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Teammates,

Today, we are meeting with UFCW 401 to continue collective bargaining.

At the bargaining table, we are sharing information about the store network in Alberta that helps explain the challenges we are facing. It’s important to me that we continue to be transparent with you.

There are approximately 50 stores within the Safeway Alberta network that are struggling. The balance of our Safeway stores are holding their own, although they have some challenges.

Of these struggling stores, 20 are in the wrong markets. We know customers are looking for discount shopping options and we cannot meet their needs with full-service stores. We are considering converting these 20 Safeway stores to FreshCo. These conversions would allow us to better compete and provide more viable jobs for employees.

Converting some of our Safeway stores to FreshCo stores does not solve all of the challenges we are facing in Alberta. We have a solid plan to win at Safeway. We are investing in marketing and merchandising. We also have a significant amount of capital allocated to bring this plan to life.

It’s our current intention to invest $200 million in the Safeway network over the next five years. The challenge is we cannot accomplish these plans if we do not have the right collective agreement in place to provide stability for our business. We need stability through a number of factors to invest the money. The FreshCo expansion plans are not included in the $200 million investment.

I’ve been on the Safeway team for 43 years and I’m committed to winning with you. You have my commitment that my leadership team and I will do everything we can to work with you now and through any changes, so we can win together. We will continue to be transparent with you.

We take collective bargaining seriously and want to move the conversation forward. If we can work together to lay the proper foundation for the Company’s future, including the introduction of FreshCo into Alberta, we are confident that we can win together.

Thank you for your continued hard work and commitment to Safeway and our customers.

 

Scott Chollak

VP, Operations, Alberta

We continue to be dedicated to keeping you informed with relevant updates directly from the bargaining table. Last week, we shared that progress with UFCW 401 has been slow and we haven’t achieved the momentum that we’ve been hoping for. The Union has been distracted from proposals that impact you and your teammates. Instead of working collaboratively to come to a fair agreement, the Union continues to slow the process down and focus on pulling us apart.

After bargaining had concluded last week, we received an unfair labour practice complaint brought on by UFCW 401. The unfair labour practice complaint alleges that the Company has engaged in activity that involves prohibited conduct under the Alberta Labour Code. The Union expressed particular concerns with:

1. The closure of Southland Crossing Safeway
2. The introduction of FreshCo & associated disclosure of Alberta Safeway store financials, profitability and sales

We were open and honest, both with the Union and our teams, on the Southland Crossing Safeway closure. Store closures are never easy decisions to make. We frequently review our real estate assets and the decision to close this store was in line with our normal course of business. Various factors were carefully considered and unfortunately, despite the hardworking efforts of the store team, the store had been unprofitable for a number of years, sales were stagnant and not expected to improve, and the store’s lease was up for renewal. The decision to close this store was not made until the week of May 6, 2019, and had no relation to ongoing bargaining. As always, we are so grateful for the dedicated service of the Southland Crossing team and will continue to work closely with impacted employees, and their respective unions, to ensure all collective agreement terms are met.

We have always been eager to discuss store financials with Union leadership in an attempt to advance bargaining. We want the Union to fully understand the reality of the financial state of many of our underperforming Safeway stores. UFCW 401 has refused to sign a non-disclosure agreement that is necessary to protect confidential competitive information. We are prepared to provide Union leadership with financial information to further demonstrate why it is necessary that we introduce FreshCo in Alberta. As the Company pointed out in response to the Union complaint, detailed evaluations and final decisions on which stores will be converted have not yet been finalized, however, the candidates for conversion all fit the same profile: they are currently unprofitable, their sales are flat or declining, they are in neighbourhoods where market research indicates that the majority of consumers are cost conscious, and they are in otherwise solid grocery retail locations.

We’ve approached every bargaining session with clear goals and objectives and a commitment to coming to a fair agreement that balances everyone’s needs and interests. UFCW 401’s unfair labour practice complaint is without merit and will only stall our progress towards securing new collective agreements. We have respectfully requested that the Union’s unfair labour practice complaint be dismissed.

Now more than ever, we have to stick together and stay true to our Safeway values. Our bargaining committee will continue to come to the table prepared to advance negotiations. Thank you, again, for your continued patience, hard work, and commitment to Safeway.

Click here to read the Company’s full response to UFCW 401’s complaints.

As we continue our commitment to building a solid foundation for the future of Safeway, we’re excited to not only invest in our stores, but to do a little good for the environment while we’re at it.

Safeway stores across Alberta are participating in Sobeys’ Energy Efficiency project, a company-wide initiative to reduce energy consumption in our store network, while enhancing the shopping experience for our customers. We know that the largest energy drivers in our stores are lighting and refrigeration, together consuming 80% of our total energy output. With variations in types of lighting and brightness in stores across the country, we saw an opportunity for improvement and are excited to be taking action!

Executed in waves, 68 Alberta Safeway stores are first in line to have all incandescent bulbs and fixtures upgraded to LEDs.

New LED lighting will cover the following areas:

• Production area
• Sales floor
• Vestibule
• Back of house
• Offices
• Washrooms
• Exit signs

The new lighting will help make our stores a more comfortable work environment, while better showcasing the outstanding products we have on display. While the project’s first wave will focus on interior fixtures, exterior retrofitting is scheduled for the near future.

Stay up to date on Safeway Talks for exciting updates as we roll out our Energy Efficiency project and share more ways on how we’re committing to sustainability in our stores.

Another week of bargaining between UFCW 401 and your bargaining committee has passed. Unfortunately, we didn’t achieve the momentum that we were hoping for, and importantly, that you deserve. We know that you’re wondering why the process is taking so long. You may be frustrated – and frankly, we are too. We’ve approached every bargaining session with a clear set of goals and objectives, and a commitment to coming to a fair agreement that balances everyone’s needs and interests.

Our goals: Investing in the future of Safeway & Introducing FreshCo to the Alberta market

Yet time and time again, the Union has been distracted from proposals that impact your lives and the lives of your teammates. After six weeks of bargaining, we’ve only discussed approximately 25 of 150 total proposals – none of which focus on scheduling, wages, vacation, or operational improvements. We know that these things matter and we need the Union to prioritize them, too.

In an attempt to gain momentum and streamline bargaining, we proposed a work plan during this week’s bargaining. The goal of the work plan is to better focus our discussions in a structured, scheduled manner, to help us reach a fair agreement more efficiently. Sadly, the Union showed minimal interest in our plan and simply reiterated that bargaining will just take as long as it takes.

We have always been open and honest, both with our employees and the Union, on why we have to introduce FreshCo in the right Alberta markets. Last month, we made a point of providing the Union with extensive data on FreshCo and the Alberta discount market in an effort to jumpstart these important conversations. We know that our customers and our communities are changing. We’re seeing more value-savvy shoppers who are focused on getting the best items at the most affordable prices. We aren’t attracting the same customers at Safeway that we will be at FreshCo. By not offering a Discount grocery retail banner, we’re significantly limiting our market share in Alberta. The fact is that we just can’t keep going with the way things are now. We can’t offer customers FreshCo pricing while supporting the Safeway full-service business model – nor do we want to. We want Safeway to stay Safeway, and FreshCo to be FreshCo. We’re committed to investing in Safeway, but no matter how hard we work, some of our Safeway stores can’t compete strictly based on the communities they’re operating in. We need to make a change now to avoid permanently closing underperforming Safeway stores in the future.

We have to stick together. Progress at the table has been slow, but we want you to know that we’re as dedicated as ever. The Company’s bargaining committee will continue to come to the table prepared to advance negotiations. Again, we’re incredibly thankful for your commitment and patience throughout this process.

We look forward to sharing more progress with you soon on Safeway Talks.

On Saturday, June 22, Safeway stores across Alberta joined forces to proudly host our 2019 Summer Food Fairs, Summer’s On.

Our Safeway teams put their best foot forward to celebrate the beginning of the season, creating a one-of-a-kind shopping atmosphere full of fun and enthusiasm for our customers. Excited customers enjoyed some our favourite seasonal products and tried a few fun new Compliments items. ​In addition to our own loved Private Label items, local suppliers were on-site to showcase many of their new products fit for summer family fun. And not only that, but our Starbucks teammates joined in on the excitement to sample four new products of their own.

Many stores also welcomed Special Olympics athletes to help kick off our national Special Olympics Check stand Campaign, running in stores across the country from June 20 – July 3. Stay tuned to Safeway Talks in the coming days as we share the campaign’s results!

Congratulations to our store teams for truly bringing the 2019 Summer Food Fairs to life! You delivered on customer service while showcasing some of our very best products – and you had some fun while you were at it! We loved seeing your expertise, passion and awesome displays on our Safeway Facebook group, Safeway Team: Connecting Our Stores, Our People, Our Communities. Great work, team!

Take a look at just a few of the exciting in-store celebrations below:

 

Safeway Lake Bonavista – Calgary

Safeway The Grange – Edmonton

Safeway Spruce Grove – Spruce Grove

Safeway Riverbend Square – Edmonton

Team,

First, I want to thank you all for your warm welcome. I’m eager to continue my transition with the Alberta team and begin working more closely with you. I’m also thrilled to reconnect with so many that I’ve worked with over the past several decades and I look forward to getting to know those who I haven’t met yet.

That said, I want to share an update with you following the release of Empire Company Ltd.’s Q4 and full year results that were distributed on June 27. Overall, the Company is reporting strong progress with improved sales and earnings, which is positive growth compared to our results from just two years ago.

As part of Project Sunrise, the Company has implemented many significant changes across our store, office and distribution centre networks. Most notably, Project Sunrise included the significant reduction of back office employees by 800 since 2017, as well as various cost savings initiatives, such as Category Resets. Although many of these changes have been difficult for teams across the business, they have been necessary. These changes have helped in better positioning the business for profitable and competitive long term success.

While the results reported nationally were strong, there’s still a lot of important work ahead of us here in Alberta. The grocery industry continues to evolve and become more competitive, and our Alberta Safeway customers have more shopping choices than ever before. Many of our stores continue to be unprofitable despite the best efforts of our hardworking teams. Through the year ahead, we plan to significantly invest in our Alberta store network with exciting refreshed in-store designs, new investments in the Safeway brand, and of course, by containing to proudly serve the communities where we work and live.

We’ll continue to share updates with you as this exciting work progresses. As always, thank you for your continued hard work and focus on providing industry-leading store standards and exceptional customer service. Together, we are a family nurturing families.

 

Scott Chollak

Vice President Operations, Alberta

We couldn’t be more proud to share the exciting news! The 2019 Friends Helping Friends campaign in Calgary, Airdrie, Lethbridge, Brooks, Strathmore, Cochrane, Chestermere, and Okotoks was the most successful in the campaign’s 25 year history!

Since the program’s launch, millions of dollars have been raised for the Calgary Food Bank and food banks across Southern Alberta. This year, our store teams and customers stepped up to the plate like never before, and their amazing efforts and generosity were certainly reflected in the results! Throughout the month of April, a total of $476,053 was donated in food and funds to support food banks across Southern Alberta.

Thank you to our valuable store teams for their outstanding commitment to this year’s campaign! Day in and day out, you continue to prove the powerful impact we can have when we work together.

Campaign Results

Food Donations (value) – $396,472

Checkstand Donations – $68,581

Sobeys Inc. Match – $11,000

Grand Total – $476,053

Assistant Store Manager Eric Blaskin (Safeway Westhills) speaking to CTV about the campaign.​