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STELLARTON, N.S. -- Sobeys, Inc. here will reportedly convert most its IGA stores in the province of Ontario to the company's Sobeys, Foodland, or Price Chopper banners.
CBC News Online reported yesterday that Sobeys Ontario president Craig Gilpin informed IGA franchisees of the plan in a confidential letter the news organization got its hands on. According to the report of the letter, the company will offer to buy out those IGA independent franchisees that don't want to convert their stores, but will continue to honor its franchise agreement with franchisees that wish to remain under the IGA brand.
Sobeys officials were not available to comment on the report yesterday.
As part of a comprehensive restructuring of its business, Sobeys is said to be assembling its store under five formats over the next few months: Full-service flagship Sobeys stores, community-service Foodland stores, Fresh-service Sobeys stores, value-priced Price Choppers, and Sobeys Express c-stores.
The company is already in the midst of renovating some of its IGA locations to the new formats. Many of the IGA stores will be rebranded under the Foodland banner because they're franchise-owned stores with strong ties to their communities, according to the letter.
The conversions represent Sobeys' bid to stand apart in a tough market. "We have been transitioning from a banner-focused, wholesale-driven organization to a customer occasion-based format, retail-focused set of stores and operating regions," Gilpin said in the letter.
In other Sobeys news, the retailer said this week that it has completed the purchase of substantially all of the food distribution assets of Achille de la Chevrotiere Ltee and its associated companies, following completion of due diligence and receipt of all required regulatory approvals.
"This acquisition further enhances our strengthening position in Quebec and expands our presence to the Abitibi-Temiskaming region of Quebec and Northern Ontario," noted Marc Poulin, president operations, Sobeys Quebec, in a statement.
The assets include 25 retail store operations, other wholesale supply agreements, and distribution facilities in Rouyn-Noranda, Que. The purchase price was about $80 million.
Sobeys Inc. owns or franchises over 1,300 stores in all 10 Canadian provinces under retail banners that include Sobeys, IGA extra, IGA, and Price Chopper.