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Back in 2017, Empire Company Ltd. announced its optimization plans to boost performance and get a firm grip on the market. The plans include rebranding Sobeys Inc. underperforming Safeway stores to FreshCo and offering discount shopping in Alberta’s top mixed-use spaces.
While the COVID-19 pandemic has slowed down Empire's expansion plans, the company is getting back on track with aims to finish the Safeway rebranding process in Alberta by fall 2021.
Six Safeway Stores Rebranded
According to the Empire’s Project Horizon, about a quarter of Safeway locations in western Canada will be converted to FreshCo over the coming years. Both Safeway and FreshCo belong to the Sobeys Inc. network, the second-largest food retailer in Canada.
To date, 37 FreshCo locations have been confirmed in western Canada, with a gross square footage of over 1.4 million. British Columbia, Manitoba, and Saskatchewan currently have 22 new FreshCo locations. A new store in Ontario has just been announced, and a rebranding of six Safeway stores in Alberta will begin by spring.
The new FreshCo locations in Alberta include:
Although the stores will be closed for several months during the rebranding process, any pharmacy within the location will remain open. The investment will not only involve remodeling and rebranding. Empire is planning to streamline and optimize all store processes, essential technology, communication, and employee training.
It is expected that the store closure costs will reach $11.7 million, an expense which will be covered by the earnings in the third quarter of 2021.
According to Empire, Alberta and western Canada as a whole are seriously lacking in the discount shopping market, even though it is the fastest-growing segment in food retail, accountable for over 44% of the market.
Seeing as Safeway has been underperforming in western Canada, the shift to the discount FreshCo locations is expected to turn a profit in record time.
Established in 2010, FreshCo is a chain of deep discount supermarkets that offers price matching, double-fresh guarantees, and an in-stock guarantee with rain checks for 10% off.
The new stores are expected to increase foot traffic by attracting Alberta residents through low prices and better customer service.
Changes in Canada’s retail CRE market always offer exciting new opportunities for CRE investors. Renovation of six Safeway stores in Alberta is set to begin in early spring. The Safeway rebranding to FreshCo is expected to attract audiences and increase spending, setting a positive trend in the midst of the pandemic.