Marc Poulin gets candid about Safeway integration

Sobeys CEO talks about the retailer's past challenges and future priorities
1/19/2016

The slowing economy in Western Canada has made it more difficult to integrate Sobeys’ acquisition of Canada Safeway into its operations, says Marc Poulin, president and CEO of Sobeys.

Poulin says “it can’t be hidden” that it has been harder for the company to integrate its $5.8 billion acquisition of Safeway in 2013 into the company than it would have been if the economy in Western Canada was functioning the way it was two years ago.

Nor has the integration of Safeway operations into Sobeys been glitch-free, admits Poulin, who was speaking to the Canadian Club in Montreal on Monday.

He told his business audience that the merging of Safeway’s IT system into Sobeys’ has been the number one priority during the integration.  Other priorities include improving synergies in the supply chain (or economies of scale), and integrating personnel, house brands, distribution channels and marketing.

However, in the long-term, Safeway will serve as a major plank in Sobeys’ strategy to transform Canadians’ relationship with food as part of its “Better food for all” program, Poulin says.

He says about 60% of the Safeway stores in Western Canada are in the major cities of Vancouver, Calgary, Edmonton and Winnipeg and their average size of 42,000 sq. ft. makes them ideal for providing full-service to consumers.

The aim of the strategy is for Sobeys to become a Canadian pioneer in everything from fresh foods to better fast food solutions, he says.

“We think it’s absolutely necessary” as a way to position the company for the future, says Poulin, citing a survey finding that 73% of Canadians would like to eat better than they do now.

Poulin ran a corporate video that showed half of adult Canadians are overweight or obese and, as it now stands, the current generation of children will have shorter lives than their parents. Canadians are eating poorly and deserve better, the video noted.

Consumers are overly reliant on unhealthy packaged fare and fast food, no longer know how to cook and have to be taught what to do with food. They’re also looking for food solutions and easier ways to feed their families.

Poulin says the eating better strategy is based on four strategic pillars that include discovery of new foods, choosing healthy food, improved eating habits and responsible choices.

The strategy also requires a number of internal changes that are not part of the traditional modus operandi of grocers, he says, including new ways of working with suppliers and greater transparency.

Poulin adds Sobeys’ new automated distribution system is a pivotal part of the strategy. The system, which was bought when the Canadian dollar was faring much better vis-à-vis its American counterpart, is working well, he says.

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