Card Program Boosts Sobeys Results

JON SPRINGER

STELLARTON, Nova Scotia — Sobeys' new card program is drawing a full house.

The Club Sobeys loyalty card program, which launched in September, gained 1 million members in its first month and has continued to grow “well ahead of expectations,” according to Bill McEwan, president and chief executive officer, speaking in an earnings conference call earlier this month.

According to McEwan, Club Sobeys card users averaged higher transaction sizes and contributed to a 1% increase in the number of transactions at Sobeys stores during the fiscal second quarter, which ended Nov. 1.

As reported last week in SN, Sobeys sales for the quarter increased by 7% and same-store sales improved by 5.4%.

Shoppers in Club Sobeys accrue one point for every dollar spent at the store, with opportunities to earn bonus points through various in-store promotions. The program offers a variety of ways to collect rewards, ranging from in-store savings to items from an online catalog. Customers can also select to convert points for Aeroplan Miles, the air travel rewards program run by Air Canada and its related carriers.

Shoppers who use the Club Sobeys MasterCard can accrue points for all card purchases, and earn two Club Sobeys points for every dollar spent in Sobeys stores, McEwan said.

“Club Sobeys customer enrollments have far exceeded targeted levels, and customer responses have been very, very positive,” McEwan said. “The combination of strong sales and bonus point programs, the accumulated dollar purchases rewards, catalog and airplane redemption options, all behind a tremendous communication effort by our teams of store personnel, has already had a measurable impact on our sales, driven by significant increases in transaction sizes of the Club Sobeys members.”

In other subjects addressed in the conference call, McEwan said the company was “still learning” about its small-store format, known as Sobeys Urban Fresh, which it has opened in dense markets in Toronto and Vancouver in recent years. The stores are productive but present operating challenges the company is still addressing.

“We're really happy with the performance overall. Some stores perform better than others, but the sales-per-square-foot are delightful. The real challenge is that a lot of these buildings that we're going into, although in the right location from a consumer perspective, are tough to operate,” he said. “So we're learning as we go. We are making improvements, and we will seize every opportunity that makes sense to continue to grow that.”