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 three 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
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 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 with our expansion of Discount in the West, 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’ changing 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 more options to do their shopping. They continue to demand our conventional full-service stores but they are also asking for a more price-competitive Discount format. Giving our customers what they want is the best way to win them back and grow our overall business.
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 brick 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.
Working together for a successful future
We all share a vested interest in growing our business together. 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.