Poulin pleased with performance at Sobeys

10/2/2012

With his company coming off a sizzling first quarter, the new president of Sobeys says the $16 billion company is committed to raising the stakes in the highly competitive grocery sector.

“We’re quite pleased with the performance, but it’s a business where you’ve got to win on almost a daily basis,” said Marc Poulin during a conference call with analysts.

Sobeys’ sales for the 13-week period ended Aug. 4 were up 9.6 per cent, or $4.5 billion, over the corresponding year-earlier period (the food retailing arm of the Stellarton, N.S.-based Empire Company, Sobeys operates more than 1,300 stores under six major banners: Sobeys, IGA, IGA Extra, Thrifty Foods, Foodland and FreshCo).

Same-store sales, a key performance barometer within the retail sector, were up 1.8 per cent, fueled by what Poulin described as a “continued promotional environment” across the country.

Breaking down the sales numbers further, Poulin told analysts that meat and produce sales were deflationary “to a certain degree,” while grocery was somewhat inflationary. Same-store traffic and basket size for the quarter were both in “positive territory,” he told analysts.

The company remains “food focused” and committed to offering an “exceptional food experience” for its customers said Poulin, a 16-year veteran of Sobeys who succeeded the retired Bill McEwan in June.

“The direction is not changing,” he said. “It’s a clear focus on the quality of execution at store level and initiatives that will enhance the size of the company.”

Poulin said he “continues to be pleased” with the performance of Sobeys’ Ontario-based FreshCo banner, which has now grown to 70 stores following the first quarter conversion of two former Price Chopper locations.

The banner’s results were driven by a new price promotion called “FreshCo Frenzy”–which saw certain items sell for $1–and an emphasis on fresh meat, said Poulin.

There are no plans to expand FreshCo beyond Ontario, said Poulin. “It’s a new brand, and there’s a lot of work to establish it in the marketlace and we have to work consistently at making the full benefit of the capital we invested in that business .

“We want to get maximum potential for the investment we made in that banner before we move onto other opportunities.”

Poulin also said that it was unclear when the impact of a September 2011 deal that Sobeys’ wholesale arm signed with U.S. retailer Target will show up in the company’s financial results. The grocer signed a long-term agreement with Target that will see it provide the U.S. retail giant with frozen, dairy and dry grocery products including both national and private-label brands.

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