Sobeys announces 800 layoffs

Photo: Andrew Vaughan, The canadian Press
The company must juggle, for several years, with the problems that have followed its acquisition of Safeway Canada.

The Sobeys supermarket chain announced on Friday the abolition of some 800 jobs, or about 20 % of its office staff across Canada, in the framework of a plan to consolidate five regional organizations into a single national organization more efficient.

 

“The future success of Sobeys and our service supported more than 900 communities across the country depend on our unwavering commitment to the transformation of our business,” said the chief executive officer of Sobeys and its parent company, Empire. The information about layoffs began to filter out late Thursday, following an announcement by the internal staff of Sobeys. The company has confirmed the information on Friday morning.

 

In addition to the banner of the same name, Sobeys operates such brands as IGA, Safeway, FreshCo, Marchés Tradition and Rachelle-Bery. Sobeys is the second largest chain of food retailers after Loblaw, and she must face a number of challenges unique to this industry : the competition of new rivals, rising costs due to growth in minimum wages and changes in technology.

 

However, the company must also juggle, for several years, with the problems that have followed its acquisition of Safeway Canada, which has enabled Sobeys to achieve a much better presence in Western canada.

 

Transformation Plan

 

“The first phase of the transformation plan of our activities, which focused on the refurbishment of the foundation of Sobeys and the creation of a new organizational structure is now substantially complete,” said Mr. Medline in a statement to the media. “This will allow us to be more efficient in several ways and be more flexible in the face of new opportunities to compete and win the loyalty of the Canadians. “

 

In September, Empire indicated that it was on track to achieve annual savings of $ 500 million in three years thanks to its transformation plan called ” project Sunrise “. The company has also indicated that the sales of the stores from Sobeys, open for at least a year rose in the first quarter of fiscal year 2018 — for the first time in 18 months.

 

Among the main difficulties faced by the major grocers in canada including Loblaw, Sobeys and Metro, is the increased presence of Amazon.com in the retail sector for food, because of its recent acquisition of the american chain Whole Foods. Even if Whole Foods has only a few stores in Canada, the grocers of the country are at work to improve their efficiency and defend against the arrival of the giant of e-commerce in the sector of physical stores to complement its online presence.

 

In addition, Sobeys and its canadian rivals, have said they expect an increase in cost of labor due to the increase in the minimum wage in Ontario — the largest provincial economy in the country — and the rising costs of food.

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