FreshCo’s expansion in the West continues with plans to convert six Safeway locations in British Columbia by spring 2020.
In a press release, FreshCo parent Empire said the combined closure costs related to the six conversions were “estimated to be approximately $15 million, which will be charged to operating earnings in the first quarter of fiscal 2020.”
Five FreshCo stores across Manitoba and B.C. are currently up and running, and an additional seven stores are slated to open in B.C. over the coming months. In all, 18 locations have been confirmed in Western Canada.
“Western Canada is responding extremely well to our smaller box discount format,” said Empire president and CEO Michael Medline. “We’ve been hyper-focused on selecting the right locations for FreshCo stores and are converting poorly performing Safeway and Sobeys stores.”
“Opening FreshCo stores in these locations is allowing us to not only leverage existing real estate within our network, but also win market share we simply couldn’t compete for in the past,” he added.
FreshCo mades its debut in Western Canada in April in Mission, B.C. New FreshCo stores feature branding and a consumer experience that were introduced at four locations in London, Ont. last summer, and yielded “positive results and customer feedback,” Medline told analysts during a conference call in December.
The plan to gain market share through discount offerings in Western Canada comes just as the company is starting to regain its footing after a period of losing ground to competitors following its acquisition of Safeway in 2013 for $5.8 billion.
“Discount is the fastest growing retail segment and we’re now participating in a meaningful way in Western Canada, providing customers with more choice and market leading low prices,” said Mike Venton, general manager, discount. “Customers have been very excited about our international product offering and easy-to-shop store format and we’re ready to continue building on our progress in B.C. and Winnipeg.”