Four things you may have missed from Sobeys' results
Last week, Empire Co. reported its first-quarter earnings of its 2017 fiscal year.
Sobeys first quarter sales fell by 1%, with same-store sales down 1.2%. Francois Vimard, Empire’s interim president and CEO, said much of the difficulties the company faced in the last year came from missteps in the integration of Safeway operations in Western Canada.
"We were too inward focused during this transition and we couldn't provide the service our customers deserve or expect,'' said Vimard during the annual general meeting for Empire Co. on Thursday.
While much of Empire’s results and the analysts call that followed focused on Safeway integration and Sobeys’ new price promotions, there were a few other elements you may have missed. Here are some takeaways:
Sobeys is taking a three-pronged approach
In the short-term, to help improve results Sobeys will concentrate on three distinct buckets: building sales, reducing costs and renewing focus on store-level execution.
The company believes the direction it's taking will help it see the return of long-term profitability, Vimard said.
The company is keeping it simple
An essential component of Sobeys plan to build sales is its new pricing initiative, which launched in Quebec earlier this year and in Western Canada this month.
Vimard said to make the pricing change as easy for customers as possible, the company is working on simplifying its message for shoppers in the West, learning from its experiences in Quebec.
“We tried to simplify this in the West so when the customer walks down the aisle, they understand what we’ve done,” he said.
There are no plans for a discount banner in the West…yet
When one analyst asked Vimard if Sobeys had any plans to change its strategy in terms of store format, he said the company isn’t ready to announce the launch of a discount format in the West. Sobeys main discounts banner, FreshCo, is only in Ontario now.
The retailer also noted that while moving to a single banner for its conventional stores, which would see the Safeway stores rebranded as Sobeys, is not “off the table,” the aim at the moment is to harmonize the offers between the two formats.
Vimard added that Sobeys is continuing to work on its ethnic program, and its second Chalo FreshCo will open in Ontario in two weeks.
There’s no word yet on who will lead Sobeys
It’s been a little over two months since Sobeys CEO Marc Poulin left the company. Vimard, Empire’s then CFO and administrative officer, stepped in as the company’s interim president and CEO.
During the analysts call, Vimard said the Empire board has put a process in place with the help of an outside company to help find a candidate to lead Sobeys. But he didn't say how long it would be until a new CEO is found.
Vimard, however, noted that he is prepared to make strategic leadership decisions on the company’s behalf until that time. “The board gave me the full power to do whatever I think is good for the business,” he said.