As a review for those who may be unfamiliar, Sobey's with its 87 Price Choppers, was running a distant 3rd in the "limited assortment" grocery channel in Ontario, behind Loblaws Inc no frills (with 155 stores) and Métro Inc food Basic$ (with 118 stores). The word on the street was that Price Chopper's profit margin was negligible. And the "limited assortment" or "hard discount" sector as it is sometimes called, accounts for a huge and growing, portion of the Ontario grocery business. Over the past 2 years, with the launch of Walmart Supercentres, the grocery landscape has become uber competitive. So Sobey's had to take some corrective action.
The conceptual positioning behind FreshCo seems based on 5 pillars
-- more "fresh" selling space (produce, meat, seafood, deli, local bakery)
-- more ethnic (international food sections)
-- cleaner appearance (white fixtures), more open
-- still "hard discount" (but probably a little less)
-- better assortment tailoring to neighbourhood demographics
To date there now have been 49 Price Chopper conversions, and the feedback from all that I have personally seen and read has generally been quite favourable. However, Sobeys President Bill McEwan recently stated "We're very pleased with the top line ... The bottom line associated with these stores are not what we had anticipated but they are what we were prepared for".
So profitability is lagging expectations, but apparently the die is cast, and conversions will continue.
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