BUSINESS

Sobeys Job Cuts To Affect 800 As Grocery Chain Reorganizes

Canada's supermarkets are under pressure from new competition and technological change.

11/24/2017 08:53 EST | Updated 11/24/2017 09:14 EST
A Sobeys grocery store is seen in Halifax on Thursday, Sept. 11, 2014. The Sobeys grocery business will be cutting about 800 office jobs across Canada.

STELLARTON, N.S. — The Sobeys grocery business will be cutting about 800 office jobs across Canada as part of efforts to create one efficient national organization out of five regional operations, the company announced Friday.

"The future success of Sobeys, and our continued service to over 900 communities across the country, depends on our steadfast commitment to transform our business," said Michael Medline, who is chief executive of Sobeys and its parent company, Empire Co. Ltd. (TSX:EMP.B)

Local reports of the news began to emerge late Thursday ahead of an internal announcement to Sobeys staff. The company confirmed the reports Friday morning.

Earlier on HuffPost: Loblaw closing 22 stores, launching home delivery

Sobeys is Canada's second-largest grocery company, after Loblaw Cos. Ltd., and faces many of the same challenges in the industry: competition from new rivals, higher costs from rising minimum wages in some areas and technological change.

However, the company has also been struggling for several years with problems arising from its acquisition of Safeway Canada — which gave Sobeys a much bigger presence in Western Canada.

"The first phase of our plan to transform our business, which has been focused on resetting the foundation of Sobeys and creating a new organization structure, is now substantially complete," Medline said in a statement to the media.

"This will allow us to be more efficient in many ways and to be more agile as we pursue new opportunities to compete and win the loyalty of Canadians."

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In September, Empire reported that it was on track to achieve $500 million in annual cost savings from Project Sunrise.

It also reported that Sobeys had achieved same-store sales growth in the first quarter of its 2018 financial year. It was the first time in 18 months that Sobeys had reported higher year-over-year sales at stores open at least a year.

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