Editorial — June 27, 2014

Staff ~ The Prince Albert Daily Herald
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When one giant corporation buys another one, there is invariably an attempt to save money.

It’s a pattern that’s been repeated over and over again in the business world.

So it’s with sadness but not surprise that we received the news on Thursday that the local Sobey’s grocery store will be closing on Sept. 25. It’s one of 50 stores closing across Canada, with the majority in Western Canada.

You’ll hear different opinions from different people whether the city is over-saturated with grocery stores but that’s a debate for another day. Instead, our hearts go out to the people who have lost their livelihoods.

The company currently has about 1,500 stores across the country. It acquired 213 Safeway locations in the $5.8-billion deal last June.

At the time, Sobeys executives said they had been hoping to buy the chain for more than a decade.

“The acquisition of Canada Safeway represents an excellent strategic fit, strengthening our presence in Western Canada,” said Paul Sobey, chief executive officer of Sobeys‘ parent company Empire Co. Ltd., told the Globe and Mail a year ago.

At the time, Sobeys said that savings would come from integrating buying, administration, marketing and IT costs.

But the company obviously thought that what they considered underperforming stores would have to go.

The closures come in the wake of intense competition in the Canadian grocery sector, especially since Wal-Mart has made a more pronounced move into the grocery business.

Sobeys said that the move would cut about 1.9 per cent off its future earnings, a sum of about $400 million. The chain remains No. 2 in the Canadian grocery war behind Loblaw Cos. Ltd.

The stores that are closing have a total of 1.5 million square feet or 3.8 per cent of Sobeys gross total.

The business case makes sense but that does little to soothe the people who have served the company so well in this city. On a personal level, we’re obviously more interested in how our friends and neighbours are faring than how the bottom line is doing.

CEO Marc Poulin seemed sensitive to that fact on Thursday as he announced the closures in a statement.

“We’ll try to minimize the amount of losses by providing many of our employees opportunities at employment at other stores. It’s never an easy decision to announce a closure — we know it impacts both customers and staff.”

Let’s hope the staff is treated well upon their departure in September and that the job market remains decidedly in their favour.

At present there are more than 800 jobs available in Prince Albert, although the staff at Sobeys will surely face big changes in what they do.

Good luck to all of them.

 

Prince Albert Daily Herald

Organizations: Sobeys, Canada Safeway, Empire Co. Ltd. Globe and Mail Wal-Mart Prince Albert Loblaw Cos. Ltd. Daily Herald

Geographic location: Western Canada

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