Business

Sobeys to buy up Safeway grocery stores

A typical Sobeys grocery store. The chain is based in Nova Scotia but is buying Canada Safeway
A typical Sobeys grocery store. The chain is based in Nova Scotia but is buying Canada Safeway's outlets, mainly in Western Canada.
— image credit: Contributed

Canada Safeway stores in B.C. have a new owner.

Nova Scotia-based supermarket firm Sobeys, itself owned by Empire Company, is buying the Safeway chain's 213 Canadian stores for $5.8 billion.

The deal with Safeway Inc. also includes numerous in-store pharmacies, gas stations, liquor stores and other distribution or manufacturing facilities across western Canada.

Sobeys hasn't yet decided if it will keep the Safeway name or reflag the stores under one of its brands.

Sobeys already has a presence in B.C. through its IGA and Thrifty Foods brands.

Adding Safeway's 75 B.C. stores will give Sobeys 107 outlets in this province. That compares to 101 for Overwaitea Food Group, 84 for Loblaws, 25 Walmarts and 14 Costcos.

The change of ownership may also mean changing product lines for customers who continue to frequent the stores, as well as possibly different loyalty card systems.

Both Sobeys and Safeway offer Air Miles reward points but the new operators indicated they will move to eliminate separate loyalty programs.

Big supermarket chains face growing competition as other retailers add groceries to their shelves.

"This is a significant and historic event for Sobeys, which has been proudly serving Canadian food shoppers for 106 years," Empire president Paul Sobey said.

He called the acquisition an "excellent strategic fit" that strengthens the chain presence in Western Canada, and leverages its existing assets to better compete.

Empire officials intend to sell off Safeway stores' real estate holdings and lease the properties back.

The planned purchase is subject to Competition Bureau approval.

Not everyone's likes the deal.

Some shoppers posting on Canada Safeway's Facebook page were critical of Sobeys, while others on Twitter doubt the takeout of a major grocery player will benefit consumers.

"Get ready for higher prices and less competition," tweeted Vancouver's Pete Quily.

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