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PwC Up front | Issue 5 | Harnessing technology

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Up front Summer 2014 33 Food for thought Under President and CEO Marc Poulin, Sobeys is confronting competition in the grocery business by giving Canadians healthier choices By Chris Atchison It's a daunting task for any chief executive: finding innovative ways to compete with rivals and differentiate their brand by providing a better product or service. Just ask Marc Poulin, President and CEO of Canadian grocery giant Sobeys Inc. and its parent, Empire Co. Ltd. In his business, price wars between major retailers are fierce, profit margins are razor-thin, and keeping the in-store experience current is a costly and creatively demanding job dictated by fast-changing consumer tastes. For Poulin – a food retail veteran who took charge of Sobeys in 2012 and has held other senior positions with the likes of Provigo Distribution and the Oshawa Group – those challenges are nothing new. But in recent years, the grocery war has seen retail square footage grow at more than double historical norms across some regions. Stiffer competition among domestic grocers such as Loblaw Cos. Ltd. and Metro Inc., as well as U.S.-based discount retailers such as Costco Wholesale Corp., Wal-Mart Stores Inc. and new player Target Corp., has battered companies' bottom lines and share prices. "The industry is at a stage where it's redefining itself because new entrants create quite a bit of square footage, but we're also facing something new: aging consumers who tend not to buy as much food," says Poulin, who joined Sobeys in 1998 when it bought the Oshawa Group, where he was Vice President, Grocery Merchandising. "It's going to be a challenging market in the next few years." To maintain its status as the country's second-largest grocer, Sobeys – which operates under several retail banners and posted sales of $17.3-billion for the 2013 fiscal year – needed to retool. Poulin understood that staying price-competitive would be critical to his organization's success. So too would securing the chain's grip on a key demographic: Canadians who want a high-quality, full-service grocery experience. Poulin took it a step further, though. About two years ago, he and his team asked how Stellarton, N.S.-based Sobeys could continue selling great products but also make a tangible difference in customers' lives. In an era of fast food, diminished cooking skills and the demise of the family meal, Poulin envisioned transforming Canadians' fundamental relationship with food. His goal was to help combat obesity and give consumers healthier meal options, while also establishing a critical point of brand differentiation. The strategic direction was set. Sobeys' stores would promote better meal planning using fresh foods and hand-picked ingredients. The rallying cry: Better Food for All. "We want to bring food back to the centre of Canadians' lives, but in a different way, as an ingredient in a healthy lifestyle," Poulin explains. "We have to … [help] Canadians in their meal preparation. We'll make it easy so you can adopt a lifestyle where you take control of your food experience, then teach you about new experiences around food." The leaders Up front Summer 2014 33 MATTHEW PLEXMAN

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