Retail News Breaks Archives
Sobeys to shutter 50 underperforming stores
June 26th, 2014
STELLARTON, Nova Scotia – Sobeys Inc. says it is closing about 50 underperforming grocery stores as it seeks cost savings following the acquisition last year of Safeway Canada.
The operator of Canada’s second-largest supermarket chain paid $5.7 billion last year to pick up 213 stores in western Canada bearing the Safeway banner, as well as 199 in-store pharmacies, 62 co-located fuel centers, 10 liquor stores, four distribution centers and 12 manufacturing plants.
Sobeys funded the deal in part by selling $1 billion in real estate assets and leasing them back.
At the time of the deal, Marc Poulin, Sobeys president and chief executive officer, projected that the company would find $200 million in cost savings over three years of operating the former Safeway outlets. Late last year Sobeys told suppliers to its western Canada stores that they would have to pare their prices by 1% and drop planned price increases for 2014.
Sobeys said the stores to be closed were identified following a review of operations. The company owns or franchises more than 1,500 stores across Canada under several banners that include Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods and Lawton’s Drug Stores.