The Source electronics chain will open 20 new stores this year, expecting its small-store strategy with popular products, including cellphones, to attract consumers.

More than half of the new stores will open in Western Canada, The Source president Charles Brown said Friday.

"In spite of the cautious economic forecast, we continue to see strong consumer spending in key categories, things like headphones and mobility and home entertainment," Brown said from Toronto.

"The beauty of our model with the small store is you can go into a fairly small market and have that store be profitable. You don't need a massive market for a 2,000-square-foot store," he said.

Telecom giant BCE Inc. (TSX:BCE) bought The Source in July 2009 to complement its Bell wireless products and services.

"That's starting to be a growing part of our business," Brown said.

The announcement comes a day after major retailers Best Buy Canada and Sears Canada announced layoffs totalling some 1,600, a move analysts blamed on the popularity of online shopping and the shrinking demand for super-sized brick-and-mortar stores.

"We're really accessible — 70 per cent of Canadians live within five kilometres of a Source store. So we're in your neighbourhood. That fits the trend of where things are going today," Brown said.

The company already has 700 small-box locations across Canada, and says about six per cent of its business comes from online sales.

It also plans on renovating 50 stores, in addition to the new stores which will expand the 67 stores it opened last year, Brown said.

He said almost 900 full-time and part-time jobs will be created for the 67 stores opened last year and the 20 stores to open this year.

Retail analyst Len Kubas of KubasPrimedia Consultants said The Source isn't in direct competition with Best Buy or Sears.

"Most people who go to The Source are probably going to need a sales person to help (them) with what they want," Kubas said from Toronto.

"You go for a little extra service, you go for personal attention which you may not get to the same degree in a big box store."

Many of the stores doing business as The Source are former Radio Shack stores.

The name was changed after U.S.-based Circuit City acquired the Canadian operations.

Circuit City later declared bankruptcy and closed all its U.S. locations but the Canadian business survived when it was acquired by BCE Inc.

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