Sobeys to sell 3 Safeway stores in Greater Victoria because of competition concerns

Three Safeway locations in Greater Victoria — including the recently renovated store at Fort and Foul Bay — are among 23 grocery stores Sobeys Inc. must sell before it can complete its $5.8 billion purchase of Canada Safeway and stay in the good books of the federal Competition Bureau.

Safeway locations at 1950 Foul Bay Rd., 3958 Shelbourne St. at University Heights and 2345 Beacon Ave. in Sidney, all of which were among the 213 stores Sobeys purchased, are for sale. The 23 stores Sobeys must sell are in Western Canada. Five are in B.C.: three Safeways in Greater Victoria, one in Tsawwassen and a Thrifty Foods in New Westminster.

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The Safeway at Tillicum Centre is not on the sale list.

Sobeys also owns Thrifty Foods, which has a big presence in Greater Victoria.

The Competition Bureau said it was concerned about the lessening of competition with Sobeys’ purchase of Safeway, but the selling of the 23 stores would resolve its concerns.

Safeway locations to be sold

Sobeys spokesman Andrew Walker said the need to sell was expected.

“You go into a process like this with an acquisition of this size knowing there is a possibility you will have to divest stores. This is reasonably consistent with what we expected in terms of the number of stores and the overall economics of asset disposition,” he said.

Negotiation determined which stores would be sold. “The Competition Bureau identified certain local markets of concern. We made proposals to address those concerns, then there was a dialogue and the consent agreement was the result of that process,” Walker said.

The stores cannot be closed and must be sold as working grocery stores.

“The whole point is to have an operating grocery store in the market,” he said. “If we lose a competitor in that market, competition will suffer for consumers.”

While he would not divulge dates, Walker said a timeline was imposed to sell the stores.

“We want to address this as quickly as we can.”

He expects plenty of interest. “These are great stores with great employees.”

There could be several potential buyers for the Greater Victoria stores, including Jim Pattison’s grocery banners such as Save On Foods. Quality Foods might be interested; the Island chain is penetrating the Greater Victoria market next year with a store in the former Ashley Furniture outlet in Langford. Local chains such as Fairway Market, Country Grocer and Tru Value might also show interest.

The stores being put up for sale in Western Canada by Sobeys are under various labels — Safeway, Thrifty Foods, Sobeys, IGA and Price Chopper.

“I am confident this agreement will ensure that Canadian consumers continue to benefit from competitive prices for a wide selection of grocery products,” Competition Commissioner John Pecman said in a statement Tuesday.

Nova Scotia-based Sobeys, owned by Empire Co., purchased 213 stores under its agreement with Safeway, including 199 in-store pharmacies and 62 gas stations.

The acquisition marks one of the larger recent transactions by a Canadian grocer, as consolidation sweeps the industry amid the entry and expansion of several American retail giants.

— with a file from The Canadian Press


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