The Canadian Retail Landscape

Within the last couple months, there has been a couple announcements that may drastically change the Canadian grocery and drugstore retail landscape.

We heard some time ago that “Empire” (owner of the “Empire Theaters” chain), the parent company of Canadian grocery chain Sobeys,  is purchasing all of Canada Safeway‘s holdings. And just today it was announced that Loblaws (Superstore, Extra Foods and a handful of other chains)  is planing on purchasing Shoppers Drug Mart.

The Sobeys -Safeway acquisition made sense on a corporate level, being it gave Sobeys (strong in the eastern Canadian market) a a stronger foothold in the western Canadian  market (Safeway is stronger in the west). And it seems smart for Labaws to absorb a competitor, into its own company (a good way to help compete with the ever growing wal mart, and newly opened Target).

But though it is good for the CORPORATE balance sheet, this does not always translate as good for Canadians in general.

For starters, it seems Sobeys is keeping the Safeway brand alive, at least for the time being. So outside of a few stores (such as one older Safeway in my city, located across the road from a Sobeys ), most jobs from both stores should be safe (for now). However, the same may not be true for workers at any of Safeway’s distribution facilities around the  country (Sobeys has plans to merge the 2 distribution chains into one). And in the long term, even if Sobey’s shutters the Safeway brand, most of the stores will likley be just transitioned into Sobey’s stores.

When it comes to the Lablaw’s acquisition of Shoppers Drug Mart, I can’t say I see much changing there. Depending on the distribution system utilized by Shoppers, again, some jobs may be lost as Lablaw combines them into there network. And we may see familiar names like “President’s Choice” and “No Name” replace Shoppers generic food brands (I can’t see there brands as having as strong a loyalty base as Safeway’s brands). While some stores may be shuttered due to proximity to current Loblaw‘s locations, I don’t see things changing much.

But from a consumer prospective, this may not be a good thing either. Canada’s biggest food retailer companies are now Sobeys (Empire), Walmart, and Lablaws (Target from what I understand, sources Sobey’s distribution for its food products). In an already tight market, less competition is not always a good thing.

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