Safeway Sells Canadian Operations to Sobey's

[Igster]

Originally Posted by Violator

Its called Save-on foods

best of both worlds

Nope. Their meat prices are good, but other than that, Safeway beats their prices on almost everything else. Especially produce which they rape you on at Save-On.

[puckluck2]

Originally Posted by Igster

Especially produce which they rape you on at Save-On.

Maybe dress appropriately for a grocery store!

[Hack&Lube]

Originally Posted by an hero

I miss Safeway from the US.

The Safeway here is a joke and a spitting image of the other national chains, with a few extra selections.

To me this exemplifies a number of US chains that come here and instead of bringing the products and prices that draw us to that US brand, they're just like Superstore and Zeller's.

What's American safeway like?

[cKy]

Originally Posted by Hack&Lube

What's American safeway like?

It sells booze, therefore it is better.

[The Big Chill]

Originally Posted by cKy

It sells booze, therefore it is better.

Exactly what I was thinking. Who cares about the rest of the shopping experience, there is a huge wall of beer for a fraction of the price it is here!

[habernac]

Originally Posted by The Big Chill

Exactly what I was thinking. Who cares about the rest of the shopping experience, there is a huge wall of beer for a fraction of the price it is here!

was just in Hawaii buying beer at the local Safeway. Good times!

[bizaro86]

Pretty much the same except for the addition of beer and the subtraction of airmiles. Also, I was surprised that my phone number (with area code) worked as a club card at a safeway in California. I'm not sure if it still will now that they're separate. Probably not.

[CaramonLS]

Originally Posted by Hack&Lube

What's American safeway like?

They have a bar and beer on tap in stores in PHX.

[Yeah_Baby]

Originally Posted by OldDutch

I can vouch that at least one of them was not. My wife's co-worker was the proud winner of a copy of "Bon cop Bad Cop". However I don't think it was ever claimed....

My mother won a 20 cd prize pack from a cfl game once.

I know. Cool story bro.

[Violator]

Originally Posted by Igster

Nope. Their meat prices are good, but other than that, Safeway beats their prices on almost everything else. Especially produce which they rape you on at Save-On.

Probably cause they don't have a dc in Calgary(its in my home town)

I'm just used to shopping back home were the price on produce is half the price of Calgary.

[Shawnski]

Originally Posted by bizaro86

Pretty much the same except for the addition of beer and the subtraction of airmiles. Also, I was surprised that my phone number (with area code) worked as a club card at a safeway in California. I'm not sure if it still will now that they're separate. Probably not.

It won't anymore, either now or shortly.

I was at Safeway today and Club Cards are no longer required or used.

[Byrns]

Probably won't need the card in the US Safeway stores either since they've been bought out by Albertson's down there...

[an hero]

Originally Posted by cKy

It sells booze, therefore it is better.

Quoted for truth.

Originally Posted by Hack&Lube

What's American safeway like?

They sell far more diversity of products than the Canadian Safeway. Even before the Sobey's thing, here you'd still expect them to mostly carry the same food as Walmart, Sobey's, Superstore, No Frills, etc., and besides Walmart's price matching, they're a lot like the gas stations on petrol and don't compete much.

While there are some same products in the American Safeway as, say, Walmart, Target, or Nob Hill, they have a far wider selection of frozen food, dairy, canned food, and without a doubt, junk food. Then of course they tend to have two or three aisles dedicated to wine, beer, and liquor.

Sufficed to say, I like the American Safeway better, just need to moderate how much crap one buys. It's pretty easy to get carried away from the (cheap) excess of junk in American grocery stores.

[Calgary14]

I was just in Sobeys and saw an ad for their loyalty program. Do you really need to spend $750 to get $5 off?!?!

[Street Pharmacist]

I keep seeing things like this mentioned about loyalty programs. There all like this for grocery. Why? Margins are razor thin in grocery. Maybe 8-11%. A loyalty program that gives back even 1% is actually 10 % percent of their entire profit margin. Then wages, rent, etc come off. That is actually a lot when you do the math

[Fozzie_DeBear]

Originally Posted by Street Pharmacist

I keep seeing things like this mentioned about loyalty programs. There all like this for grocery. Why? Margins are razor thin in grocery. Maybe 8-11%. A loyalty program that gives back even 1% is actually 10 % percent of their entire profit margin. Then wages, rent, etc come off. That is actually a lot when you do the math

I'm guessing the basic business model logic is

Small profit in my grocery store > Small profit in competitor grocery store

And if each transaction only gives you a small profit, you need to make up for it on volume

[Street Pharmacist]

Originally Posted by Fozzie_DeBear

I'm guessing the basic business model logic is

Small profit in my grocery store > Small profit in competitor grocery store

And if each transaction only gives you a small profit, you need to make up for it on volume

Customers with loyalty cards shop more and buy more per shop, that's why you see them everywhere.

What people need to understand about grocery is that it's huge overhead and slim margins. Your simply not going to get high returns on your purchase with a loyalty program

[newts]

Originally Posted by Street Pharmacist

I keep seeing things like this mentioned about loyalty programs. There all like this for grocery. Why? Margins are razor thin in grocery. Maybe 8-11%. A loyalty program that gives back even 1% is actually 10 % percent of their entire profit margin. Then wages, rent, etc come off. That is actually a lot when you do the math

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.

[albertGQ]

^^^

Wow. That's very interesting. Never knew that. Thanks for sharing

[Street Pharmacist]

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.

I always assumed this was going on, but the nuts and bolts weren't clear to me. Thanks, that's really eye opening. As an owner of a retail store I always assumes the real profits were higher up the "food chain" (pun intended)