Safeway Sells Canadian Operations to Sobey's

[BigNumbers]

Well that was quick.... Sobeys is closing 50 stores in western Canada!

That's a lot of empty stores.... Hopefully save on makes a move into Alberta to pick those stores up....

http://www.calgaryherald.com/touch/index.html

[DownhillGoat]

Originally Posted by BigNumbers

That's a lot of empty stores.... Hopefully save on makes a move into Alberta to pick those stores up....

Save-on bought the one in Cochrane (it was only 6 months old). The store sucks now.

[Resolute 14]

There are already three Save-On locations in Calgary. Seems likely that they might pick up some (additional) locations from Sobeys.

[terminator]

Originally Posted by newts

Margins at the store are less than that. In the grocery business, only a fraction of the money is made at the store. The majority is made via inside programs with food suppliers who sell goods to the grocery chain.

As someone who used to work for one of the biggest food companies in the world, the cost to do business with a national grocery chain can be ridiculous. To buy one little ad in a flyer can run 100k+ in one week depending on how much volume the ad can generate.

I've seen some competitive food categories where vendors pay a program cost (rebate to the grocery chain based on how much the chain purchases) of upwards of 30%. Ie. a grocery chain buys $20,000,000 of a particular category from a vendor to supply its stores, they get $6mm back in rebates.

Listing fees are another huge revenue generator for grocers, which would be the cost for a vendor to start selling a new product with a particular grocery chain. I recall one chain who used to charge 40,000 per new item. Then they'd charge you again to delist the item when they wanted to get rid of it due to poor sales at the store.

One chain used to be notorious for penalizing vendors who who fund pricing initiatives at competitive chains. Say that one grocer received ad funding from a vendor to establish a low price one week on a product in the grocers weekly flyer, and say they undercut another grocery chain by $1.00 for that week on that product. The other grocery chain would send a "debit" at the conclusion of that ad due to the price protection it provided to their customers. Ie. Mr. Supplier, here's a bill for $50,000, because we price matched 50,000 units for $1 less our normal price due to the hot ad you ran with one of our grocery competitors last week.

There was even a recent situation where a grocer told their vendors that they were going to knock 1% off of what they owed their vendors because of escalating costs that the grocer was incurring that year for company initiatives to optimize their stores and their business.

These grocers have their vendors by the balls, so they can demand ridiculous amounts of "inside money" from them in order for those vendors to keep their products listed within the grocery chain.

So this is why you see all of these loyalty programs, and why stores run razor thin margins. It's to grow market share so they can continue to suck the real profits from their suppliers.

Also eye height shelf space is the most expensive for Vendors, no? Hence CocaCOla and Pepsi occupy those spots.

[Regular_John]

While it's not really a full grocery store, I'm really starting to love "The Box by No Frills" on Elbow drive for picking up odds & ends in a pinch.

It's basically the same no-name/president's choice products that Superstore has, without the mind numbingly frustrating shopping experience. It's still relatively new, but even the staff don't seem to have had the will to live beaten out of them yet. The selection isn't crazy extensive, you'll find maybe 2 caesar salad dressings instead of 6, but the prices on the shelf are all in, and I've been hard pressed to break the $40 mark on two bags of groceries there.

Honestly wouldn't mind seeing more of these types of stores around the city.

[Street Pharmacist]

Originally Posted by jaydorn

While it's not really a full grocery store, I'm really starting to love "The Box by No Frills" on Elbow drive for picking up odds & ends in a pinch.

It's basically the same no-name/president's choice products that Superstore has, without the mind numbingly frustrating shopping experience. It's still relatively new, but even the staff don't seem to have had the will to live beaten out of them yet. The selection isn't crazy extensive, you'll find maybe 2 caesar salad dressings instead of 6, but the prices on the shelf are all in, and I've been hard pressed to break the $40 mark on two bags of groceries there.

Honestly wouldn't mind seeing more of these types of stores around the city.

That's the trend and the reason Loblaws bought shoppers. Access to smaller, more convenient neighbourhood stores. You will likely see more food offerings in shoppers

[nik-]

That sucks ... I was hoping the awful Safeway in my neighbourhood would get converted.

[DoubleK]

Is there a list of stores that are going to close? I can't find it on the Empire website. Just the Q4 release.

[Locke]

Originally Posted by DoubleK

Is there a list of stores that are going to close? I can't find it on the Empire website. Just the Q4 release.

Well, I know the Sobeys in Douglasglen and Acadia are getting closed at least.

[getbak]

Five in Calgary: Deer Point Sobeys and Fairmount Sobeys both scheduled to close on July 31; and London Town Sobeys, Douglas Square Sobeys and the Ogden/Glenmore Square Safeway, which will not close before the fall of 2014.

[Derek Sutton]

They are closing one here in Lethbridge on the south side. I worked there for 9 years but left in 2007. It had been a franchise until last Tuesday, the owners were given untill midnight that day to clean all there stuff out and Sobeys was taking over, they announced yesterday it was closing July 31.

[brocoli]

Pincher Creek is also closing. Tough in a small town when 42 people lose thier jobs.

[DoubleK]

Originally Posted by brocoli

Pincher Creek is also closing. Tough in a small town when 42 people lose thier jobs.

Maybe Overwaitea will pick up this location.

[Derek Sutton]

Originally Posted by brocoli

Pincher Creek is also closing. Tough in a small town when 42 people lose thier jobs.

I was told that full timers are getting a decent severance for the retail industry, my friend is getting 10 wks. But yah it sucks. I was always of the belief that they would close the Safeway stores (higher wages, more inventory) and drive business to the Sobeys stores. I guess they are going to do the opposite.

[Derek Sutton]

Originally Posted by DoubleK

Maybe Overwaitea will pick up this location.

In Taber Co Op took over the Safeway as a sale was forced by the competition bureau, the employees went with the store in that case. I know that is different then when a company closes store.

[ranchlandsselling]

Is there a list provided by Sobey's out there?

[speede5]

Moose Jaw store closing in Sept. Employees got notice yesterday.

[fundmark19]

Sobeys had just built a brand new building in Cochrane and about a month or two after it opened and this deal went through it is now a Save On Foods

[Buff]

Originally Posted by Derek Sutton

They are closing one here in Lethbridge on the south side. I worked there for 9 years but left in 2007. It had been a franchise until last Tuesday, the owners were given untill midnight that day to clean all there stuff out and Sobeys was taking over, they announced yesterday it was closing July 31.

The article that was posted a few posts up indicates that it is the northside Safeway that is closing. Which makes sense because my wife will drive across town on 15% Tuesday to shop there instead of the much busier southside location.

[Derek Sutton]

Originally Posted by Buff

The article that was posted a few posts up indicates that it is the northside Safeway that is closing. Which makes sense because my wife will drive across town on 15% Tuesday to shop there instead of the much busier southside location.

Actually both stores are closing, I hear the Lucerne plant is closing as well but cannot find anywhere to confirm that one yet though.