Sobeys Buys Canada Safeway

News & Discussion from the grocery retailers in the Canadian provinces & territories
pseudo3d
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Re: Sobeys Buys Canada Safeway

Post by pseudo3d »

Recent news say that Empire (parent company of Sobeys) took a billion-dollar writedown because of the Safeway acquisition. Same store sales did increase, but the company blamed the economy and the "operational issues" with Safeway stores.

http://sonoranweeklyreview.com/empire-r ... -tseemp-a/
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Re: Sobeys Buys Canada Safeway

Post by storewanderer »

This is not going so well...
http://business.financialpost.com/news/ ... omers-away

It is funny how the US Safeway operation ran this Canada division pretty well and this Canadian ownership has screwed up.

Of course the reason the US operation ran Canada well was since all of the brands and packages in Canada have to be different than the US due to the English/French labeling requirement. This meant the Canada Safeways stayed properly merchandised for their market not the cookie cutter merchandising attempted on the US operations.

Sobeys private labels look quite bush league. Their point of sale system is a joke (you have to tell the cashier actual card type being used e.g. Visa, MasterCard, Debit, etc.). When I walked a newer Thrifty Foods in BC back in 2014 and saw that thing compared to a Canada Safeway I knew this was not going to end well. Thrifty Foods was more at the level of a Save Mart, at best, on merchandising storewide and on quality. Actually maybe a little worse than a Save Mart.
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Re: Sobeys Buys Canada Safeway

Post by pseudo3d »

storewanderer wrote:This is not going so well...
http://business.financialpost.com/news/ ... omers-away

It is funny how the US Safeway operation ran this Canada division pretty well and this Canadian ownership has screwed up.

Of course the reason the US operation ran Canada well was since all of the brands and packages in Canada have to be different than the US due to the English/French labeling requirement. This meant the Canada Safeways stayed properly merchandised for their market not the cookie cutter merchandising attempted on the US operations.

Sobeys private labels look quite bush league. Their point of sale system is a joke (you have to tell the cashier actual card type being used e.g. Visa, MasterCard, Debit, etc.). When I walked a newer Thrifty Foods in BC back in 2014 and saw that thing compared to a Canada Safeway I knew this was not going to end well. Thrifty Foods was more at the level of a Save Mart, at best, on merchandising storewide and on quality. Actually maybe a little worse than a Save Mart.
Merchandising items as three items deep is always an all-round total disaster unless you run a particularly back-water low-volume store, like an IGA in the heart of redneck country. What is Sobeys doing?!
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Re: Sobeys Buys Canada Safeway

Post by storewanderer »

Sobeys appears to take merchandising ideas out of the late A&P playbook. Three items deep might work in the drug department or the hardware display. In theory it could work on slow moving lunchmeat and high cost dairy items but in practice I have not really seen that work too well in a grocery store.

They probably should have just let Safeway Canada be and leave it alone... including its private label program. I assume they would be legally allowed to use "Safeway" brand for private label since they have the store name?

Loblaw must be enjoying this. They are a pretty good operator. Excellent private label program (President's Choice).
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Re: Sobeys Buys Canada Safeway

Post by marshd1000 »

Since Cerberus seems keen on buying distressed chains like Haggen and the remnants of A&P, would they want to buy Sobeys or just only Canada Safeway?
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Re: Sobeys Buys Canada Safeway

Post by storewanderer »

I think until they can start showing profitability the growth of the Albertsons empire is being temporarily kept at bay. To be fair they do have some digesting to do based on the past nine months.
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Re: Sobeys Buys Canada Safeway

Post by pseudo3d »

I don't think it would be a good idea to get back into Canada anyway. American retailers have shown a pretty poor track record in Canada in recent years, and the only American retailers that have done well are "legacy" stores out of another era (Safeway, A&P, Sears). Even if Albertsons was doing wonderfully, enough to get Kroger running scared, it would be a far better (and more economical) approach to focus on rebuilding the lost empire.
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Re: Sobeys Buys Canada Safeway

Post by storewanderer »

I wonder what will happen. Safeway Canada was very viable and very profitable. Wal Mart and Home Depot seem to do okay in Canada and the Wal Mart Supercenters up there are quite similar to the ones in the US. Loblaws "Real Canadian Superstore" is VERY similar to a Kroger Marketplace in its mix but feels simpler. I don't know how to describe it (that was my favorite store in Canada). All stores in Canada have quite a few less items/size/flavor varieties than down here in the US and prices tend to be higher. Less "deep discount specials" too. I think more "down to Earth" retailers do fine in Canada. Canada appears to like a simple good item and relatively easy to shop store (but they love their air miles based on what they buy) but not looking for anything too flashy. Retailers who try to play the trend and "we're cool" game (Target) don't quite hit the mark in Canada.
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Re: Sobeys Buys Canada Safeway

Post by pseudo3d »

storewanderer wrote:I wonder what will happen. Safeway Canada was very viable and very profitable. Wal Mart and Home Depot seem to do okay in Canada and the Wal Mart Supercenters up there are quite similar to the ones in the US. Loblaws "Real Canadian Superstore" is VERY similar to a Kroger Marketplace in its mix but feels simpler. I don't know how to describe it (that was my favorite store in Canada). All stores in Canada have quite a few less items/size/flavor varieties than down here in the US and prices tend to be higher. Less "deep discount specials" too. I think more "down to Earth" retailers do fine in Canada. Canada appears to like a simple good item and relatively easy to shop store (but they love their air miles based on what they buy) but not looking for anything too flashy. Retailers who try to play the trend and "we're cool" game (Target) don't quite hit the mark in Canada.
I know Walmart bought their way in by buying the Woolco stores in 1994 from Woolworth (another early legacy retailer). Home Depot was also a buy-in with Aikenhead's Hardware. Unlike Zellers and Target, I'm betting the operations were more similar to the operations they acquired than forcing it to be more like their American counterparts (one of the things that led to Target Canada's demise, I'm sure).

As for RCS, they actually did open a few stores as Real Superstore in the 1980s in Louisiana with a similar product mix (food-leaning, though a few items like clothes). They ultimately sold out to Schwegmann (which went out of business within 7 years, I believe) and that led to a few interesting things like A&P operating a few huge format stores that they didn't quite know how to run (over 100k square feet).
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Re: Sobeys Buys Canada Safeway

Post by wnetmacman »

pseudo3d wrote:As for RCS, they actually did open a few stores as Real Superstore in the 1980s in Louisiana with a similar product mix (food-leaning, though a few items like clothes). They ultimately sold out to Schwegmann (which went out of business within 7 years, I believe) and that led to a few interesting things like A&P operating a few huge format stores that they didn't quite know how to run (over 100k square feet).
RCS, the Real Canadian Superstore, is a division of Loblaw. Loblaw had two remaining divisions in the US by 1995; New Orleans and St. Louis. St. Louis went to Schnuck's.

The Real Superstores that opened here (New Orleans, Baton Rouge, and Lafayette) were unlike any stores here at the time, and were pretty successful. Their undoing was Loblaw wanting to divest its US holdings. The New Orleans stores were sold to Schwegmann, who operated them only for a few years before closing them. All of these large stores did not go to A&P. Only one of them did. Schwegmann had already closed them before selling a handful of stores to A&P. Lafayette closed in 1997 and never reopened, being torn down for a theater. Baton Rouge still stands, but has been repainted. There were two stores in New Orleans; one in NO East was torn down before Katrina. A Westbank store (the lone A&P sale) is now Hobby Lobby.
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