Preparing for aftershocks from Safeway’s fall

Posted by on March 23, 2014 in Recent Posts | 0 comments

Preparing for aftershocks from Safeway’s fall

February 18, 2014
By Drew A. Penner
Echo Staff

 

The Comox Valley is bracing for anticipated ricochet effects from the planned May 10 closure of Safeway in Courteany, affecting 120 full and part-time employees.

Remembering a time when the store was the largest grocer in the Comox Valley, Courtenay Mayor Larry Jangula said the business would be missed.

“They were always a big part of the Valley,” he said. “The sad thing is we’re talking about the livelihoods of up to 120 families.”

On Thursday Canada Safeway announced the location was not financially up to snuff and would be closed, following a regular review of operations.

The same day the Jim Pattison Group-owned Overwaitea Food Group said it would scoop up 15 grocery stores in B.C. and Alberta from Sobeys Inc., which recently acquired Safeway in a $5.8-billion deal last June.

Courtenay’s Safeway location was not one of these stores.

John Graham, director of public affairs with Safeway Operations said the company has been pondering the move for months.

“It’s a store that we’d been monitoring well before the acquisition by Sobeys,” he said. “In recent years it’s struggled to meet financial targets.”

In the grocery sector prices have not kept up with inflation in recent months and a confidential document emerged in December from deep within Sobeys’ executive chambers revealing it was planning to leverage its new heft thanks to the Safeway buy to put further pressure on food suppliers.

While Graham wouldn’t comment on the letter to suppliers from Dale MacDonald, senior vice-president of category management and national procurement at Sobeys, he acknowledged the challenges Safeway has faced in battling it out in an increasingly crowded marketplace.

“We’re no stranger to competition in any market,” he said. “I think you’re seeing – not only in Courtenay but across Canada – more US competitors entering the Canadian marketplace and Canadian players looking to expand their business.”

Jangula said we’ll just have to wait and see what the ultimate impact is on the Comox Valley.

“It opens up a whole kettle of worms for everybody,” he said, adding he hopes workers will be able to find other employment relatively easily. “Some of them will find it difficult to pay property taxes on their own bills.”

No one likes more bad news, in the wake of the about 20 downtown store closures in the last year.

“It’s concerning,” he said, “as is all the economic bad news we’ve heard from downtown.”

Mark Middleton, president Downtown Courtenay Business Improvement Association, said the closure will hurt area businesses.

“That’s going to trickle down into less money spent at restaurants, pubs, and sporting good stores until these people get back on their feet somewhere else,” he said, adding the Safeway jobs had the advantage of not paying minimum wage. “They were some of the better paying jobs in that sector.”

Middleton said the BIA is waiting to hear from Thrifty Foods, which is also owned by Sobeys and could be pondering a move to the current Safeway location, following the shut-down.

Sobeys reps declined to comment on whether such a move is in the cards.

“If the ripple effect of that is Thrifty moving and affecting the BIA, then yes, we’ve got an issue,” Middleton said, noting the foot traffic attracted to the core by the downtown grocer has significant economic benefits for the area. “I hope they find another tenant.”

Maryanne Palmer gets up early to begin her 5 a.m. shift as a grocery stocker at Safeway. At least that’s what she used to do when there was more work to go around.

“There are no hours, you know?” she said. “Since Walmart went in it’s been pretty quiet.”

Thursday’s big announcement didn’t exactly come out of nowhere.

“I was surprised but on the other hand I wasn’t, because it’s just been so dead in there,” she said. “Except for around suppertime.”

Now she’s facing the prospect of applying for jobs sought after by her fellow employees.

But she knows the bigger impact could be felt at the Comox Valley Food Bank where she volunteers. Every day the non-profit organization receives about 60 boxes of apples, oranges, potatoes, lettuce, dairy and other items from Safeway, allowing around 150 of the Valley’s most vulnerable residents to get important nutrient rich food five days a week.

“Instead of throwing it away they pass it on to the food bank,” said Comox Valley Food Bank Society president Jeff Hampton. “If we lose this fresh produce connection it may have an affect on us being able to be open.”

Other stores do pitch in as well, but they mostly just provide bread and milk, said food bank manager Susan Somerset.

“We’ve tried and it’s really tough to get the produce,” she said. “We’re going to have to beg.”

Already the food bank tells residents to try to come for veggies and dairy once a week, so there’s enough to go around. Now the organization is looking at different options for dealing with the loss of the supplier, including purchasing canned vegetables – which would be at an added cost.

“It’s going to make a huge impact,” Somerset said. “I don’t know what we’ll do.”

View original story here.

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