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TORONTO - In an effort to increase its presence in the province of Ontario, the Sobeys supermarket chain has acquired Commisso's Food Markets and Commisso's Grocery Distributors, Canadian Press reports.
Sobeys, the second-largest Canadian supermarket chain after Loblaws, announced yesterday that it will purchase 15 grocery stores, six warehouse-style outlets, and a wholesale business and distribution center, all in southern Ontario, for C$65 million. The deal is expected to close in early 2004.
Additionally, Crombie Leaseholds, a subsidiary of Sobeys parent Empire Co., is paying C$42 million for assets of Commisso's Properties, Inc. -- an enclosed shopping mall in Port Colborne; shopping plazas in Welland, Niagara Falls, and Hamilton; and a St. Catharines location.
According to Sobeys c.e.o. Bill McEwan, "The acquisition of Commisso improves our presence and market share, particularly in the Niagara Peninsula, where we haven't had much presence. There's very little overlap with our current business, and it immediately establishes for us a business base for us in this part of Ontario."
The privately owned Commisso's stores, based in Beamsville, Ont., are concentrated in the Niagara region. Sobeys said that the Commisso's cash-and-carry and wholesale operation, which includes the former Lanzarotta Wholesale Grocers, greatly expands Sobeys' Toronto-area wholesale business. According to Sobeys, the stores will operate under the Commisso name "for the foreseeable future."
Sobeys owns or franchises more than 1,300 stores under such banners as Sobeys, IGA, and Price Chopper.
Shares in Sobeys, which is scheduled to report its second-quarter results next week, were dealt a blow in September after it reported a plunge of nearly 9 percent in quarterly profit and warned it might not meet its growth targets for the year. The company said the results mirror Ontario's sluggish summer selling season and the residual costs of a six-week labor dispute in Whitby, Ont. McEwan informed shareholders at Sobeys' annual meeting that over the next year the company intends to spend about C$550 million renovating and replacing stores.