How Farm Boy is spearheading Sobeys’ urban push

Date : 31 July 2020

Sobeys is converting a further three existing stores to the Farm Boy format, underlining the strength of this format in high density areas.

Doubling the network

Sobeys acquired Farm Boy at the end of 2018, in a deal designed to help the retailer drive its penetration in urban locations. At the point of acquisition, Farm Boy operated 26 stores in Ontario, with the company announcing plans to double the business over a five-year period. Currently, there are 31 stores trading, with a further 12 locations announced. In total, Farm Boy is in different stages of development on more than 25 stores. This includes a mix of new builds and conversions, ranging from 12,000 sq ft to 38,000 sq ft.

Source: IGD Research

Potential to convert additional Urban Fresh locations

The latest stores to be converted are in downtown Toronto, Oakville and Ottawa, currently operating under the Sobeys and Sobeys Urban Fresh banners. With the planned closure of another Urban Fresh location and the conversion last year of a site to the Farm Boy format, the Urban Fresh network will be down to seven stores. The company is likely assessing the opportunity to convert additional sites to the Farm Boy format.

Source: IGD Research

Unique format in the Canadian market

Described as a hybrid of Trader Joe’s and Whole Foods Market, it has carved out a niche positioning in the Canadian market, building a compelling brand which has resonated with consumers. Around 70% of the store space at Farm Boy is dedicated to fresh and prepared foods, with an emphasis on natural, organics, speciality and healthier products.

A key point of difference for Farm Boy is its prepared foods offer. Operated as the Farm Boy Kitchen, this typically offers hot food counters, fresh salad bars, sushi and pizza. This enables the retailer to capture consumers on food-to-go and food-for now missions. This approach, and the contrast with the existing portfolio, enables Sobeys to attract new customer groups.

Source: IGD Research

Expanding beyond Ontario

The success which the retailer continues to see with the Farm Boy format suggests that it could work beyond Ontario. Sobeys does not have a dedicated urban format beyond the province, relying mainly on its Sobeys, Safeway and IGA larger format supermarkets nationally. While the retailer will want to take a measured approach with expansion, to retain what is unique about the format and business culture, there could be a significant opportunity to exploit in major cities such as Vancouver, Calgary and Montreal.

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