Empire Company Ltd., an umbrella company for Safeway, Sobeys and numerous other grocery chains, has aggressively expanded into Western Canada in the past year.
On Jan. 25, it released a statement disclosing that six Safeway locations in Alberta, including St. Albert’s Gateway Village Mall location on Hebert Rd., would be converted to FreshCo grocery stores.
Gateway Safeway will close in the spring at an unspecified date and reopen in the fall once renovations to the 38,000-square-foot building are completed. Throughout renovations, the Safeway pharmacy team will continue to serve customers at a temporary location near the food store.
In a telephone interview, Mike Venton, general manager of Discount Format for Sobeys, explained the transformation is due to various market drivers.
“We looked at Western Canada and realized our company wasn’t represented by a low-price discount store. We were strictly high-end. We had a saturation of Sobeys and Safeway stores, sometimes only blocks apart or even across the street. We looked at the ethnicity and what type of business appeals to the community,” said Venton.
After price-checking competitors and doing web scrapes for information, Empire decided to convert a quarter of its lower-performing Safeways to FreshCos.
There are currently 116 FreshCo stores open in Canada, including locations in Ontario, Manitoba, Saskatchewan and British Columbia. Two locations are set to open in Edmonton this spring at Heritage and Tamarack.
“If we compare it to a conventional grocery store, we have the same brands, the same items, but we would not have the assortment," Venton explained.
What is missing is a deli counter, seafood service and fresh meat service. Seafood and fresh meat are sold prepackaged minus the special services available at more high-end stores.
“The cashier rings in the groceries and you bag your order.”
Venton views opening the grocery discounter in Alberta as a new company milestone, especially with the province’s economic realities shifting dramatically.
“We didn’t look to opening in Alberta because of the economy, but now that it’s getting tougher, people will have more options.”
United Food and Commercial Workers (UFCW) Local 401 has gone on record stating it believes the move is “destabilizing” for employees.
Sobeys stated in an email it is working with the union and impacted employees and plans to offer options varying from fair severance to transfers to other Safeway or FreshCo locations.
Venton added the new FreshCo will be owned and operated by a locally based franchisee.
“We handle the real estate and create the loan. But we want a community person.”
The five other locations announced for transition were FreshCo Millbourne Mall, FreshCo Coliseum and FreshCo Pallisades Square in Edmonton, as well as Calgary’s FreshCo Brentwood and Chalo! FreshCo Saddle Ridge.
“We’re very excited about it. Every province we’ve entered, we’ve had a good reception. We’ve opened nine stores since COVID. Alberta is more economically challenging, but it has a diverse clientele with an opportunity for us to develop new markets. It will help Empire get to a base that has not always been accessible, and it keeps us inspired to open new businesses.”
Empire employs 127,000 workers, and in its 2020 reported fiscal year it earned $596.8 million with adjusted net earnings.