‘Aggressive’ cost-cutting plan to revive sagging Sobeys chain

STELLARTON, N. S. — Empire Co. Ltd. has launched a $500-million cost-cutting plan to turn around its Sobeys grocery business, which has been struggling to recover from missteps taken with the acquisition of Safeway Canada four years ago.

The company says it’s aiming to hit its target by the end of its 2020 fiscal year, adding that the savings will come from a combination of measures including reductions to office staff.

Chief executive officer Michael Medline says he has an “aggressive goal” to overhaul Sobeys so that it becomes a leaner organization.

Medline, a former Canadian Tire executive, has made no secret of his desire to streamline Sobeys and change how it operates since he joined the company in January.

The supermarket operator also announced changes in its upper ranks that include the retirement of executive vice-president François Vimard, who served as interim CEO before Medline arrived, and Sobeys Quebec president Yves Laverdière.

The president of the AtlanticOntario business unit for Sobeys, Beth Newlands Campbell, will also leave next month after 18 months with the company.

Empire says the job cuts won’t affect front line store workers, nor staff at distribution centres.

“We have an aggressive goal to transform our organization, better serve our customers, empower our employees and assuredly move from defence to offence in the market,” Medline said Thursday in a statement.

Headquartered in Stellarton, N.S., Empire and its affiliates and subsidiaries employ about 125,000 people.

Sobeys owns or franchises about 1,500 stores operating under the Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods and Lawston’s Drug Stores brands.