The Great Grocery Mystery is over — the new owner of four Canada Safeway stores in Winnipeg is Red River Co-op.
It’s the latest domino to tumble since Sobeys Inc.’s $5.8-billion purchase of Safeway and its 213 stores across Western Canada in June.
Last October, the federal Competition Bureau ruled that Halifax-based Sobeys had to sell 23 of the acquired stores to other grocery store operators to avoid overconcentration in the market.
Now the locations at 1441 Main Street, 77 Vermillion Road, 850 Dakota Street and 1120 Grant Avenue will be owned by a company best known for its gas bars, car washes and convenience stores but one that also has a history in the food business.
A deal for the fifth store Sobeys has to sell off in Winnipeg, the Price Chopper on Pembina Highway, is in the process of being finalized to an unnamed suitor.
Red River’s parent company, Federated Co-operatives Ltd., has agreed to buy 10 other Safeway, Sobeys and IGA stores, including four in Edmonton and one each in Regina, Saskatoon, Taber, Wetaskiwin and Fort Saskatchewan.
Overwaitea Food Group has agreed to buy 15 other stores, including three under the Thrifty Foods banner, across Alberta and B.C. (Through the negotiation of these transactions, Sobeys agreed to sell another seven stores in the two western-most provinces.)
A spokesperson for Red River said it wouldn’t comment on the deal until a Friday morning press conference.
Red River opened its first general food store in Winnipeg in 1948, expanded quickly and continued to operate them until 1983. After 35 years, however, with the company losing money and in dire financial straits, the decision was made to sell off the food stores and focus on the gasoline business.
The sale of the 30 stores, which will bring in about $430 million, has received regulatory approval and is expected to close in March or early April.
The proceeds will be used to pay down bank debt. The annual sales from the stores is about $690 million and they generate about $59 million of earnings before interest, taxes, depreciation and amortization (EBITDA).