The Nova Scotia-based company decided last year to reduce the 22 brands it operated across the country to a select few. The embarrassment of riches was a result of its 1999 purchase of the Oshawa Group, a much larger firm with brands such as IGA, IGA Garden Market, IGA Extra, Price Chopper, Food Town, Knechtel, Marché Bonichoix and Les Marchés Tradition under its umbrella. The acquisition boosted Sobeys’ annual revenues from about CN$ 3 billion per year to $ 11 billion annually.
Helen Noels, Sobeys senior vice-president of marketing, says the company decided to take the Sobeys brand, already prevalent in Eastern Canada, to the West. The idea was to build upon the reputation of its IGA Garden Market locations in Western Canada as a source for fresh food by adding in-store pharmacies, floral shops, health and beauty departments, and enhanced grocery and seafood offerings. The one-stop Sobeys shopping experience is accompanied by its copyrighted tag line, "Ready To Serve."
Noels says the conversion of 25 Garden Market locations in Western Canada (part of the company's CN$ 600 million budget for capital improvements) presented a challenge because the blueprint for change was in stark contrast to the developmental profile of the phased-out locations.
"All the IGA Garden Market stores were designed individually. Each store was meticulously planned with the franchisee to fit the neighborhood," she says, noting they ranged in size from 38,000 to 43,000 square feet.
"We designed a tool kit of consumer communications elements. The look and feel of those elements is consistent. We modified the size and quantity of them but we didn't change the brand essence in any way," she says.
"The challenge was more stripping out those kinds of elements. The bakery look and feel was different in every store — there wasn't a Garden Market look and feel to modify — so we were starting fresh with each store."
She says the conversion was much more than changing the name on the outside of the buildings, it was about developing a different shopping experience and promise to its customers. That experience takes place in a medium-sized location focused first and foremost on food with unwavering attention on service that can be ready to serve, she says.
"Not everybody wants to shop in a 100,000-square-foot store," she notes. “We're appealing to the consumer who is very time-pressed, who has family and who appreciates service."
Noels adds it wasn't too big of a stretch for the staff to embrace the new strategy.
"Much of it they were already doing. The stores in the West were known for their service levels in the fresh departments. Our consumer positioning, ‘Ready To Serve,’ actually gave them credit for that," she says.
She says the hyper-competitive grocery industry across the country dictates that players intent on maintaining or gaining marketshare continue to evolve and provide consumers with the type of shopping experience they're looking for.
"We're fortunate enough to have a variety of formats and brands [that] we think in certain circumstances can deliver that promise to consumers," she says.
"We realize there is a cost attached to a more delightful shopping experience and we have a discount offering for people who don't want to pay for that. Sometimes the (higher-end) experience results in improved margins, sometimes the higher labor costs outstrip any margin benefits. We try to find a nice balance within the store in terms of the overall offer," she says.
Bill McEwan, president and CEO of Sobeys, says he is confident the conversions will go well because of the company's recently-acquired experience in changing its IGA Garden Market stores in Ontario to Sobeys and its Sobeys stores in Quebec, a predominantly French-speaking province, to IGA Extra.
"We've already gone through those conversions with good success. It's all about having the appropriate format, offering and brand in the right markets," he says.
McEwan notes the company has a number of other brands that have survived the cut and will be expanded; Price Chopper, its discount offering, IGA stores (without the Garden Market moniker) in smaller communities and Food Town (broad offering, limited selection) also in rural areas.
"The IGA brand will stay and we're going to grow it. It's a whole different clientele at IGA stores, they're smaller," he says.
Noels notes there is an advantage to Sobeys as the only national grocer to have a single banner across the country.
"We believe that with the mobility of consumers today, there's something special about being able to go into a store in Antigonish (Nova Scotia) or Alberta and still experience the same promise," she says.