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With its new FreshCo banner, Sobeys claims to have reinvented the discount format. Don't believe it. The real plan is much more interesting, and lucrative Ibyandyholloway
Few would deny that Sobeys Inc's Price Chopper discount chain needed a facelift, especially in Ontario, where the low end of the grocery market is the most competitive in the country. But the May switchover of eight Toronto-area Price Choppers to a new banner, FreshCo, and plans to convert dozens more in Ontario-as well as build new stores-comes with more than just a paint job, according to company execs. They say it's a brand new way of doing discount.
Not quite. Despite the hoopla about "discount done right" and the "Fresher. Cheaper" tag line, the ultimate goal with FreshCo is to entice immigrant Canadians into a more traditional supermarket-something Canada's major grocery chains have never quite pulled off. FreshCo is "really going after the ethnic market with a little bit of a different offer than just low prices," observes Mark Vandenbosch, marketing professor at the University of Western Ontario's Richard Ivey School of Business. "It's a fresh store with less frills, but I wouldn't call it a discount store. The name says a lot."
To that point, FreshCo outlets feature a row of fresh produce that appeals to the ethnic clientele; four to eight feet of halal meats; South Asian sweet goods and breads sourced from local bakeries; and an aisle of international foods conveniently divided into categories such as Asian, West Indian, Middle Eastern and eastern European.
Just as important, FreshCo almost forces consumers to notice the changes. Upon entering the store, shoppers are steered around the produce, meat and bakery departments, then into an aisle of all international foods. Other grocers may have just as many packaged international foods, but they're usually buried in the middle of the store and poorly signed. "We've put [the international foods] uniquely...