Four city Safeway locations being converted to FreshCos

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This article was published 10/06/2020 (2111 days ago), so information in it may no longer be current.

Sobeys is turning to discount food stores as the COVID-19 pandemic has more consumers tightening their grocery budgets.

The grocery store chain announced Tuesday it will turn four current and former Safeways in Winnipeg into FreshCos, the company’s discount grocery chain, by spring 2021.

“The market has changed,” said Sylvain Charlebois, a professor at Dalhousie University who researches food distribution and policy.

People have been eating at home more during the pandemic, which has required them to shop for groceries more, Charlebois said.

And with the economic downturn, customers will be looking for cheaper prices, he said.

“FreshCo, like No Frills in Ontario, are perfect banners to accommodate consumers on a tight budget,” Charlebois said.

He called Sobeys’ move “unsurprising” given the times.

Empire Company Limited, the corporation that owns Sobeys, announced in December 2017 that it would convert up to 25 per cent of its 255 Safeway and Sobeys stores in Western Canada to FreshCos due to underperformance.

Now it costs even more to operate grocery stores because of the pandemic, Charlebois said. There’s plexiglass screens, gloves and other sanitation materials to pay for.

“(That’s) on top of the fact that a lot of people are earning more because they’ve received an increase in wages, so grocers can keep and retain their talent,” Charlebois said.

Grocers like Sobeys can cut costs by converting their locations to discount stores, Charlebois said.

“Over the next few years, I do expect a lot of conversions, and closures, even,” he said of the grocery store industry.

The Safeways on Sargent Avenue, in Niakwa Village, at Pembina Highway and McGillivray Boulevard, and at Henderson Highway near Bronx Park, will undergo renovations to become FreshCos beginning this September.

Three of the four locations are still open as Safeways. The Henderson store closed in 2015.

While the Safeways-turning-FreshCos in Winnipeg are closed for construction, their pharmacies will be accessible to customers. The pharmacies will be set up in temporary spots at or near their current locations.

The new FreshCos will have pharmacy departments. Customers’ files will be transferred from Safeway to FreshCo pharmacies, and there won’t be interruptions in patient care.

Empire Company Limited announced Tuesday it will open a FreshCo and a Chalo! FreshCo in Alberta. Two new FreshCos will open in British Columbia this month, and four will open in Saskatchewan this summer.

“The FreshCo banner will provide tremendous value to customers as the economy reacts to the impacts of COVID-19,” Mike Venton, the general manager of Sobeys discount format, said in a written statement.

FreshCo offers several savings options. Customers who can’t find a product they saw in a flyer will get a rain check and 10 per cent off the advertised price. FreshCo price-matches, and they’ll replace and reimburse a product if a customer isn’t satisfied.

There are 16 FreshCo stores open across British Columbia and Manitoba already.

Sobeys opened its first two Winnipeg FreshCo locations in May of 2019. They’re around 45,000 square feet, and they include Cantor’s Express butcher counters, which are run by Winnipeg family-owned Cantor’s Quality Meats & Groceries.

One store is at Jefferson Avenue and McPhillips Street, and the other is at Regent Avenue and Lagimodiere Boulevard.

The shops’ openings came more than five years after Sobeys bought the Western Canadian chain of Safeway stores for $5.8 billion.

Empire Company Limited will announce opening dates for the four new FreshCo locations in Winnipeg when they’re confirmed.

gabrielle.piche@freepress.mb.ca