How Canada Safeway acquisition is impacting Sobeys
One year in, the business has surpassed its first year target for realised synergies and is confident of hitting its three-year $200m target. The retailer has almost completed the first phase of integration which has been focused on converting the Safeway business to Sobeys’ IT systems. Once this is complete next Spring, more similar programs will be seen across the business. Learnings and best-practices are also being taken from Safeway to improve the broader Sobeys business. Sobeys also announced the divestment of two bread facilities which were acquired as part of the Safeway business, following its announcement earlier this year to divest similarly acquired dairy assets.
One of the most visible elements of the acquisition has been the recent appearance of Sobeys’ Compliments range of private label products in the Safeway stores. Although private label harmonisation is only just underway, the long-term plan is to convert all of Safeway’s ranges to the relevant Sobeys brand. However, the integration is being undertaken on a product-by-product basis rather than the blanket introduction of Sobeys’ ranges.
While the integration process is a significant undertaking for the business, Sobeys continues to focus on driving its core operations. Consumers are responding well to the differentiated programs which it is introducing to the market as part of its ‘Better food for all’ strategy. It is also pushing ahead with the launch of new store formats, notably its Sobeys Extra format, and while the market remains competitive, it is optimistic that it will be more rational going forward as competitor new space openings ease off. The recent reduction in gas prices is also expected to help by easing household budget pressures.
Source: igd.com
