Sobeys announced this week that it will turn around a quarter of their 255 Sobeys and Safeways in Canada into FreshCo stores. The announcement comes on the heels of continued loses financially and with cuts to employment. Stores have also been closed in several markets. The increases in minimum wages in Ontario and Alberta has the company spooked as well.
To counter the fact that Sobeys often has a competing store of Safeway almost directly across the street in some cases (Kenaston being a prime example), the company is looking to remedy that fact. Rather than close even more stores and inviting more competition from Save on Foods or Red River Co-op, the company is looking to brand some of the stores as FreshCo.
FreshCo is the offspring of Price Chopper and most of the Ontario stores once carried that banner. Winnipeg’s Price Chopper was sold to satisfy federal government rules on competition. Northwest Company shut it down in favour of Giant Tiger. It was once thought though that the Winnipeg store might one day carry the FreshCo banner,
The sharing of one flyer between Sobeys and Safeway has become as untenable as when Best Buy and Future Shop did the same thing. Eventually, the consumer asks why go stores that list the same prices and are in proximity to one another.
The solution it would seem is to have FreshCo cater to local ethnic groups and tastes and offer different things than what Safeway and Sobeys does. Given the loss and incompetency of the merger, it would seem some haste is required in righting the ship. There is probably a market for low cost, targeted marketing in fresh food, frozen items and ethnic specialty items. The timeframe is closing as Amazon-owned Whole Foods is likely to expand again soon and more national ethnic food stores look at making a splash in Winnipeg.
Expect to see FreshCo some time in the new year.
This has been a editorial by John Dobbin.
To read more from John, visit his blog Observations, Reservations, Conversations