Alberta’s Freson Bros. chain has inked a supply deal with Overwaitea Food Group.
The deal, announced on Wednesday, will see Overwaitea supply grocery products to Freson’s 15 stores, all of which are located in Alberta and mostly in smaller towns such as Barrhead, Peace River and Hanna.
The deal takes effect Jan 1, 2015 at which point Overwaitea will become Freson’s exclusive grocery supplier, said a spokesperson from Overwaitea.
The agreement also lets Freson Bros. stores carry Overwaitea’s private-label Western Family brands.
"We feel this partnership between our two Western-based companies makes good sense to both of us," said Doug Lovsin, vice-president of operations for Freson Bros. "We will work together to provide our customers access to the freshest, highest quality goods available."
Up until now Sobeys Inc., had supplied Freson with grocery products.
The Overwaitea-Freson deal is the latest shift in the western grocery market as retailers look to capitalize on what has become the fastest growing part of the country.
Last year, Sobeys paid $5.8 billion to purchase the Canadian division of Safeway, including 213 supermarkets and Macdonalds Consolidated, a wholesale division.
In February, acquiescing to the Competition Bureau, Sobeys sold 30 Safeway and Sobeys stores.
Fifteen of those stores went to Overwaitea Food Group.
The Langley, B.C.-based independent grocer, owned by the Jim Pattison Group, now operates 145 stores across Western Canada under banners such as Save-On-Foods, Overwaitea Foods, Urban Fare and Price Smart.
Last year Overwaitea opened its first three stores in Calgary under the Save-on-Foods banner.
Company president Darrell Jones told Canadian Grocer earlier this year that his company sees opportunity to expand beyond its B.C. and Alberta base into Saskatchewan and Manitoba where it currently does not operate any stores.