioShack now carries 12 different DVD players ranging in price from about $100 to $500. Just a year ago, it had three or four.

Still, each of the 104 Future Shop and eight Best Buy stores carries twice as many DVD models as a RadioShack, once again underscoring the edge those superstores have over RadioShack.

Mr. Daoust doesn't buy that. He sees RadioShack's smaller size (its stores are about a 15th the size of Best Buy outlets) and limited choice of each product category as a plus rather than a minus. Many shoppers, he insists, are overwhelmed by the big-box stores and prefer the convenience of the many RadioShack locations.

Mr. Mannion says he won't head for RadioShack to buy the computer he wants, even though the chain carries computers.

Clearly, RadioShack has its work cut out for it with customers like Mr. Mannion.
mstrauss@globeandmail.ca