Sobeys Inc. is focused on shaving costs to win a tough food fight, with plans to consolidate manufacturing and distribution operations, cut jobs in two regional offices and force suppliers to retroactively reduce their prices.
Marc Poulin, chief executive of Sobeys, spoke publicly for the first time on Thursday about its controversial initiative to retroactively cut vendors’ prices by 1 per cent. The company also is accepting no supplier increases in 2014, with some exceptions. The moves are aimed at helping the retailer generate some of the savings it promised from its $5.8-billion acquisition of rival Safeway Canada.
“Discussions with our suppliers are ongoing – we are pleased with what we’re seeing so far,” Mr. Poulin told analysts after parent Empire Co. Ltd. released disappointing third-quarter results. “Suppliers are realizing that we have a lot to offer in terms of partnering with them to drive our mutual business.”
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