Sobeys is buying Safeway

[Shwa Girl]

Sobey’s is buying Safeway

“In addition to the grocery stores, Sobeys will add 199 in-store pharmacies, 62 gas stations, 10 liquor stores, four distribution centres and 12 manufacturing facilities. Safeway is predominantly a Western chain, with 60 per cent of its properties in Vancouver, Calgary, Edmonton and Winnipeg.”

http://www.theglobeandmail.com/repor...ticle12499648/

[Chantel]

Really, safeway has a few benefits like the gas bonus and the like, but I won't be super torn up if it goes in favor of Sobeys or something. I'm sure Sobeys is better in every aspect, especially price. Safeway is highway robbery.

The customer service is garbage and the management is too. Good riddance!

[marstec]

Interesting that Safeway is selling its Canadian interest...I think they are an American company.

[Shwa Girl]

Interesting that Safeway is selling its Canadian interest...I think they are an American company.

Hoping this means that all the SCs in the west will get the same Sobey's deals and incentives as we do in the east.

[redhdlois]

Not quite sure where to post this......pls move if it's in the wrong section.

Empire Co. to buy Safeway Canada

TORONTO - Supermarket chain Sobeys Inc. says its $5.8-billion acquisition of Safeway's Canadian assets will give it a foothold in sought-after retail markets in Western Canada.

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The corporate logo of Sobey's is shown. THE CANADIAN PRESS/HO


TORONTO - Supermarket chain Sobeys Inc. says its $5.8-billion acquisition of Safeway's Canadian assets will give it a foothold in sought-after retail markets in Western Canada.
"After the acquisition, Sobeys will be a leading grocer in Western Canada and the largest grocer in Alberta, an attractive, high-growth market," president and chief executive Paul Sobey said Wednesday.
"This acquisition represents a unique and highly strategic opportunity for Sobeys to leverage its existing asset base, effectively creating a new platform for growth."
Empire Co. Ltd. (TSX:EMP.A), the Nova Scotia-based parent of the Sobeys chain, said the cash deal will give it $1.8 billion of real estate.
The transaction to buy Canada Safeway Ltd., which has 213 stores, will be completed through Empire's wholly-owned Sobeys Inc. subsidiary. Included in the transaction are 199 in-store pharmacies and 62 gas stations on the Safeway properties.
Empire Co. will also own 10 liquor stores, four distribution centres and 12 manufacturing facilities as part of the deal.
Empire said it expects to find cost synergies of about $200 million over three years by integrating the distribution, information technology and procurement divisions of both grocers.
The company also said it will cut its administrative and marketing costs by combining management teams, but would not comment on whether layoffs are expected.
"We have a need for great, talented people," said Sobey. "There's a great cultural fit in regards to the employee basis between the two organizations."
Marc Poulin, president and chief executive of Sobeys Inc., said the company is not sure whether it will be re-branding the Safeway stores.
"It's too early to tell, obviously, at this stage," said Poulin.
"We just completed the acquisition. We will do proper marketing and research to determine what will be the course on the bannering side."
Sobeys owns or franchises more than 1,300 stores across Canada under several banners that include Sobeys, IGA, Foodland, FreshCo, and Thrifty Foods.
The company noted the acquisition positions it to compete more effectively within the changing and increasingly competitive grocery retail landscape in Canada.
In addition to traditional rivals like Loblaw (TSX:L) and Metro Inc.(TSX:MRU), major U.S. retail players like Walmart (NYSE:WMT) and Target (NYSE:TGT) have been making inroads in Canada with a broad selection of food items in their stores.
Safeway Inc. chief executive Robert Edwards told analysts in a conference call that the offer to buy its Canadian operations came directly from Empire Co.
"An auction process was not run and this was an unsolicited offer," he said.
"We believe that this transaction maximized the value of our Canadian assets."
In its last financial year, Safeway delivered $6.7 billion in sales. The California-based company has some 1,400 stories in the U.S.
Safeway said the proceeds from the sale will go to paying down debt and buying back stock, and may also be used to invest in "growth opportunities."
However, an analyst at Gimme Credit labelled the transaction credit neutral for Safeway, noting the store's Canadian operations have earnings margins nearly twice as high as the overall company.
About 60 per cent of the properties are in Vancouver, Calgary, Edmonton and Winnipeg.
Empire's spun out Crombie real estate investment trust will have the first opportunity to buy any of the $1 billion in real estate assets the company plans to sell.
Empire expects the transaction to close in the fourth-quarter and immediately add to adjusted net earnings per share.
Stock in Empire, which made the announcement after markets closed, was down 97 cents, or 1.41 per cent, at $67.61 Wednesday on the Toronto Stock Exchange.

[Shwa Girl]

I beat you to it.

http://forum.smartcanucks.ca/357561-...afeway-canada/

[cheekysaver]

Wow that is big news! LOL I have so many questions for them... what will it mean for the airmiles program being the first and biggest.... second will it mean they will have the same coupon policy? If not what changes?... Thanks so much the heads up!

[Shwa Girl]

Really, safeway has a few benefits like the gas bonus and the like, but I won't be super torn up if it goes in favor of Sobeys or something. I'm sure Sobeys is better in every aspect, especially price. Safeway is highway robbery.

The customer service is garbage and the management is too. Good riddance!

Sometimes Sobey's has high prices too.
Customer service? I have been pretty happy with the Durham Region and Oshawa stores

[Shwa Girl]

For SCs out west, Sobeys has Club Sobeys points that can be used for groceries.

Or, you can convert to Esso Extra points or Aeroplan miles.
https://www.clubsobeys.com/Rewards.aspx

[Shwa Girl]

About Club Sobey's points for groceries

[FallenPixels]

I think Sobeys out East uses Airmiles too though?

[marstec]

I wonder what will happen to the union? As far as I know, Sobey's isn't unionized.

[Natalka]

I love Sobey's - yes, some prices are expensive, but when they have a sale, it's a great sale. It's been an awesome place to buy cheap and good veggies over the winter, I've been so happy with that! Their bakery bread and buns are awesome, so is the deli.

However, Safeway wins for customer service - it's absolutely fantabulous - and for a nicer shopping experience in terms of how you 'feel' when shopping - stores are immaculately clean, wide aisles, I like shopping there. However, I barely ever do anymore - prices are just way too high, and their sales are rarely good in comparison to other places. Maybe we go once every two weeks...

[Natalka]

I wonder what will happen to the union? As far as I know, Sobey's isn't unionized.

Both Safeway and Sobey's are unionized, through UFCW.

[marstec]

Both Safeway and Sobey's are unionized, through UFCW.

Thanks for the info, Natalka. That's news to me about Sobey's being unionized, they weren't for a long time.