Sobeys

Sobeys Inc.
Subsidiary
Industry Retail (Grocery)
Founded Stellarton, Nova Scotia (1907)
Headquarters Stellarton, Nova Scotia
Mississauga, Ontario
Key people
 Francois Vimard, Interim President & CEO
Products Grocery
Number of employees
 125,000 (2014)
Parent Empire Company
Subsidiaries Big 8 Beverages
Safeway Canada
FreshCo
Foodland
Price Chopper
Needs Convenience
Lawtons
Thrifty Foods
Website www.sobeyscorporate.com
www.sobeys.com (Retail site)

Sobeys Inc. is the second largest food retailer in Canada, with over 260 supermarkets operating in Canada and around 1500 under a variety of banners. Headquartered in Stellarton, Nova Scotia, it operates stores in all ten provinces and accumulated sales of more than $16 billion CAD in 2012. It is part of the conglomerate Empire Company.

History

Sobeys corporate office, Stellarton, NS

Sobeys was founded in Stellarton, Nova Scotia by John W. Sobey in 1907 as a meat delivery business. In 1924 his son Frank H. Sobey convinced him to expand into a full grocery business, serving the industrial Pictou County region. From that point until his death, Frank was the driving force behind the business. Sobeys opened its first self-serve supermarket in 1949.

The chain eventually expanded throughout Atlantic Canada. During most of the second half of the 20th century it was the region's dominant grocer. In the 1980s, Sobeys expanded into southern Ontario, challenging Loblaws on its "home turf", thereby igniting what came to be a nationwide battle for market supremacy.

Sobeys had significant stakes in New England grocer Hannaford and Quebec grocer Provigo until the 1990s.

In 1998, Sobeys became the second-largest grocer in the country after purchasing the Oshawa Group, owners of the IGA franchise across Canada, along with several regional chains in Ontario, in addition to various food service and wholesale companies.

In 2001, Sobeys abandoned a two-year $90 million investment in an Enterprise Resource Planning system because of failed project management.

In 2002, Sobeys undertook major changes in its store design and customer service policies with the introduction of "Ready to serve". This initiative was reportedly an attempt to emulate the successful moves of the Publix supermarket chain in the southern United States.[1]

In 2005, Sobeys lost a bidding war with Quebec-based Metro to acquire A&P Canada, operator of several Ontario supermarket chains. The all-cash offer made by Sobeys was reportedly the highest bid for the chain, but the U.S. parent, The Great Atlantic and Pacific Tea Company, ultimately accepted Metro's $1.7 billion cash-and-stock offer. It is also suggested that the Sobey family was unwilling to cede any control to the Tengelmann Group, the ultimate parent company of A&P at the time.[2] Though Sobeys remained the second largest grocery chain in Canada, it was the third place chain in most of the provinces outside the Atlantic, and the successful purchase of A&P Canada would have helped to bolster its position in Ontario.

In 2007, Sobeys announced a $260 million takeover offer for the Thrifty Foods chain in British Columbia.[3]

In September 2011, Sobeys' wholesale division signed a long-term distribution agreement with American retailer Target for the supply of select food and grocery products to its Canadian stores.[4] In March 2012, Sobeys acquired 236 Shell gas station locations in Quebec and Atlantic Canada.[5]

In June 2013, Sobeys announced the purchase of Safeway's Canadian operations for $5.8 billion, subject to regulatory approval. The acquisition added Safeway's 214 locations, primarily located in Western Canada, to its portfolio.[6] As a condition of the deal imposed by the Competition Bureau in October 2013, Sobeys was required to sell 23 of its retail locations to other companies. Sobeys sold 29 of its locations, which included 18 Safeway stores. Fifteen were sold to Overwaitea Food Group (particularly in British Columbia and Alberta), and fourteen were sold to affiliates of Federated Co-operatives (particularly in Alberta, Saskatchewan, and Manitoba) for $430 million in total.[7][8][9]

In June 2014, Sobeys announced that it would, in the wake of the Safeway purchase, close 60 of its "underperforming" locations. The stores affected were primarily in Western Canada, although some in Ontario and the Atlantic region were also affected.[10][11] In 2015, Sobeys acquired the store and gas units of Co-op Atlantic.[12]

In July 2016, Empire Company CEO Marc Poulin abruptly left the company after Sobeys reported a $942.6 million loss, which was credited to difficulties in integrating the Safeway chain into Sobey's overall operations. The Financial Post also reported that changes made by Sobeys, including the discontinuation of its popular loyalty program, the replacement of Safeway's house brands with Sobeys' brands, reports of poorly-stocked inventories at Safeway locations, had impacted the chain's customer loyalty.[13]

Private label brands

The Sobeys private label lineup has carried several names. Its private label products were introduced under the "Sobeys" name; by the mid-1990s they had been renamed "Our Best". After its purchase of Oshawa Group, Sobeys dropped 'Our Best" in favour of Oshawa's "Our Compliments" brand.

In 2005, Sobeys shortened the name to "Compliments". At the same time, it expanded the brand's product lineup to make it more comparable to competing private labels such as Loblaw's President's Choice brand. From 2007 to 2010, Sobeys offered "Compliments Junior", products aimed at children and co-branded with The Walt Disney Company.

In late 2009, lower-price store-brand products were transitioned from "Compliments Value" to the "Signal" brand, which had been used by Sobeys in the 1990s for a similar range of products. After the Oshawa Group merger, Sobeys had dropped that name for to Oshawa's "Smart Choice" label, and later for "Compliments Value".[14]

Private-label soft drinks are branded "Big 8" in Atlantic Canada. Elsewhere, soft drinks bear the Compliments brand.

Banners

Needs convenience/Sobeys Gas Bar

In addition to the flagship Sobeys banner, the company operates supermarkets under a number of other banners:

IGA

IGA and IGA Extra are the main banners in the province of Quebec. There are also 88 IGA stores in Western Canada and 105 in Ontario. However, Sobeys has announced that it plans to convert most of the remaining IGA stores in Ontario to the Price Chopper (now FreshCo), Foodland, or Sobeys banners.[15] An IGA store is also located in mainly French-speaking Edmundston, New Brunswick, and an IGA Extra in Caraquet, New Brunswick; it is a rebranded Sobeys location. MarketPlace IGA stores in British Columbia are independently owned by H.Y. Louie,[16] parent of London Drugs. These stores also carry Compliments products. Sobeys has reportedly made unsuccessful attempts to purchase the MarketPlace chain.[3]

At the time of the Sobeys takeover of the Oshawa Group, all IGA locations in Atlantic Canada were purchased separately by Loblaws for competition reasons. Loblaws converted these IGA locations to one of their own banners.

Safeway

Main article: Safeway Canada

In June 2013, Sobeys announced its intent to acquire the Canadian locations of Safeway for $5.8 billion.[6]

Price Chopper

Sobeys operates the smaller discount grocery store Price Chopper which has 118 locations in nine provinces and the Northwest Territories. The company also operates the Foodland chain that is located mainly in rural areas of Newfoundland and Labrador, Nova Scotia, New Brunswick and Ontario. Other smaller grocery stores are operated under the Tradition Markets banner in Quebec and the Food Town banner in Western Canada. Sobeys operates Thrifty Foods, a chain of 29 grocery stores and an online grocery service based in Victoria, British Columbia.[17]

In 2010, Sobeys launched FreshCo, a discount banner. The pilot stores are rebranded Price Chopper outlets in Southern Ontario.[18]

Sobeys Urban Fresh

In 2008, Edmonton got a new urban-format Sobeys in its downtown core with street access and a unique building. Other Edmonton locations are being proposed (such as College Heights and Cloverdale), as well as locations in Calgary and Vancouver. These urban locations are catered to the crowd of the area, and sometimes have different types of food compared to suburban versions. The Sobeys urban-format in downtown Edmonton closed in the summer of 2014. According to a Sobeys representative "it just wasn't financially viable for us to operate." [19]

Sobeys Extra

In November 2013, Sobeys unveiled its first "Sobeys Extra" store in Burlington, Ontario. The newly refurbished 58,000-sq.-ft. store is the first one launched under the Sobeys Extra banner in Canada.[20]

Former grocery banners

Other Sobeys-owned enterprises

The company owns the Needs, Sobeys Express, and BoniChoix convenience store chains, and the Lawtons drug store chain in Atlantic Canada. Sobeys also owns the wholesale food distribution company TRA Atlantic. The company delivers products to retail outlets, such as convenience stores and gas stations, throughout Atlantic Canada. TRA also operates the Kwik-Way and Clover Farm convenience store chains.

At some Sobeys locations tobacco products are sold in a separate Sobeys-owned store, called Griffins. These outlets are a part of the Sobeys store but are only accessible from the outside due to provincial laws prohibiting stores with pharmacies from selling tobacco products.

A number of Sobeys and Needs stores in Nova Scotia and New Brunswick have a gas bar branded Sobeys Fast Fuel.

Sobeys Express (known as IGA Express in Quebec) stores feature produce and take-out meals alongside items commonly found in a convenience store. Some of its locations are operated as the convenience store for Sobeys-operated Shell stations.[21]

Loyalty programs

Most Sobeys-owned stores offer the Air Miles loyalty rewards program. At various times prior to joining Air Miles, Sobeys-owned locations in many regions offered the in-house Club Sobeys/Club Thrifty Foods program instead.

When Sobeys became an Air Miles partner, its partnership was restricted to Quebec and Atlantic Canada - the same territory rights held by Oshawa Group prior to its acquisition by Sobeys in 1998. Air Miles had partnered with Safeway for all of its locations across western Canada and northwestern Ontario, while A&P Canada (later Metro) had the rights in the rest of Ontario.

In June 2014, shortly after its acquisition of Safeway Canada (Air Miles' original grocery partner), Sobeys announced plans to expand its Air Miles participation to Sobeys, IGA, Foodland and Thrifty Foods stores in western Canada and northwestern Ontario on September 12, 2014, replacing Club Sobeys and Club Thrifty Foods in these areas.[22]

In early 2015, Sobeys announced that the Air Miles loyalty program would be extended into Ontario on March 27, 2015, ending the Club Sobeys loyalty program nine months ahead of the scheduled termination date. This was a result of a new agreement between Air Miles and Metro, which extended Metro's partnership but gave up its exclusivity in the grocery category in Ontario.[23]

Club Sobeys

Club Sobeys was a loyalty program at the chain's Atlantic Canada locations offered during the 1990s, prior to Sobeys securing the regional rights to Air Miles through the Oshawa Group merger. As the company expanded its operations in Ontario and Western Canada in the 2000s, Sobeys introduced a new Club Sobeys program in those markets (also known as Club Thrifty Foods in the British Columbia locations of that chain after it was acquired).

In the Club Sobeys region, Sobeys introduced, in partnership with Citibank Canada, a Club Sobeys MasterCard credit card. These card accounts were later transferred to Bank of Montreal, which also introduced the BMO Sobeys Air Miles MasterCard in Atlantic Canada (and IGA Air Miles MasterCard in Quebec). All Club Sobeys credit cards have been converted to BMO Sobeys Air Miles MasterCard accounts.

Locations

Alberta

53 locations:

British Columbia

1 location:

Manitoba

17 locations:

New Brunswick

23 locations:

Newfoundland and Labrador

15 locations:

Nova Scotia

42 locations:

Ontario

89 locations:

Prince Edward Island

5 locations:

Saskatchewan

10 locations:

Empire Company

The Sobeys conglomerate is owned by Empire Company Limited, which is controlled by the Sobey family. In addition to Sobeys, the Empire Company also owns the trademarks to their former Empire Theatres cinema chain, which had been, until Oct. 2013, Canada's second-largest movie theatre chain, when it's locations were split between Cineplex Entertainment (Atlantic locations only) and Landmark Cinemas (Ontario-British Columbia), as well as many commercial retail properties through subsidiary Crombie REIT.

See also

References

  1. ↑ Pitts, Gordon (July 20, 2005). "Grocery business faces sea change". The Globe and Mail. Retrieved September 9, 2015.
  2. ↑ Yakabuski, Konrad (July 23, 2005). "Two CEOs dined, one got Apple Pie". The Globe and Mail. Retrieved September 9, 2015.
  3. 1 2 Strauss, Marina (July 16, 2007). "Sobeys buys Thrifty, gains foothold in B.C.". The Globe and Mail. Retrieved September 9, 2015.
  4. ↑ Taylor, Evra (September 23, 2011). "Sobeys signs grocery deal with Target". Marketing Magazine. Retrieved September 9, 2015.
  5. ↑ "Sobeys bags 236 Shell stations, 20 in N.S.". The Chronicle Herald. Retrieved 29 July 2016.
  6. 1 2 Ladurantaye, Teve (June 13, 2013). "Sobeys to buy Safeway in $5.8-billion deal". Globe and Mail. Toronto. Retrieved June 12, 2013.
  7. ↑ "Canada Safeway's changeover a co-operative effort". Regina Leader-Post. Retrieved 24 May 2014.
  8. ↑ Kirbyson, Geoff (February 13, 2014). "Four Winnipeg Safeway stores sold to Red River Co-op". Winnipeg Free Press. Retrieved September 9, 2015.
  9. ↑ Duffy, Andrew (February 13, 2014). "All Victoria Safeway stores sold to Overwaitea Food Group". Times-Colonist. Retrieved September 9, 2015.
  10. ↑ "Sobeys to shut Amherst Foodland and 5 stores in N.B.". CBC News. June 26, 2014. Retrieved September 9, 2015.
  11. ↑ "Sobeys closing 50 underperforming stores across Canada". CBC News. June 26, 2014. Retrieved September 9, 2015.
  12. ↑ "Sobeys rebranding Co-op Atlantic stores". CBC News. June 24, 2015. Retrieved September 9, 2015.
  13. ↑ "How Sobeys screwed up Safeway in a messy takeover that left empty shelves, massive losses, and drove customers away". Financial Post. Retrieved 29 July 2016.
  14. ↑ Springer, Jon (September 21, 2009). "Sobeys Expands Premium Label". Supermarket News. Retrieved September 9, 2015.
  15. ↑ "Sobeys to convert IGA stores to Sobeys brands". CBC News. August 28, 2006. Retrieved September 9, 2015.
  16. ↑ "H.Y. Louie Co. Limited to join IGA International". IGA Press Release. February 10, 2005. Archived from the original on March 27, 2006.
  17. ↑ "Victoria grocers ready for Amazon delivery invasion". Times-Colonist. October 31, 2013. Retrieved September 9, 2015.
  18. ↑ "Sobeys launches FreshCo discount line". CBC News. May 12, 2010. Retrieved September 9, 2015.
  19. ↑ "Sobeys closes story on 104th street". Canadian Broadcasting Corporation. June 26, 2014. Retrieved March 20, 2016.
  20. ↑ "Sobeys unveils its latest store, with food discovery and more". Canadian Grocer. November 28, 2013. Retrieved September 9, 2015.
  21. ↑ "Sobeys gas bars to upgrade food offerings". The Chronicle Herald. Retrieved 29 July 2016.
  22. ↑ Sobeys Inc. (June 24, 2014). "Sobeys to Launch AIR MILES Reward Program at Additional Banners in Western Canada". CNW Group. Retrieved September 9, 2015.
  23. ↑ "Sobeys to offer Air Miles in Ontario, too". Canadian Grocer. January 16, 2015. Retrieved September 9, 2015.

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