Sobeys Expands Premium Label

JON SPRINGER

STELLARTON, Nova Scotia — Sobeys is revamping its private-label program behind more premium choices and fewer value items.

Bill McEwan, president and chief executive officer of Sobeys, said the changes — only some of which have been rolled out to stores — include refreshed packaging on its core Compliments range of national-brand equivalent items; an expansion of its premium Sensations label from 150 items to 1,000; and a new value tier, to be known as Signal, replacing the Compliments Value brand. Signal will include a range of 250 products, down from 1,000 Compliments Value items, McEwan said.

The core Compliments label includes about 2,600 products.

McEwan said the changes to the private labels at Sobeys would provide clearer definition between product tiers — and deliver them in accordance with consumer demand.

“We're elevating [Sensations] from 150 items to approximately 1,000 items because we've got strong research and evidence from the consumers that that's what they're looking for,” McEwan said. “We've eliminated the value tier of about 1,000 products and concentrated that at 250 product categories under a completely different label called Signal, so as to eliminate any confusion on the core selection tier from the value tier. We're very excited about that.”

McEwan described Sensations as “affordable indulgences” that can expand to high-velocity categories like refrigerated orange juice.

“The national brand in the refrigerated orange juice category is considered a very high-quality, premium brand,” he explained. “Our private-label product under the Compliments name tests with the consumer as good or better than that product. So this was a product in the mid-tier, and we've elevated it to the exceptional tier.”

McEwan made the announcements during a conference call discussing financial results for the fiscal first quarter, which ended Aug. 1. Empire Cos., Sobeys' parent company, reported net earnings of $83.2 million (U.S.) on sales of $3.7 billion. Sobeys accounted for nearly all of the revenue and operating income during the quarter. Its sales improved by 5.3% and same-store sales were up by 4%.

In July, Sobeys began operations at a new, fully automated dry grocery warehouse in Vaughn, Ontario. McEwan said the company was currently servicing approximately 30% of its Ontario stores through the facility now, but would be fully moved in mid-October.

Sobeys officials noted that inflation had tailed off considerably, with some categories showing deflation toward the end of the quarter.