Save-On-Foods is doubling its footprint on Vancouver Island with parent company Overwaitea Food Group buying seven Safeway locations and one Thrifty Foods store from Sobeys.
Included in the two sales worth a combined $430 million, Stellarton, N.S.-based Sobeys has sold all four of its Safeway locations in Greater Victoria — University Heights, Sidney, Tillicum Centre, and Fort and Foul Bay — Safeway locations in Port Alberni, Ladysmith and Duncan, and a Thrifty Foods on the Island Highway in Nanaimo.
Overwaitea president Darrell Jones noted the company is expanding on well-established home ground — it opened its first Island store in Nanaimo in 1918. “And clearly this helps with distribution. Along with the other [stores] on the Island it will help us streamline and help with our freight and logistics, but the big win is these are great stores in great markets,” he said. “We believe we are a great fit for the communities.”
Jones said Overwaitea was approached by Sobeys with a package of locations last year and parts of the deal were too good to pass up. “When three stores in Victoria and one in Sidney come open, that’s very attractive for a local company that operates in B.C., not to mention … they are well-run supermarkets with great people in them,” he said. “Rarely do you get great stores in a great city with great people, that’s unusual in any business.”
Jones said all current employees — Overwaitea will add 1,500 to its roster after the sale is final — will be offered positions.
“We are retaining everybody, store managers, everyone. If they wish to remain we will be pleased to have them,” he said.
In all, Sobeys is selling 29 stores — 15 to Overwaitea and another 14 to Federated Co-operatives Ltd. — which more than fulfils a Competition Bureau requirement. Sobeys was required to divest 23 locations in Western Canada to satisfy the bureau and to finalize its $5.8-billion purchase of 213 Canada Safeway locations last year.
The Competition Bureau said it was concerned about the lessening of competition with Sobeys’ purchase of Safeway. Sobeys already owned grocery brands Thrifty Foods, Sobeys, IGA, Foodland, FreshCo and Price Chopper.
When asked why Sobeys added stores that were not originally on the market to the deal with Overwaitea, Andrew Walker, Sobeys’ senior vice-president of communications, said it suited both firms.
“It was about creating a package that made sense for both Sobeys and Overwaitea and maximized the value of the transaction for both parties,” he said.
Walker confirmed the Safeway that Sobeys owns in Courtenay will close in May due to its financial performance. He said the closing, which may affect as many as 120 employees, is unrelated to the sales announced Thursday.
Overwaitea has agreed to purchase the following 15 store locations:
- Safeway 2345 Beacon Avenue, Sidney, BC
- Safeway 1950 Foul Bay Road, Victoria, BC
- Safeway 3958 Shelbourne Street, Victoria, BC
- Safeway 1143 – 56 Street, Tsawwassen, BC
- Safeway 131 Signal Road, Fort McMurray, AB
- Sobeys 1000 Railway Avenue, Canmore, AB
- Sobeys 65 Bow Street, Cochrane, AB
- Thrifty Foods 270 East Columbia Street, New Westminster, BC
- Safeway* 3756 – 10 Avenue, Port Alberni, BC
- Safeway* 610 – 6th Street, New Westminster, BC
- Safeway* 181 Trans-Canada Highway, Duncan, BC
- Safeway* 108 – 3170 Tillicum Road, Victoria, BC
- Safeway* 370 Trans-Canada Highway, Ladysmith, BC
- Thrifty Foods* 18888 North Parallel Road, Abbotsford, BC
- Thrifty Foods* 2000 Island Highway, Nanaimo, BC
* Additional stores not included in original agreement with Competition Bureau
Co-op has agreed to purchase the following 14 store locations:
- Safeway 1441 Main Street, Winnipeg, MB
- Safeway 77 Vermillion Road, Winnipeg, MB
- Safeway 850 Dakota Street, Winnipeg, MB
- Safeway 1120 Grant Avenue, Winnipeg, MB
- Safeway 2331 – 66 Street NW, Edmonton, AB
- Safeway 3801 Albert Street, Regina, SK
- Safeway 3310 – 8 Street East, Saskatoon, SK
- Safeway 4926 – 46 Avenue, Taber, AB
- Sobeys 10004 – 99 Avenue, Fort Saskatchewan, AB
- Sobeys 5421 – 50 Street, Leduc, AB
- Sobeys 4703 – 50 Street, Wetaskiwin, AB
- Sobeys 18370 Lessard Road, Edmonton, AB
- Sobeys 5036 – 106 Avenue NW, Edmonton, AB
- IGA 6204 – 90 Avenue NW, Edmonton, AB