How the west was won

If you ask Darrell Jones how he’s changed his approach to the Overwaitea Food Group business over the years, he’ll tell you it’s been about learning to roll with the punches.

“I’ve learned how important it is to be adaptive and adjust your plans to fit a new reality,” says Jones, Overwaitea’s president and a 40-year veteran of the company. “Every day you open up the newspaper or turn on your television and there’s something new and exciting happening in the retail business.”

It’s an enterprising perspective for a century-old independent grocer (Overwaitea celebrated its 100th anniversary last year).

Langley, B.C.-based Overwaitea boasts about 150 stores, with its Save-On-Foods banner accounting for the majority of the real estate. The brand is so appealing that Overwaitea plans to convert most of its other banners to Save-Ons, with the exception of a few PriceSmart stores that specifically cater to the Asian demographic, as well as its upscale Urban Fare format.

What else does Overwaitea have going for it? An exceptionally loyal customer base. In 2014, BCBusiness ranked Save-On-Foods the most loved brand in British Columbia. And in 2015, a poll by Ipsos Reid named Save-On-Foods B.C.’s most trusted brand.

Not only that, last June, Gustavson’s national Brand Trust Index ranked Save-On-Foods the top supermarket in the Pacific region, beating out Walmart.

With accolades like that, it would be easy for Overwaitea to coast, but Jones certainly isn’t one to rest on his laurels. The company opened 13 new Save-On-Foods stores last year and it’s pushing forward with a Prairie expansion, hoping to win the same customer loyalty in Saskatchewan and Manitoba that it has won in British Columbia and Alberta.

Ambitious plans are in the works to open 40 Save-Ons in the two provinces over the next three to five years, including stores in Winnipeg, Regina, Saskatoon and Moose Jaw.

Overwaitea’s aggressive expansion was spurred by Empire Company’s purchase of more than 200 Canada
Safeway stores in 2013.

That meant “one less competitor for us and it presented new opportunities,” Jones said at the time.

On top of that, a little over two years ago Overwaitea purchased 15 stores from Sobeys (an Empire company)
and last year, it took over a former Thrifty Foods location in Coquitlam, B.C. and bought three B.C. Marketplace IGA stores from H.Y. Louie.

Seem like a lot of movement? It was. And all carefully orchestrated; for instance, during the most recent store openings and acquisitions, a crew of Overwaitea staff was behind the scenes, simultaneously conducting market research on the new cities awaiting Save-Ons.

Jones says, prior to any expansion, Overwaitea does exhaustive research and spends considerable time trying to understand its new markets and refining what the new store’s offering will be.

“We spent about two years doing research for our Regina and Winnipeg stores,” says Jones. “Then, before we even ordered material or started construction, we went to the customers and asked them what they were looking for in a grocery store and what was missing from the stores in their area.” The goal isn’t just to open another store—it’s to open stores tailored to the area’s ethnicity and socio-economic background.

So, on a chilly Saturday morning in November, Save-On-Foods opened the doors of three new stores, marking the Western Canadian grocery chain’s Winnipeg debut.

Perhaps the most notable of the three is the 60,000-sq.-ft. Northgate store, which the company says is “tailor-made” for Winnipeg.

The store is modelled after the chain’s newest format—Save-On-Foods International—which features a mix of mainstream groceries and “foods from around the world.” The International stores run about 25,000-sq.-ft. larger than a typical Save-On.

Overwaitea first introduced the concept in Surrey, B.C.’s Fleetwood neighbourhood a little over a year ago. The
Surrey store caters to a population where roughly half of the 400,000 residents are visible minorities, with one-third being South Asian. Selection-wise, the store carries 8,000 Asian products.

Save-On-Foods’ Northgate location follows a similar strategy, letting customers influence its product assortment. The store stocks nearly 6,000 international products. Brenda Kirk, vice-president of store merchandising, told media on opening day that there are more than 36,000 Filipino-Canadians living in northwest Winnipeg. To cater to that population and other South Asian Canadians in the neighbourhood, Northgate carries more than 700 SKUs and the largest selection of rice in Western Canada.

To satisfy the large number of Eastern European shoppers, smoked meats such as kolbassa, sausages, jerky and pepperoni are all made fresh at an in-store smokehouse. Jones is also quick to call attention to the store’s perogy machine—perogies, of course, being a staple in many Ukrainian diets.

“We make nine different varieties,” he says. “Dessert perogies, traditional perogies, cheeseburger perogies—they’re a hit.” A fan favourite, says Jones, is a perogy the staff created that’s filled with smoked salmon and cream cheese—Eastern European meets West Coast.

There are also areas of the store dedicated to consumers with British backgrounds (specifically a large selection of Tesco-branded products) as well as products of German, Polish, Ukrainian, Russian, Mexican, Caribbean and Middle Eastern origin. The goal is to create a one-stop shop where customers of all ethnicities, ages and socio-economic backgrounds can find the foods they want.

Grocers usually place their stores in three different buckets, says Jones: full service, discount or ethnic. “I don’t buy it,” he says. “You can give great value, great service and still provide the right ethnic mix.”

This fusion of formats is one of the reasons Save-On-Foods has been so successful. Jones says there are certain Save-On characteristics that are consistent across all of its stores, like the “Always Lowest Guarantee” price program, for example. The brand, however, is ready to adapt and change its product offerings and merchandising strategies to fit what the customer is asking for.

“There are two or three things that will be critically important to your customer no matter what: you need to give your customer exceptional quality, you have to give great value and you have to listen to what they want and give them that,” he says. “The basic things that made a grocer a good retailer in the past still make you a good retailer now, you just need to change how you deliver and make sure you do it better than you’ve ever done it.”

Following this approach was critical when Overwaitea ventured into online shopping and grocery delivery a few years back. If customers don’t come home to the best-quality produce, “they’re never going to come back to us,” says Jones. “When you do home delivery, it makes you even more conscious of making sure you’re giving the best quality to your customers.”

Jones’s strategy appears to be paying off. Ipsos’s Michael Rodenburgh says customers feel a sense of pride in Save-On as a familiar day-to-day presence. The Gustavson study showed that Save-On ranked especially high in social equity and sustainability, which includes contributions to communities and treatment of workers and suppliers. The latter may be why more than 13,000 Winnipeggers applied for positions at the three new Save-On stores.

While expansion into central Canada is certainly not out of the question, for now, Jones says, Overwaitea is going to concentrate on its Western Canada stores and upcoming openings in Saskatoon and Moose Jaw. “We don’t want the same cookie cutter store everywhere,” he says, adding that the company is focused on spending the time and money to make sure its stores are a good fit for the communities they’re serving.

“The first thing you should ask yourself every day is, ‘Is this the best thing for the customer?’ ” says Jones. “If you do that, I think you’ll live to fight another day.”

This article originally appeared in Canadian Grocer's March 2017 issue.