Winnipeg’s grocery wars heat up

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This article was published 03/02/2016 (3502 days ago), so information in it may no longer be current.

Two of the big guns have bolstered their retail arsenal in the last week, and one has also launched an aggressive new marketing initiative as the grocery war heats up in Winnipeg.

Not only did Walmart and Sobeys each open another big-box store in the city late last week, Sobeys also launched an aggressive new marketing initiative aimed at luring more shoppers to its Sobeys and Safeway outlets with the promise of more choice, better quality and lower prices.

“Our customers have told us what matters most is better, fresh produce, and that’s why we’re investing in improving assortment, enhancing quality and providing more expertise and food knowledge — all at affordable prices,’ said Scott Chollak, vice-president of operations for Sobeys.

‘Our customers have told us what matters most is better, fresh produce’– Scott Chollak of Sobeys

One local marketing expert predicts the new Sobeys initiative will force other grocery retailers to also revise their battle plans to protect their market share.

“It means that everybody now has to up their game and make sure they’re listening to their customers,’ Kelley Main, head of the University of Manitoba’s marketing department, said in an interview.

“It’s not necessarily about having the best prices on everything… and it doesn’t necessarily make sense for everyone to jump on the produce bandwagon,’ Main added. “I think they are going to respond in different ways — ways they have control over and ways they think will best resonate with the customers that are the most important to them.’

Walmart traditionally targets price-sensitive consumers and one-stop shoppers by offering “everyday low prices’ and a broad selection of goods under one roof.

That’s why its new supercentre that opened last Thursday in the Southdale Shopping Centre not only carries things such as home electronics, home decor and apparel, it also boasts a full line of groceries, a full-service pharmacy, a photo centre and a medical clinic.

Sobeys, on the other hand, tends to zero in on the grocery shopper. Main noted the new Sobeys Extra store that opened last Friday at 2850 Pembina Hwy. features things such as a broader selection of grocery items, lower prices on some fresh fruits and vegetables, better-quality meats and added support services — things such as a cheese ambassador and a well-being counsellor.

“So that’s a focus on services alongside products,’ she added.

She said it’s difficult to predict how other industry players will respond. Some may expand their product selection, and others may opt to lower their prices. But whatever they do, consumers should benefit, she added.

The new Sobeys initiative applies to all of its Sobeys and Safeway outlets in Western Canada, and includes an aggressive advertising campaign with newspaper, radio, television and digital ads featuring celebrity chef and better-food advocate Jamie Oliver.

Superstore, which gobbled up Shoppers Drug Marts in a $12.4-billion deal in 2013, appears to have transformed the drugstores into mini-groceterias, featuring their private-label Presidents Choice products. And No Frills, a franchised Superstore offshoot, has also opened a handful of stores in the city.

Keri Scobie, Sobeys’ manager of communications for Western Canada, said in an interview the retail grocery market in Western Canada remains highly competitive. 

And it promises to get even more competitive as Vancouver-based Save on Foods expands eastward with the opening of 40 new stores over the next three to five years in Manitoba and Saskatchewan. That includes three Winnipeg outlets scheduled to open this fall in the Northgate Shopping Centre on McPhillips Street, St. James Street and in the Bridgwater Forest townsite.

“So you’re always looking for ways to provide your customers with the things they want,’ Scobie added.

She said internal customer surveys have shown what Sobeys and Safeway customers most want are higher-quality meat and produce and lower everyday prices. So with that in mind, the retailer is now offering Sterling Silver AAA beef, which has been aged for 21 days, at all of its Sobeys and Safeway outlets in Western Canada. That includes the 23 Safeway and 18 Sobeys stores in Manitoba.

It’s also lowered prices for a variety of is produce items. For example, organic bananas that were $1.19 per pound are now 89 cents per pound. And cauliflower that was $4.99 a pound is now $3.99.

“You can never say that you can lock into that price,’ Scobie added, “but what we’re committed to is offering lower prices every day.’ 

Prof. Sylvain Charlebois, a food-policy expert with the University of Guelph, said the plunge in the value of the Canadian dollar has driven up the cost of imported fresh produce. That has prompted many shoppers to seek out more affordable alternatives, such as canned or frozen fruits and vegetables, which has taken a big bite out of sales of fresh items.

Charlebois believes reduced consumption, not increased competition, is what is prompting retailers to lower produce prices.

“I think they’re also just concerned that at some point Canadians will feel grocers are gouging consumers, (although) I don’t think that’s the case.’

He and Main also noted there are cellphone apps on the market that make it easier for consumers to comparison-shop for the best deals. That’s why more retailers are offering daily or weekly specials, Charlebois said.

“I think you’re going to see a marketplace that will increasingly become more ‘specials’-driven,’ he added.

murray.mcneill@freepress.mb.ca