Canadian Packaging

Canadian Food Fight

Grocer wars continues with Sobeys closing stores across Canada.


July 3, 2014
by Canadian Packaging Staff

After purchasing Safeway Canada for $5.8-billion in June of 2013—adding 214 Safeway locations mostly out in western Canada, Sobeys Inc. has announced it is closing some of its own underperforming namebrand stores—and while reports are sketchy regarding actual numbers, some media suggest it could be up to 60 stores—an exact figure has not been released—with the majority of the closures occurring out in Western Canada.

It’s been a tough and complex past few years in the grocery segments, with Loblaw Companies Ltd. recently acquiring Shoppers Drug Mart for $12.4-million; Target Corp. of the U.S. adding some 130 stores across Canada, and; Walmart Canada continuing to add more and more super-center retail and full supermarket outlets.

Sobeys Inc., headquartered in  is the second-largest food retailer in Canada (after Loblaw), with over 1,500 supermarkets in 10 provinces with 2012 sales of over $16-billion.

In regards to its Safeway deal, as a condition of the deal imposed by the Canadian Competition Bureau, Sobeys had to sell 23 stores, but ended up selling 29 stores: 15 to Overwaitea Food Group (mostly in B.C. and Alberta) and 14 stores to affiliates of the Federated Co-operatives (mostly in Alberta, Saskatchewan, and Manitoba) for $430 million in total. The 29 stores sold in clouded 18 former Safeway stores.

The proposed Sobeys store closings would save the company almost $170-million, but it is suspected that over $137-million of that would go towards employee severance packages as well as the cost to close the stores.

A Sobeys store in St. Stephen, New Brunswick currently has over 1,000 on-line signatures in an attempt to save the outlet set to close its doors on July 5, 2014.

In an unrelated story, a group of 20 striking and locked-out Loblaw workers in Quebec walked 650 kilometers to company headquarters in Brampton, ON, but were not granted a chance to talk with company officials.

These locked out and striking workers have been off the job for one to nearly two years already, coming from:

  • Maxi store in Rouyn-Noranda – locked out in August 2012;
  • Provigo store in Témiscaming – locked out since December 2012;
  • Loblaw store in Rouyn – closed after a strike since June 2013.

The walking strikers began their journey on June 15, 2014 and walked in pairs relaying each other every five kilometers.