Sobeys takes Chalo! FreshCo to western Canada

Stewart Samuel
Program Director - Canada
@RetailAnalysis

Date : 19 July 2019

Sobeys has launched two discount stores under the Chalo! FreshCo banner and format as part of its plans to develop and grow a discount business in western Canada.

Planning to convert a quarter of its existing supermarkets

Sobeys opened its first FreshCo format in western Canada in April, with seven stores currently trading. A further 11 stores have been announced as part of the first wave of openings. These form part of its plans to convert around a quarter of its underperforming Safeway and Sobeys stores in the region over a five-year period.

Source: IGD Research

The stores have opened with a strong price proposition, drawing new price and value-led activities from its two main competitors, Loblaw and Walmart.

Source: IGD Research

Tailored to the needs of South Asian communities

Sobeys first launched the Chalo! FreshCo format in Toronto in 2016, developing a concept that is tailored to meet the needs of South Asian communities. Chalo means “let’s go” in Hindi and Punjabi. Prior to these new stores, which are in Surrey, BC, the retailer had opened four stores under this format in the Greater Toronto Area. The stores offer the conventional FreshCo range, supplemented with an expanded South Asian assortment. The new stores have also partnered with two local businesses for halal, meat and seafood ranges; TaQwa Halal Foods and Fraserview Meats and Seafood.

Source: IGD Research

Unique aspects

From the external and internal branding, to the graphics and merchandising, the format takes many design cues from grocery stores in South Asia. The use of colour, graphics and messaging creates a fun and inviting environment which will have appeal beyond its core target group.

Source: IGD Research

In order to build credibility with the South Asian shopper the retailer has built deep ranges across all major categories. ‘A Rice & Flour’ feature wall enables the store to offer significant choice in each of the categories. The retailer has also bolstered its range of cookware, which is often gifted within South Asian communities.

Source: IGD Research

The opportunity

The ethnic market represents one of the largest growth opportunities for retailers in Canada. By 2031, it is forecast that 1 in 3 Canadians will be from a visible minority. The major food retailers have adopted a range of strategies to capture this opportunity including acquisitions, joint ventures with ethnic specialists and internal concept development such as Chalo! FreshCo. This format will be suited to several catchments in western Canada which have a high proportion of South Asian consumers, helping Sobeys to create a key point of difference versus its discount competitors. 

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