Canada markets closed

Sobeys closure called disappointing by consultant

Sobeys has announced that it is closing its store in downtown Edmonton on July 31

A consultant who helped Sobeys develop the “urban fresh” concept  says that the downtown Edmonton store was built on the idea that nearby condo dwellers would walk to buy their groceries.

“I think our expectation was that as the condos came up and parking downtown would disappear that people would end up getting rid of their cars,” retail consultant Darren Vanstone said.

“And it would become more a traditional urban area where people would walk so they would be doing most if not all of their shopping in that one location.”

On Wednesday, employees were told the Jasper and 104th Street store would be closing July 31. The location is one of 50 underperforming stores the grocery chain is closing this year.

Vanstone lives in Toronto but grew up in Edmonton. He calls the closure sad for employees and disappointing for downtown residents.

While some people have wondered what the Sobeys’ closure says about downtown development, the competitive Canadian grocery business may be more to blame.

Margins for a typical grocery store are only about one to three per cent, Vanstone said. The location may have been too small for Sobeys to make a go of it.

“The expenses are going to be a lot higher than they would in a suburban store but you just aren’t able to get the same number of people through, and they’re actually purchasing less than they would out in a suburban store,” he said.

Earth’s General Store will be opening next month further up 104th Street, in the former Pangea Market location.

Vanstone says Sobeys’ failure doesn’t mean the local venture is doomed. He says grocery chains create expectations of uniformity and conformity that local businesses don’t face.