Sobeys

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Sobeys Inc.
Type Subsidiary
Industry Retail (Grocery) [4]
Founded Stellarton, Nova Scotia (1907)
Headquarters Stellarton, Nova Scotia, {{{location_city}}}, {{{location_country}}}
Key people Marc Poulin, President & CEO
Products Grocery
Revenue Green Arrow Up.svg $16.249 billion CAD (2012)[1]
Net income Green Arrow Up.svg $339 million CAD (2012)[1]
Employees 97,000 (2013)
Parent Empire Company
Subsidiaries Big 8 Beverages
Safeway Canada
Website www.sobeyscorporate.com
www.sobeys.com (Retail site)

Sobeys Inc. is the second largest food retailer in Canada, with over 1,500 supermarkets operating 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[edit]

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 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]

The company operates more than 1,300 stores in ten provinces and distributes goods to thousands of wholesale customers.

In 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 June 2013, Sobeys announced the purchase of Safeway's Canadian operations for $5.8 billion, subject to regulatory approval. The acquisition will add Safeway's 214 locations, primarily located in Western Canada, to its portfolio. Sobeys has not yet determined whether it will maintain the Safeway brand post-acquisition.[5] 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.[6][7][8]

In June 2014, Sobeys announced that it would, in the wake of the Safeway purchase, close 60 of its "underperforming" locations. The stores affected are primarily in Western Canada, although some in Ontario and the Atlantic region are also affected.[9][10]

Ready to Serve initiative[edit]

Exterior of a typical Sobeys store, post-"Ready to serve"
Sobeys cash Area. New Brunswick

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.[11]

It was highly stressed upon introduction that it was not simply a new slogan, but a new operating strategy focused on improved customer service. Loblaws, its largest competitor, has much larger stores and puts an emphasis on low prices. Sobeys decided to de-emphasize the price/size war in favour of a customer service upgrade.

The initiative introduced a series of changes intended to improve customer service. Employee uniforms, previously rather formal, were changed to more casual attire and wireless headsets and phones were introduced. Advertising and in-store signage were changed, and the Front End Manager became the Customer Experience Manager. Employees are also trained to be more customer-oriented. Cashiers are required to greet, converse with, and assist customers. This can include packing their groceries for them. The same is required for employees in other departments as well.

At the same time the Ready to Serve initiative was implemented, the logo for the store was also changed. The four green circles were dropped and the logo simply consists of the Sobeys wordmark. The four green circles were however retained in the corporate logo of Sobeys Inc. The term Ready to Serve was added to the exterior of new and renovated stores.

In September 2006, Sobeys introduced a new slogan, a revamped website, and a new advertising campaign. The term Ready to Serve is no longer added to the exterior of new and renovated stores.

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.[citation needed]

Exterior of a typical Sobeys store, pre-"Ready to serve"

Better Food For All[edit]

In the summer of 2013, Sobeys launched a "Better Food For All" campaign which also became the new slogan for the company.[12] Jamie Oliver was brought on as the spokesman of this food-focused movement.[13] With competitors serving a one-stop-shop approach where customers can purchase groceries and general merchandise such as clothing and automotive products, Sobeys sought to distinguish itself in the market as a food-only retailer with an emphasis on high quality food.[12]

As part of this campaign Sobeys carries Certified Humane products that include meat, poultry, eggs, and dairy products.[14] Certified Humane is a non-profit organization created to improve the lives of farm animals by setting rigorous standards for proper living environments, sufficient lighting, humane treatment and handling, adequate space and room for animals to live comfortably and naturally, and ethical slaughter practises.[14] Certified Humane products contain no growth hormones, all-vegetable feed and no antibiotics or steroids.[12] The organization also conducts surprise annual inspections to ensure compliance with its standards.[14]

In addition to the focus on quality food, the Better Food For All campaign explains how a planned meal can be cooked and consumed faster than takeout or fast food.[13] Sobeys provides recipes in their flyers, on their website, and in stores, many of which are Jamie Oliver's and can be prepared in 20 minutes or less.

Private label brands[edit]

The Sobeys private label lineup has carried several names. Initially it was known simply as Sobeys; by the mid-1990s it 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.

Compliments is divided into several sub-brands:

  • Compliments (by itself) is used to denote products comparable with national brands.
  • Premium-tier products are part of the Sensations by Compliments label which was introduced in November 2005.
  • Compliments Balance is a line of health-conscious products which based on the Canadian Food Guide.
  • Organic foods which are certified by Quality Assurance International are offered under the Compliments Organic label.
  • During the Christmas season, from November to early January, special products are sold under the Compliments Collection (previously Compliments Seasonal Collection) name.
  • Compliments Green Care, a line of "eco-friendly" household products, was introduced in 2009.

From 2007 to 2010, Sobeys also offered Compliments Junior, a line of Health Check-certified 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, originally used by Sobeys in the 1990s for a similar range of products. After the Oshawa Group merger, Sobeys had switched to Oshawa's Smart Choice label, and later to Compliments Value.[15]

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

Company[edit]

Needs convenience/Sobeys Gas Bar

In addition to the flagship Sobeys banner, the company also operates supermarkets under a number of banners. After the purchase of Oshawa Group, Sobeys continued to use the existing banners for years, in order to maintain customer loyalty.[citation needed]

IGA and IGA Extra are the main brands 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.[16] An IGA store is also located in mainly French-speaking Edmundston, New Brunswick; it is a rebranded Sobeys location. MarketPlace IGA stores in British Columbia are independently owned by H.Y. Louie,[17] parent of London Drugs, despite carrying Compliments products. Sobeys has reportedly made unsuccessful attempts to purchase the MarketPlace chain.[18]

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.

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 also operates Thrifty Foods, a chain of 29 grocery stores and an online grocery service based in Victoria, British Columbia.[19]

In 2010, Sobeys launched FreshCo, a discount banner. The pilot stores are rebranded Price Chopper outlets in Southern Ontario.[20]

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 and, according to the company, delivers on the grocer’s “better food for all” mission. “This store reflects our mission to bring better food to all Canadians,” said Marc Poulin, Sobeys CEO.

Indeed, the store features extra departments, products–some 5,000 additional SKUs compared to other full-service outlets, along with more experts and services.

The Burlington store is the second store to open under the “Better food for all” concept; the first opened in Sage Creek in early November, but didn’t have all the “extra” services and departments.

Poulin said “Extra” not only refers to new products, but more importantly, it’s about the employees that are interacting with customers–from wellness counsellors, to chefs, and pharmacists–to bring a better customer experience.[21]

Former grocery banners[edit]

  • Commisso's Food Markets in Ontario were rebranded as Sobeys and Price Chopper.
  • Food City from the Oshawa Group in Ontario were mainly rebranded as Price Chopper.
  • Garden Market IGA stores in Western Canada were rebranded as Sobeys.
  • Dutch Boy, a chain in the Kitchener-Waterloo area of Ontario, was rebranded as Sobeys.
  • Knechtel, a small-market grocery store chain under Oshawa Group, was rebranded as Foodland.
  • Lofood, a small discount grocery store, was rebranded as Price Chopper.
  • Calbeck's, an independent chain acquired in 1990, was rebranded as Sobeys, Price Chopper and Foodland

Other Sobeys-owned enterprises[edit]

The company owns the Needs, Sobeys Express, and BoniChoix convenience store chains as well as 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 stores carry items commonly found in a convenience store but also include deli and bakery products, as well as produce. The first trial locations opened in early 2004 in Truro, Nova Scotia and Moncton, New Brunswick but the chain has since expanded into Ontario. The trial locations were converted Needs Convenience stores.

Loyalty programs[edit]

Depending on region and banner, most Sobeys-owned stores offer a loyalty rewards program: either Air Miles or Club Sobeys/Club Thrifty Foods.

Air Miles[edit]

In Atlantic Canada and Quebec, Sobeys/IGA has a partnership with the Air Miles program. One reward mile is earned per $20 spent. In their stand-alone Lawtons drug stores, one reward mile is earned per $10 spent. Points may be redeemed for a variety of items including Sobeys gift certificates.

Unlike most Air Miles merchants, Sobeys and Lawtons accumulate a person's total purchases from one Sunday to the next, then reward based on the total, rather than individual transactions. The result is that two $11 grocery transactions within the week would earn 1 mile, instead of 0. For the Lawtons stores, three transactions of $7 would result in 2 miles. There are other Atlantic Canada drug stores with similar Air Miles programs, but they do not accumulate, and offer no reward if the minimum purchase is not met.

Safeway Canada stores in western Canada and northern Ontario, now also owned by Sobeys, also offer Air Miles rewards at the rate of one reward mile per $20 spent based on accumulated purchases from one Sunday to the next.

In June 2014, Sobeys announced plans to expand its Air Miles participation to Sobeys, IGA, Foodland and Thrifty Foods stores in western Canada and northwestern Ontario in fall 2014, replacing Club Sobeys and Club Thrifty Foods in these areas.[22] Customers in these areas will be able to convert their existing Club Sobeys points to Air Miles.[23] The Club Sobeys program will remain in place at most Ontario locations.

Club Sobeys[edit]

The Air Miles program is not available in Sobeys-branded stores in the rest of Canada due to Air Miles' relationship with Metro in most of Ontario, and its previous arrangement with Safeway in the west. In these markets, the Club Sobeys program is offered instead. One point is earned for each dollar spent. Points may be redeemed for either grocery discounts or Aeroplan miles (at the rate of one mile per two Club Sobeys points). In 2009, the program was expanded into the Thrifty Foods chain as "Club Thrifty Foods", with cards that can be used interchangeably between Sobeys and Thrifty Foods stores.

The Club Sobeys name had been used for a similar loyalty program offered at the chain's Atlantic Canada locations during the 1990s, prior to Sobeys securing the regional rights to Air Miles through the Oshawa Group merger.

In the Club Sobeys region, Sobeys also introduced, in partnership with Citibank Canada, a Club Sobeys MasterCard credit card under the "Compliments Everyday Banking" banner. 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). This allows cardholders to earn double Club Sobeys points (or Air Miles rewards) for purchases at Sobeys stores (i.e., two Club Sobeys points per dollar spent, or two Air Miles per $20 spent), as well as the normal rate of earned rewards anywhere else they use the card. Club Sobeys points earned through a BMO MasterCard cannot be transferred to Aeroplan due to that program having different credit card partners.

Locations[edit]

Alberta[edit]

62 locations:

British Columbia[edit]

2 locations:

Manitoba[edit]

17 locations:

New Brunswick[edit]

24 locations:

Newfoundland and Labrador[edit]

14 locations:

Nova Scotia[edit]

42 locations:

Ontario[edit]

89 locations:

Prince Edward Island[edit]

5 locations:

Saskatchewan[edit]

9 locations:

Empire Company[edit]

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 Empire Theatres, Canada's second-largest movie theatre chain, as well as many commercial retail properties through subsidiary Crombie REIT.

See also[edit]

References[edit]

  1. ^ a b "2012 Annual Report". Empire Company Limited. Retrieved 2013-07-20. 
  2. ^ Two CEOs dined, one got Apple Pie, Konrad Yakabuski, The Globe and Mail, July 23, 2005. Accessed March 25, 2007.
  3. ^ Sobeys buys Thrifty, gains foothold in BC, Marina Strauss, The Globe and Mail, July 16, 2007.
  4. ^ Sobeys signs grocery deal with Target, Evra Taylor, Marketing Magazine, September 23, 2011.
  5. ^ Ladurantaye, Teve (June 13, 2013). "Sobeys to buy Safeway in $5.8-billion deal". Globe and Mail (Toronto). Retrieved June 12, 2013. 
  6. ^ "Canada Safeway's changeover a co-operative effort". Regina Leader-Post. Retrieved 24 May 2014. 
  7. ^ "Four Winnipeg Safeway stores sold to Red River Co-op". Winnipeg Free Press. Retrieved 24 May 2014. 
  8. ^ "All Victoria Safeway stores sold to Overwaitea Food Group". Times-Colonist. Retrieved 24 May 2014. 
  9. ^ "Sobeys to shut Amherst Foodland and 5 stores in N.B.". CBC News. Retrieved 26 June 2014. 
  10. ^ "Sobeys closing 50 underperforming stores across Canada". CBC News. Retrieved 26 June 2014. 
  11. ^ Grocery business faces sea change, Gordon Pitts, The Globe and Mail, July 20, 2005. Accessed March 12, 2007.
  12. ^ a b c [1]
  13. ^ a b [2]
  14. ^ a b c [3]
  15. ^ Jon Springer, "Sobeys Expands Premium Label", Supermarket News, 21 September 2009
  16. ^ Sobeys to convert IGA stores to Sobeys brands, CBC News, August 28, 2006.
  17. ^ H.Y. Louie Co. Limited to join IGA International, IGA Press Release, February 10, 2005.
  18. ^ Sobeys buys Thrifty, gains foothold in B.C., Marina Strauss, The Globe and Mail, July 17, 2007
  19. ^ http://www.timescolonist.com/business/victoria-grocers-ready-for-amazon-delivery-invasion-1.680728 Victoria grocers ready for Amazon delivery invasion Times Colonist October 31, 2013
  20. ^ http://www.cbc.ca/consumer/story/2010/05/12/sobeys-freshco-price-chopper.html.  Missing or empty |title= (help)[dead link]
  21. ^ http://www.canadiangrocer.com/top-stories/food-discovery-on-display-at-the-new-sobeys-extra-35061
  22. ^ Sobeys Inc. (2014-06-24). "Sobeys to Launch AIR MILES Reward Program at Additional Banners in Western Canada". CNW Group. Retrieved 2014-06-25. 
  23. ^ "Club Sobeys FAQ". Retrieved 2014-06-25. "Every Club Sobeys point western customers currently have or earn before the fall launch can be converted to AIR MILES reward miles." 

External links[edit]