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UPDATE: Local grocer eyes Victoria Safeway locations in wake of sale order
The owners of Market on Yates and Market on Millstream are eyeing the three Safeway locations in Greater Victoria that the Canadian Competition Bureau has ordered Sobeys to sell.
In a move to maintain healthy competition among large grocery outlets in Western Canada, the Competition Bureau has ordered Sobeys to sell 23 Safeway locations, including the long-standing grocers at University Heights mall and at Fort and Foul Bay Road, and the store in Sidney.
In June, Sobeys, which operates Thrifty Foods in Victoria, announced it was buying the 213 grocery stores, 10 liquor stores, four distribution centres and 12 manufacturing centres that make up Canada Safeway, in a $5.8-billion deal.
Darryl Hein, co-owner and retail operation manager of The Market stores, said his company is interested in purchasing one, two or all three of the Safeway locations.
“We would certainly be interested in taking a look at them,” Hein said. “I personally think this will be a quick sale. I would be surprised if this dragged on very long.”
Hein expected the Competition Bureau to order Sobeys to sell Safeway locations, but he was surprised about the Fort and Foul Bay store. “It’s the only grocery store there. It’s probably the busiest of the three.”
Russ Benwell, co-owner of Red Barn Market, said his company would be eager to open a new location at Fort and Foul Bay, but the size of the Safeway building is too large for their format.
“This will change the landscape of groceries in Victoria yet again,” he said. “This could open it up to other retailers to move into that space ... banners that Victoria has never seen.”
Other potential large grocers that could move into the space aren’t showing their cards.
Jim Pattison, CEO of Jim Pattison Group which owns Overwaitea Food Group (and Save-on-Foods in Victoria) would not comment on the sale or if he has any interest in acquiring some or all of the stores.
“Those kind of things we don’t talk about because we are a private company,” Pattison told the News. “We were not surprised that some Safeway stores have to be sold.”
A spokesperson for Loblaws, which owns Superstore, declined to comment.
Fairway Market said its not interested in purchasing any of the three Safeway stores in Greater Victoria.
“Unfortunately we have locations in those areas so we cannot take advantage of that,” said Fairway Market spokesman Robert Jay.
“We were thinking about it ourselves here in the office, trying to figure out who would buy (the stores),” Jay said. “Would it be one company buying all 23, which would be better than making a deal with five, six or seven different businesses? It would be easier to sell all 23 at one time.”
Sobeys operates nine Thrifty Foods stores in Greater Victoria and Safeway has four centres. Safeway has been a common sight across Victoria for decades, but under the deal, only the Tillicum Centre store will survive under the Safeway brand.
Andrew Walker, vice-president of communications for Sobeys, stressed the Safeways must be sold as fully functioning grocery stores and can’t be shut down. Purchasers will also have to honour employees’ collective agreements.
“We will be focused on selling the assets in a timely manner. We don’t expect any problem – these are great stores at great locations with great employees. Potential purchasers will see that,” Walker said on Tuesday. “They have to be sold as groceries. They won’t be Safeway but they will be groceries.”
In a decision released Wednesday, the Competition Board determined Sobeys purchase would "likely result in a substantial lessening or prevention of competition" in retail grocery stores in areas of Western Canada.
“I am confident this agreement will ensure that Canadian consumers continue to benefit from competitive prices for a wide selection of grocery products,” said John Pecman, commissioner of Competition.
“We are delighted to have received regulatory clearance from the Competition Bureau,” Marc Poulin, president and CEO, Sobeys Inc. said in release. “Our focus now turns to closing the deal, which we expect to do in early November, and beginning to serve our customers in Western Canada as one company.”
--with reporting from Christopher Sun