Sobeys Launches FreshCo. Format

AMY SUNG

MISSISSAUGA, Ontario — Sobeys has launched a new discount format with the opening of eight FreshCo. discount stores here and in Brampton, Ontario. The stores cater to the varying multicultural demographics of the communities they serve and offer fresh products at discounted prices.

“We took the opportunity to step back,” said Bill McEwan, president and chief executive officer of Sobeys. “And rather than to continue to modify our Price Chopper discount concept ‘as is’ incrementally, to step back and say: ‘based on the significant changes in the multicultural complexity of the marketplace and the competitive characteristics of the Ontario marketplace, what should we be doing to be more relevant, more contemporary, more in line with customers expectations today?’”

“We asked ourselves, what if low prices meant fewer compromises, because what we hear constantly from our customers is that they love the low prices … but they would like to have less compromises associated with achieving those low prices.”

McEwan added that Ontario has the highest concentration of discounting in Canada, and that over the past 20-25 years that the discount model has been in place in Ontario, it has grown to account for about 40% of the marketplace.

The new FreshCo. format offers seasonal and local fruits and vegetables, AAA meats, locally produced products and customized multicultural assortments for individual stores. There are also multicultural offerings within produce, meat, dairy and bakery, Rob Adams, general manager for FreshCo., told SN.

“We've taken a lot of care to make sure we can provide a complete shop for all of our customers in the community, so every department, we've thought through how we could cater,” Adams said, explaining that in produce, a table row of multicultural items will be different by store and will be targeted to the community. In the fresh meat department, 4 to 8 feet are dedicated specifically to halal products. And a dairy set is dedicated to the multicultural demographic of the store, in addition to a selection of local Ontario cheeses.

“In bakery, I think the first that I've seen in my experience in the ordinary discount world, we've teamed up with some local bakeries in Mississauga and Brampton and brought in some South Asian sweet goods and breads into the stores that we're going to get delivered daily. So that's something new that our customers will see. And as you continue to walk through the stores, it's pretty much every corner that you take, you're going to find some multicultural items.”

In addition to multicultural offerings in the fresh departments, each FreshCo. location also offers an international assortment of specialty grocery products tailored to the local community that the store serves. There is also a selection of special dietary and health-conscious items such as gluten-free and lactose-free products, which are not traditionally associated with discount food retailers.

Sobeys intends to convert dozens of its existing Price Chopper discount stores to the new FreshCo. banner in the coming months and years, McEwan said. But, he added, not all Price Choppers will be converted, because in some cases that format serves a specific area better. The retailer will also be looking at opportunities to build new stores and acquire new sites for its various banners.

“We are very proud of our Foodland stores in the rural communities of Ontario and very proud of our full-service Sobeys stores and will continue to build each one of them in balance,” McEwan said. “That's one of the strengths of our strategy.”