It’s still early in the rollout of Canadian grocer Sobeys Inc.’s new convenience store program, but the results are promising.
By David Bennett, Senior Editor
It’s true that every chain begins with one link. Of course, it helps when you have several other chains to take up the slack, if necessary.
Last December, Sobeys Inc.—a wholly-owned subsidiary of Empire Company Ltd. and the second largest grocery retailer in Canada—rolled out Sobeys express, which is meant to test the retail waters in the way a smaller, convenience format affords.
Located off Exit 33 of the Trans-Canada Highway in the town of Antigonish, the pilot store combines a wide selection of traditional grocery store items with healthier, ready-to-eat snacks and meals. The location also offers Shell-brand fuel.
The location is singular, but the initiative isn’t a one-off. Rather, the company is set on executing a larger plan in the coming months.
“In our current capital plan, there are a number of new Sobeys express stores and (plans to) convert other locations to the Sobeys express format,” said Valerie Ryan, Sobeys’ vice-president of convenience and fuel.
Sobeys in 2012 grew its retail gas operations in Québec and Atlantic Canada with the purchase of numerous Shell retail gas locations. This acquisition provides the grocer several options for expanding the Sobeys express program with a mix of new-build and renovated stores at some of the corporate-owned Shell stations.
Choosing other locations will require some thought, based on logistics and other business considerations, but the company isn’t short of options. Based in Stellarton, Nova Scotia, Sobeys is a $24 billion company with more than 1,500 corporate and franchise stores in all 10 provinces under retail banners that include Sobeys, Safeway, IGA, Foodland, FreshCo, Price Chopper, Thrifty Foods and Lawtons Drugs, as well as more than 380 retail fuel locations.
The potential of Sobeys express is expansive as its parent’s portfolio. The retailer’s goal to integrate fuller and better meals and other offerings with the shopping experience as well as to reshape its business plan to entice a broader customer base is why Convenience Store Decisions has selected Sobeys express as a chain to watch in 2016.
TIME TO PLAN
This isn’t the only c-store platform of Sobeys. The grocery retailer currently operates 149 Needs Convenience locations throughout Eastern Canada. Converting existing locations, including those under the Need Convenience banner, to Sobeys is a viable strategy, but still has to be decided, the vice president said.
The company in 2013 launched IGA Express, another c-store initiative. IGA Express sites average 3,500-4,000 square feet, about 10% the size of a regular IGA store—viewed then as one retail solution for time-constrained consumers. Around that time, Sobeys launched a basic iteration known as Sobeys Express, part of the linage that would lead to the creation of the new Sobeys express format.
Altogether, lessons taken from IGA Express, coupled with consumer feedback from research conducted in the Atlantic Canada region over the past year was used to create an updated Sobeys express pilot. The consumer research showed that customers were looking for more “better for you” food options to meet their on-the-go needs. Individuals who participated in the research also wanted a one-stop shop for food and fuel.
And thus, the new Sobeys express program was born. Now the focus is to ensure the success of the first Sobeys express store.
“We will continue to ask customers for their feedback on the format and what changes they would like to see,” Ryan said. “Following the opening of the (Antigonish) location we’ve made some tweaks to the format and offer, but overall customer feedback and sales have exceeded expectations.”
The layout of the 2,400-square-foot Sobeys express is more modern and spacious than any other c-store sites operated by Sobeys, which has lent to favorable reviews.
“(The store) is slightly larger and brighter than our current Needs Convenience stores with larger windows. The ceiling is open, making the space as a whole appear more open and inviting,” Ryan said. “The colors are brighter inside and the increase in the square footage allows for more fresh zones.”
The new location carries items commonly found in a convenience store, including deli and bakery products, and produce. However, the c-store’s fresh zones are a primary component to what decision makers envisioned when they the c-store launched late last year. They are meant for healthy food offerings plentiful enough and diverse enough to distinguish Sobeys express from the competition.
“The new Sobeys express offer includes the traditional convenience items but also has a strong focus on the customer looking for a fresher alternative. The store offers a selection of 14 signature and all-butter croissant sandwiches, Sensations by Compliments (Sobeys’ private label) hot soups in three different sizes, and cookies and baguettes cooked fresh daily in-store. There are meal solutions such as cold chicken plates and rotisserie chicken made fresh in the local Sobeys store, and even sushi.”
The c-store is well-positioned to take advantage of Sobeys’ extensive supply and distribution channels. One interesting pairing includes Sobeys’ private label offerings, which range from fresh fish, ice cream and salads.
All are intended to appeal to health-conscious consumers and could be regular Sobeys express offerings down the road. For example, the retailer’s private-label fish is harvested by a small boat fleet using Marine Stewardship Council-certified practices. The fish is processed at a state-of-the-art coastal plant for swift, single-freeze processing to lock in freshness.
Sobeys also markets its own Simply Indulgent-brand ice cream, also sold under the Sensations by Compliments flag. Sobeys touts that all Sensations by Compliments products are free of artificial flavors and colors.
In addition the retailer sells salad kits come in a variety of flavors, prewashed and ready-to-eat.
All the offerings fit into the Sobeys’ mission to bring better food to Canadians, reflective of the company’s slogan, ‘Eat Better, Feel Better and Do Better.’
“Sobeys express targets the needs of the on-the-go
customer and provides this customer with the opportunity to purchase quick, better tasting, healthy meal options alongside the traditional convenience store offer,” Ryan said. “The branding attracts Sobeys customers and builds on the value loop for customers between Sobeys and Sobeys express.”
Ryan explained that the company’s relationships with area vendors have accentuated the c-store’s message of fresh fare even further.
“We are proud to support local suppliers and have sourced many items to carry in-store such as handmade chocolates and local cheese,” Ryan said.
To engage more c-store customers, Sobeys express has partnered with Loyalty One Inc. to offer customers AIR MILES reward miles, as part of a unique loyalty program. For every $20 in qualifying purchases, customers receive one AIR MILE.
Customers receive one AIR MILES Reward Mile for every $20 spent cumulatively on qualifying purchases at Sobeys, Foodland, Needs, Lawtons Drugs, Sobeys express and participating co-op stores in Atlantic Canada.
Shell is also a partner with AIR MILES which means that Sobeys express rewards customers with all of their Sobeys express purchases, both in-store and at the pump.
Targeting travelers, Sobeys express also offers a meal deal featuring a sandwich, drink and snack, and rewards customers with two cents off per liter on any subsequent fuel purchase at all of the company’s Fast Fuel and Shell locations across the Atlantic Canada region.