The company that owns the Sobeys and Canada Safeway brands is purging its grocery network of “underperforming” stores, with the Safeway in Red Deer’s Parkland Mall among the casualties.
Empire Company Ltd. announced on Thursday that it’s closing approximately 50 stores, with the majority of these in Western Canada. Keri Scobie, communications manager for Sobeys West, subsequently confirmed that the Parkland Mall Safeway is one of 15 Safeway and Sobeys stores in Alberta that are on the list.
Neither the Safeway store at 4408 Gaetz Ave. in Red Deer nor any of the Sobeys stores in Central Alberta are slated to close.
Scobie said Empire made its decisions on the basis of sales performance.
“They’re difficult decisions to make but when you look at your network and you want to optimize it and you want to grow and move forward, sometimes you have to make these tough decisions. At the end of the day, these stores all sort of fell into that category of underperforming and no longer financially viable.”
Scobie said staff at the affected stores were told about the closures on Wednesday. In most cases, no dates were given.
“We’ve committed to employees and our customers that in the next six to eight weeks we’ll be back to them with timelines, a date and sort of next steps forward.”
Scobie did confirm that the Parkland Mall Safeway will not close before fall.
Douglas O’Halloran, president of United Food & Commercial Workers Union local that represents Safeway employees in Alberta, said staff at the affected stores were in shock. The uncertain timelines for the closures made the situation even worse, he added.
“It just seems to add extra stress, extra turmoil to the situation.”
O’Halloran said employees at the Parkland Mall Safeway might have the right to bump less senior workers at the other Red Deer store.
“Depending upon your seniority, you may be able to bump into another store if you have the ability and the skills to do the job there.”
That leaves junior employees at both stores in a precarious position, he acknowledged.
“The chances of surviving are pretty slim.”
O’Halloran wasn’t sure of the staff count at the Parkland Mall Safeway, and Scobie said her company’s policy is not to disclose such information.
“In this instance, the net impact is really difficult to discuss because ideally we want to move people to positions in other stores,” she pointed out.
But transfers to Sobeys stores is not an option, said Scobie.
“At this point we still really do operate as separate companies.”
Empire acquired Canada Safeway a year ago in a $5.8-billion deal that included more than 200 Safeway stores and other properties. The Nova Scotia-based grocery giant subsequently sold 29 Safeway and Sobeys stores, partly in compliance with a directive from the Canadian Competition Bureau.
Parkland Mall general manager Dan Hachey said Thursday’s announcement was sad news, especially for Safeway employees at the shopping centre.
“Many of their staff have been here for a career.”
But Hachey downplayed the impact of the closure on Parkland Mall.
“This is prime retail space that they’re vacating, so long-term it’s not that terrible for us.”
In fact, he said, mall officials considered replacement tenants for Safeway after the Empire purchase, fearing that the Competition Bureau wouldn’t allow Empire to keep the store.
“We were already out testing the water for other larger format retailers that would look at the Safeway space and there was serious interest at that time.
“We’re confident, with that Gaetz-facing retail, that we’ll be able to make some announcements within the coming months.”
hrichards@www.reddeeradvocate.com