H.Y. Louie Co. has sold three of its MarketPlace IGA stores in B.C.’s Lower Mainland to Overwaitea Food Group, which will turn the outlets into Save-On-Foods stores.
“We’ve had the stores up for sale for some time,” says Mark McCurdy, general manager of marketing and brand development at H.Y. Louie.
The sale affects the Centrepoint store on Main St. and Dunbar store on West 41st Ave. in Vancouver and the Old Orchard Mall store on Kingsway in Burnaby. It brings Overwaitea’s total store count to 151 under its various banners.
“They just haven’t been financially operating to the degree required” for a variety of reasons and “it would have been cost-prohibitive” to redo them, McCurdy says.
But Overwaitea president Darrell Jones says the stores are in good locations and are “in markets that fit our demographics and are a good fit for Save-On-Foods. There’s always small amounts of overlap (with existing locations), but these stores were good locations where we didn’t have any stores in close proximity.”
Save-On-Foods tailors its stores to fit the communities it’s in and the stores will be completely redone, Jones says. “We’re confident that when we rebrand them and remerchandise them that they’ll do well under the Save-On-Foods banner.”
He says among the changes will be kitchen offerings that will include chicken wings and a soup and sandwich bar, “a fantastic selection” of produce, local , natural and organic fare and “the best bulk food mix of any supermarket chain in Canada and the chain’s marketing programs such as Darrell’s Deals.
The purchase and renovation costs were not divulged.
H.Y. Louie’s 28 remaining IGA stores throughout the Lower Mainland, Fraser Valley, Sunshine Coast and Okanagan Valley “are very viable, very strong” and there are no plans to sell them, McCurdy says.
The three unionized stores were part of the H.Y. Louie business unit Tober Enterprises.
H.Y. Louie has two company-owned IGAs and the rest of the stores are owned by franchise groups. Only two of the franchised stores are unionized.
Under the terms of the collective agreement, the 220 employees of the three stores will continue to be employed by Tober Enterprises, which will now be owned by Overwaitea. The employees will be transitioned to Save-On-Foods’ agreement with the United Food and Commercial Workers Union.
“We wanted to make sure that our employees, who have been very good to us, were taken care of. Save-On-Foods was really good in that regard,” McCurdy says. “They have chosen to take all the employees, including the managers, at those stores. They felt not only was it the right thing to do, but also good continuity for the communities that they operate in.”
Jones says the current MarketPlace IGA employees “are a huge part of the asset that you bring,” with many of them having served customers for 20 or 30 years. “There’s a great relationship built between the customers and the team members.”
The stores that were sold ranged from 20,000 to 25,000 sq. ft., while the remaining IGAs are from 10,000 to 25,000 sq. ft. in size.
The sales take effect March 31 but the stores will likely close a few weeks before that date, McCurdy says.
The stores will likely only need to be closed for a few weeks for renovations and “we’re going to do our best to figure out how to keep the employees busy,” Jones says. “There’s always lots to do when you’re remodeling and renovating.”
Jones says the acquisition adds to Save-On-Foods’ growth strategy, in which it has opened 23 new stores in the last two years and plan to open an additional 25 more stores in the next 24 months.