Sobeys reorganizes its western business

Nearly two years after it purchased Canada Safeway, Sobeys is consolidating its businesses in Western Canada.

The move, part of changes to the company’s national reporting structure, will see Sobeys West, Thrifty Foods and Safeway businesses combined into a new Calgary-based group called the “Western Business Unit,” headed by Jason Potter.

In an internal memo dated April 29, obtained by Canadian Grocer, Sobeys’ president and CEO Marc Poulin said the “majority” of national support functions now in Victoria, Vancouver, Edmonton and Winnipeg would move to the new unit’s headquarters in Calgary.

The consolidation impacts a range of back-room functions, including IT, legal, food safety and loss prevention and will involve some job cuts.

In the four-page memo, Poulin wrote that having one main office for western operations would provide a “stronger foundation” for the company. Sobeys will maintain “select field positions” in multiple markets to support its distribution and retail networks.

Andrew Walker, Sobeys’ senior vice-president of communications and corporate affairs, confirmed to Canadian Grocer that there would be job losses as a result but did not provide specifics.

“We’re making these changes to grow our business,” said Walker. “Some jobs will be eliminated as a result of the process we’re going through, but the focus is to grow our business in the market.”

Sobeys purchased Canada Safeway from California-based Safeway in November 2013 for $5.8 billion. At the time, Sobeys officials estimated that combining the two companies would result in $200 million in cost savings.

Last year, Sobeys closed 50 underperforming stores and also worked on the mammoth task of switching Safeway’s technical systems to Sobeys’ SAP systems.

“We are now in a position to create a harmonized approach for our western operations and national support functions in the West,” Poulin wrote in his memo.

Among the changes he outlined:

• Sobeys is dissolving its Multi-Format operations business unit established in 2011, and dividing it into two distinct sides: the Western Business Unit and the Atlantic & Ontario Business Unit. (IGA Operations in Quebec, headed by Claude Tessier, will be unaffected.)

• Potter, president of operations for Western Canada, will head the new Western Canada unit. He will also oversee the company’s Atlantic & Ontario business unit until a president is found. (Sobeys is looking within the company and outside for candidates)

• As part of the restructuring, Safeway president Chuck Mulvenna; Sobeys West general manager Sam Bartucci, and Thrifty GM Jim Dores will report into Potter. Mulvenna was president of Canada Safeway prior to Sobeys buying the company.

• Sobeys Atlantic GM Peter Doucette, Sobeys Ontario GM Trevor Bartlett; discount format GM Rob Adams and convenience and fuel VP Valerie Ryan will also report into Potter until a president for the Atlantic & Ontario unit is found.

Sobeys is also recruiting for a chief merchant officer whose job will include overseeing “the development of best-in-class tools and processes.”

Departments that will report into the CMO’s office include Sobeys’ "Category Management Centre of Excellence," merchandising, marketing and digital strategy.

Among the executives who will report to the new CMO when that person is hired: Dale MacDonald, SVP of national procurement; Mary Dalimonte, SVP of merchandising and commercial programs; Doug Brummer, SVP of marketing; Ray Hepworth, VP of the centre of excellence and category management optimization; and Alain Dumas, senior director of public affairs (digital strategy).

Senior VP of operations and optimization Lorne MacLean will still run the Category Management Centre of Excellence in Sobeys’ retail operation, report to Poulin. Neil Checketts, VP of food safety, quality assurance and regulatory affairs will report to MacLean.

The future structure of retail operations, liquor, wholesale, marketing, category management and merchandising for the Western Business Unit has not been finalized, with Poulin writing that additional time is needed to determine how to best support and lead the network of stores.

In addition to the elimination of some positions, other roles will be modified and responsibilities altered. While the “greater part” of the restructuring will occur in the West, Poulin said that roles and reporting relationships could change in other regions.

Walker declined to characterize what type of cost efficiencies the restructuring will create. “We’re not going into that level of detail,” he said.

“The objective is to create a structure that supports our business and creates a business unit that supports our stores in Western Canada, and serving our customers,” he said. “There will be efficiencies through that process, but we’re not providing details on what they look like.”