Author: Varinder Singh

An important message for all British Columbia Safeway employees on the FreshCo announcement

Posted on by Varinder Singh

There has been a lot of news to digest in recent weeks. We want to ensure you have the most up-to-date information as we all work together to strengthen our Safeway stores and reconnect with our customers.

We’d like to address four important areas to help provide clarity around this news and other important issues to date:

  • Project Sunrise
  • Our continued commitment to full-service format stores
  • The strong case for expanding our Discount format in Western Canada
  • Set the record straight on the current status of bargaining and other issues

Project Sunrise

As you know, the grocery industry is extremely competitive and these effects are being felt across all banners, at all levels of the Company.

To address these challenges we launched Project Sunrise, a major transformation initiative to win back our customers and strengthen our stores. The first phase of Project Sunrise – reorganizing our office teams to operate as one national, functionally-led organization – is now complete. Through this process we have created a simpler office structure to operate more efficiently and better serve our stores and customers.

The second phase of Project Sunrise, to unlock our scale, is well underway. As part of this phase, we announced our significant plan to expand our Discount banner, FreshCo, into Western Canada.

Our continued commitment to full-service format stores

We have no intention to remove our full-service format. We remain committed to our full-service stores — they are the backbone of our business. In fact, even through the Discount roll-out in Western provinces, the vast majority of our stores in Western Canada will continue to operate as full-service format stores.

Unfortunately, many of our full-service stores are not competitive at this time. We need to implement changes in our full-service offering to be in a better position to serve our customers’ needs. We need to get our costs down and increase our flexibility to compete.

Our customers’ tastes are changing and we need to change with them to remain competitive. Customers are telling us that they want options through our conventional full-service stores and a Discount offering. This is the best way to grow our overall business and win back our customers.

Through the first phase of Project Sunrise, we have structured our office teams to ensure that support for full-service retail operations is strong and not distracted by our Discount roll-out in Western Canada. A dedicated team will be responsible for managing the Discount roll-out.

The strong case for expanding our Discount format in Western Canada

The expansion of FreshCo in Western Canada comes as a direct result of customer demand. We’ve conducted detailed customer and market studies and found that there is strong opportunity for Discount in Western Canada.

Today, Discount grocery is the fastest growing bricks and mortar segment of the grocery market.

Eighty-seven per cent of Sobeys Inc. stores across the country operate in a conventional grocery format, whereas Discount stores, like FreshCo, now make up nearly 44 per cent of the Canadian food retail market.

In short, customers are shifting heavily to Discount grocery shopping. In order to keep our stores open and provide good, stable jobs for our employees, we must be in a position to meet this clear customer demand.

Our goal is to build more stable stores, stores that create good jobs and opportunities for our people.

Update on the status of bargaining and other issues

Change of this magnitude is not easy on our team and we know you have questions. We want to ensure you to have the all facts to make clear decisions. Recently, there has been misinformation circulating about Company announcements and the status of bargaining.

In the interest of being clear and transparent, here are the details of the Company’s position:

  • The Company has tried on a number of occasions to engage the Union by asking UFCW 1518 to set bargaining dates for the reopener negotiations. The Union has not agreed to do so, arguing they will not agree to dates until they receive extensive financial information. Our position has been clear: the Company will provide and discuss relevant financial information when the parties meet to negotiate. As a result of this impasse, the Company has had to take the unprecedented step of going to British Columbia’s Labour Relations Board for assistance in setting dates for bargaining.
  • For almost six months, the Company has tried to engage with the Union in the Quarterly Review process to discuss the status of 19 underperforming stores in B.C. Unfortunately, these attempts have been unsuccessful as the union would not engage in the process. The Quarterly Review process is set out in the Collective Agreement, and the Union has not recognized this responsibility. As part of the Quarterly Review process, the Union would have received financial disclosure on the 19 stores in question months ago.
  • It has been well known in the industry that the Company was contemplating expanding our Discount format. In the UFCW’s own letter to the membership, it noted that Michael Medline, President and CEO, Empire Inc., stated publicly months ago that the FreshCo expansion was being considered. Despite this, the Union has indicated that it was “blindsided” by news of the FreshCo expansion.
  • Over the course of the last year, the Company has met with UFCW 1518 leadership on an ongoing basis, having many frank discussions about the state of the Company and possibilities for the future, including the possible expansion of a Discount banner like FreshCo. As a result, this latest announcement should come as no surprise to UFCW 1518.
  • The Company was not in a position to provide UFCW 1518 with firm details on the FreshCo expansion decision until the decision was reported publicly. The FreshCo expansion is a material announcement and we are a public company. As such, securities regulations would not allow us to discuss this internally without informing the market first. The Union is aware of this rule. It is our goal to be as transparent as possible with UFCW 1518 and you, our employees.

Working together for a successful future

We all share a vested interest in growing our business together. We are striving to return to profitability – profitability that will serve both the Company and our employees’ best interests.

We need to work together to build a stronger Safeway.

Over the past year, the Company has made tough decisions and changes to focus on winning back our customers and strengthening our stores. We need to move quickly to respond to customer demands in order to be successful. An important part of this process is having the necessary conversations with employees and unions to discuss moving forward with these plans.

The only way to move forward together is to get to the bargaining table and start the important work of building a stronger future together.

If you have any further questions about this information, we encourage you to submit them on safewaytalks.ca. We are committed to continue communicating with you as more information is made available and will connect again soon.

Why don’t we have more in-store sampling of our products?

Posted on by Varinder Singh

We strongly believe that sampling is a great way to build better connections with our customers and to engage them with our products.

Our office merchandising teams work with vendors continuously for new product innovation, flavour profile changes and seasonal items. We also work with local regional vendors, especially when their products are in season and available for sale. We regularly have sampling stations set up in-store by our store managers. As well, we encourage employees to provide customers with a sample any time there is a request or opportunity to do so.  There is a sampling policy in place that all employees should be familiar with in order to help customers select their favorite products.

If you have any further questions on in-store sampling, please feel free to speak to your Store Manager directly.

Why aren’t Safeway stores open the same amount of hours as Sobeys stores? Aren’t they owned by the same company?

Posted on by Varinder Singh

Store hours are set individually for a number of reasons aside from the banner. Some of these factors are the needs of the community or neighbourhood, local bylaws, customer traffic and sales, so not all stores will have the same set of open hours. Creating a balance between customers’ needs and operating costs helps us to improve sales and our bottom line, helping us return to our spot as one of Western Canada’s leading grocery stores.

We often hear from customers they are not interested in buying multiple products to receive a reduced price — they say they don’t need two of the item. What kind of alternative discounts are we offering customers to ensure they’re able to receive discount prices?

Posted on by Varinder Singh

We offer our customers a variety of ways to save each time they shop with us so they can find a program that works best for their budget and lifestyle. Some of our programs include:

  • Savings through our weekly flyers;
  • Savings through our AIR MILES program (including Blue Friday);
  • Savings through our Everyday Value program that offers even more value on certain key products that customers purchase on a regular basis; and,
  • Savings through regular promotions such as Customer Appreciation Day and Dollar Days.

In addition to these programs, our Buy More Save More program provides a discount on a single item plus a further discount when more of the same products are purchased beyond a certain threshold.

All of these programs provide an excellent opportunity for employees to share price savings with their customers. We continue to listen and diversify our offerings to customers from the food on our shelves, to the way we help our customers save.

Safeway Talks Summer Contest wraps up with six winners

Posted on by Varinder Singh

With the Safeway Talks Summer Contest finished, we’ve got great news for six lucky Safeway employees who entered to win by signing up for regular updates from Safeway Talks.

The winners are:

Grand prize ($1,500 gift card):
Janna Zielinski, Fort Saskatchewan, Alberta

Runners-up ($1,000 gift card):
Dixie Hallatt, Leduc, Alberta
Kaylee McLeod, West Vancouver, B.C.

Third place ($500 gift card):
Graham Clifton, Swift Current, Saskatchewan
Gail Lalonde, Abbotsford, B.C.
Helga Jensen, Camrose, Alberta

Please join us in congratulating our winners!

Keep checking in with us at Safeway Talks for news and updates, and stay tuned for future contests.

We’d like to thank everyone for joining the conversation and taking part in the contest. We encourage you to continue sharing Safeway Talks with your coworkers and keep communicating with us on Safeway Talks.

Your input is important to us, and we want to hear from you as we work together to build a stronger future for Safeway.

Alberta Court bans loyalty rewards on prescription purchases

Posted on by Varinder Singh

On September 22, Alberta’s Court of Appeal released its decision on pharmacies’ ability to issue loyalty rewards to customers purchasing their prescriptions, banning all pharmacies throughout the province from offering a rewards programs, overturning the previous ruling by the Alberta Court of Queen’s Bench. Sobeys Inc. initially applied for judicial review of the proposed incentive ban by the Alberta College of Pharmacist in 2014, and the matter has been before the courts.

This is a ruling that affects all banners across Alberta, and, as it’s our goal to provide the best value and experience for our shoppers, we are obviously disappointed with the outcome.

“In addition to the professional services and trusted advice provided by Safeway, Sobeys and IGA pharmacists, we believe that we contribute to better patient care by offering rewards that help increase loyalty, adherence and ultimately improved health outcomes. While this ruling has now taken away loyalty rewards from all Albertans, our pharmacists will continue to offer trusted professional advice and the best possible care to our patients,” said Jedd Wood, Vice President and General Manager of Sobeys National Pharmacy Group.

We encourage all our Safeway employees to continue their work in building stronger connections with customers and providing great service in store. As this decision comes into effect immediately, please inform customers with questions that:

  • The ruling is province-wide, affecting all pharmacies
  • AIR MILES can still be earned on groceries, health and beauty products and all non-prescription medications
  • We still have a team of world-class pharmacists providing the same great level of service, advice and care as they always have

Our goal continues to be regaining our place as one of Western Canada’s leading grocery stores — a place that can provide good, stable jobs for thousands. And we’ll do this by ensuring our stores are simply best place for our customers to shop.

Financial Update For Employees

Posted on by Varinder Singh

Safeway employees,

Last week, our CEO Michael Medline announced this year’s first quarter financial results for Empire Company Limited, the company that owns Sobeys and Safeway.

While the results are positive, there is much more work that we need to do. The grocery industry is tough, competition is growing and we aren’t even close to where we need to be in the Safeway brand if we are to be successful.

On the business side, we’re focused on Project Sunrise. This is about cutting costs and realigning our business so we can put ourselves in a leadership position once again. To put it simply, this is about making sure our back-stage structures and staff are better organized and equipped to support our stores, making it simpler for us to do business and easier for you to do your jobs. We still have a long way to go and we know change isn’t easy, but we will see it through.

For Safeway, this means we must continue to tackle our challenges. Even with the changes we’re making through Project Sunrise, we still face some of the highest costs in the industry. This must change!

We want Safeway to regain its place as one of the top grocery stores in Western Canada. We want customers to think of Safeway first when they choose where to shop. In order to do this, we must get our costs under control.

Project Sunrise is one piece of this puzzle, as we continue working at store level to improve our bottom line, all with the goal of building a successful Safeway with good stable jobs for the future.

Thanks for your hard work and dedication. Only by working together can we make Safeway a leader again.

 

Jason Potter

Executive Vice President, Operations

Update on B.C. Quarterly Review Process

Posted on by Varinder Singh

Safeway’s on your side

As the backbone of our operations in British Columbia we wanted to update you on the status of our quarterly review process.

We believe the UFCW locals have a right to their views. But here is how we see it, as people dedicated to the future of this company.

To ensure a strong, viable company that can continue to provide thousands of stable jobs, we need to be competitive. That means we need to be the place our customers want to shop at, at a level of cost that allows us to operate.

And that’s why we’re looking at all our costs, at every level and in every detail of the company.

Wisely, our collective agreement provides for exactly this kind of review, when it is needed to keep this company operating. Delay will just make change more difficult and costly for everyone. We must tackle our challenges and we must do it now.

Here is what is happening:

Safeway is a proud Western Canadian brand, and we are proud of our employees

  • Sobeys has operated for more than 110 years in the grocery business with many of our stores in western Canada including British Columbia
  • We are in our stores every day, we know our markets and our customers and we continue to listen, learn and act

Yes, we have made some mistakes but we are taking action, including:

  • Investments in lower prices to better compete;
  • Work to update our product offerings to better reflect customer needs;
  • Updates to our Planograms and have better communication about stock to stores;
  • Continue to invest in remodels and renovations to attract more customers

Our operating and specifically our labour costs are a serious issue, and they’re putting stores at risk.

  • Safeway is not immune to the economic realities we are all facing in the West
  • We are facing tough competition especially from discounters and big-box stores that are driven by price and low costs
  • We are taking actions to lower costs across our operations, including reducing our back office costs by over $500 million, but we must tackle our labour costs in our stores and we must do it now

We have to act quickly and work together to build a strong Safeway if we are to continue to provide good, sustainable jobs in the future.

  • We all want to return Safeway to its place as one of the best grocery stores in Western Canada and we are all working hard to make this happen
  • We ask you to urge the union to work with us to tackle these challenges
  • Only by working together can we build a strong future for everyone who works here

SPEAK UP. MAKE SAFEWAY STRONG AND STABLE

There aren’t enough employees in-store to adequately serve our customers. Customers are noticing we’re short staffed. Are there any changes that can be made or plans to ensure we have enough staff in store so our customers get superior service?

Posted on by Varinder Singh

Staffing stores to serve our customers is one of the most important jobs we have. We know our employees are critical to ensuring customers leave our stores satisfied and stay loyal to the Safeway brand. To make sure we get that right balance we work with our Department Managers, Store Managers and Directors of Operations. In addition, we also rely on technology.

We use a sophisticated tool called “Workforce Management” (WFM) to connect the right number of employees to the tasks that require their skills at the right time to meet our customers’ needs.

It is our goal to balance the right level of staff to provide the customer service we expect while managing our labour costs. Even though we have the tools to help us manage our workforce, the reality is that scheduling is tied to the financials of our stores. We face a competitive market – with constant pressures on costs. And our labour costs are still too high for industry standards. We must address our labour costs and sales performance to improve our viability. We have to be the best place to shop, again.

If we do not address these challenges, we will not be able to make our stores profitable.

How is Safeway competing in the area of online shopping and home delivery?

Posted on by Varinder Singh

The grocery and shopping landscape is changing quickly and we are working to ensure we keep up with the demands of our customers.

We currently offer online shopping services at some of our stores and banners, and we are looking to expand to other banners. It is our priority to get Safeway back to being one of the top grocers in Western Canada. To do this, we will have to continue to look at where the industry is going and what our customers want. While online shopping in the grocery industry is getting some attention, it is interesting to note that with the acquisition of Whole Foods, even Amazon understands that they need bricks and mortar to sell groceries.

We have no timelines at this point, but are looking forward to how we can make online shopping a more expansive part of our business at Safeway to better serve our customers.