Arz acquistion helps Loblaw expand multicultural reach

Loblaw Companies Limited is making another claim in the ever-growing multicultural market.

The retailer confirmed Wednesday morning that it is buying Arz Fine Foods–an established Middle Eastern grocery retailer located in Toronto. Terms of the deal were not immediately available.

Arz specializes in Middle Eastern and Meditteranean produce, groceries, deli, fresh and frozen prepared foods, and baked goods. It’s made up of a 10,000-square-foot retail grocery store, a food commissary and a distribution centre.

“With Loblaw, we will continue to maintain our authenticity and enhance our customer experience and reach,” said Armand Boyadijan, Arz’s co-founder,  adding he's excited at the prospect of reaching even more Canadians with the help of the Loblaw brand.

Vicente Trius, president of Loblaw, said that Loblaw will take the same approach to Arz as it did with Asian grocery chain, T&T Supermarket.

Loblaw acquired T&T in 2009 for $225 million. The chain now has 22 locations–up from 17 when the purchase took place.

Should Loblaw indeed follow the same strategy, BMO analyst Peter Sklar notes, "we expect the company to integrate more authentic and relevant Middle Eastern assortment into its merchandise."

While some Loblaw locations already carry Arz Fine Foods brand Baklava, the retailer plans to provide a wider selection of its specialty products in the coming month.

An article in the Globe & Mail also notes Loblaw will develop a line of private-label Arz products for its stores, choosing from a line of Meditteranean fare such as tahini and baba ghanouj.

Sklar surmised that Loblaw could choose to grow the Arz store footprint to compete with Adonis (a subsidiary of Metro) which recently opened its second store in Ontario, in Scarborough. That store is just two kilometres away from Arz, he noted.