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Sobeys is launching a new loyalty program – what that means for you and Air Miles

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·4 min read
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A general view of a Sobeys logo and store in South Edmonton. 
On Wednesday, 24 August 2021, in Edmonton, Alberta, Canada. (Photo by Artur Widak/NurPhoto via Getty Images)
Sobeys parent company is becoming a co-owner of the Scene+ loyalty program. (Photo by Artur Widak/NurPhoto via Getty Images)

The parent company of the Sobey's grocery chain is launching a new loyalty program, joining Bank of Nova Scotia and Cineplex as co-owner of Scene+ program.

Empire Co. (EMP-A.TO), which owns several grocery brands including Sobeys, Safeway, Foodland, IGA and Freshco, announced on Tuesday that it is now a co-owner of Scene+ and will launch a new loyalty program tied to the brand.

"Evolving our loyalty offering is one of the final building blocks of our transformation strategy at Empire," president and chief executive officer Michael Medline said in a statement.

"Coupling Scene+ with the investments we've made in technology, data and personalization will push the customer experience in our stores to new heights."

How will the Scene+ program work?

Empire said the Scene+ program has more than 10 million members. Current Scene+ customers can rack up points when purchasing movie tickets from Cineplex, meals from Recipe Unlimited Corp. restaurants like Swiss Chalet and Harvey's, and when banking through Bank of Nova Scotia. The points can be redeemed for purchases made with these businesses and others.

The Scene+ program will launch in Atlantic Canada in August and will finish rolling out across the rest of the country by early 2023, the company said. It will be available at most of its banners, including Sobeys, Safeway, Foodland, FreshCo, Voilà by Sobeys/Safeway/IGA, Needs, Thrifty Foods, Les Marchés Tradition, Rachelle Bery, Lawtons Drugs, as well as its liquor stores in Western Canada. However, the program will not be available at Farm Boy or Longo's.

"We're always looking at new opportunities to help evolve and expand (the) offering, so they aren't a part of the current rollout plan, but we'll make some considerations for the future," said Jacquelin Weatherbee, Empire's vice president of communications and corporate affairs.

The launch of Scene+ means Empire is ditching Air Miles, the rewards program of which it is currently a client. Empire said customers will still be able to earn and redeem Air Miles in its stores until the Scene+ program is launched in their region.

What does this mean for Air Miles?

Air Miles parent company Loyalty Ventures Inc. (LYLT) released a statement on Wednesday about the Empire change, saying it and Sobeys were "unable to align on extension terms." Chief executive officer Charles Horn pointed to Air Miles' existing partnership with grocery chain and Empire's competitor Metro Inc. (MRU.TO), and said it is in "active discussions" with new retailers.

"Air Miles will have the ability to expand into adjacent verticals, including mass merchants, convenience stores, dollar stores and other retailers that were previously precluded by the terms of the Sobeys contract," Horn said.

"We are in active discussions with grocers as well as those verticals that have been previously unavailable to us.”

Sobeys represented about 10 per cent of the company's adjusted earnings before interest, taxes, depreciation and amortization, Air Miles said. The company's stock fell as much as 59 per cent the day after Empire announced it would switch to Scene+.

Empire's change over to Scene+ is a major blow to Air Miles, says Patrick Sojka, the founder of RewardsCanada.ca, a website that tracks Canadian loyalty programs and credit card rewards.

"This is one more proverbial nail in the coffin for Air Miles," he said, adding that while he believes the program will survive, the loss makes it more challenging to compete in an increasingly competitive space.

"Over the last few years they've lost several major partners... and now with the loss of Sobeys, Safeway and the other Empire stores, they have a very limited partner base that's nationwide and that people use on a day-to-day basis."

Loyalty competition heats up

Sojka said the addition of Empire's coast-to-coast brands will make Scene+ a more prominent program in the highly competitive Canadian loyalty space.

"They're becoming what they aspired to be years ago – a new partner that could compete with the likes of Air Miles, Aeroplan and PC Optimum," he said.

Scene+ president Tracey Pearce said the brand plans on expanding the program offering going forward.

"Scene+ intends to add select high-profile consumer and retail brands to the program to make the offers, collection opportunities and overall Scene+ member experience even more exciting for Canadians," she said in a statement.

Loblaw (L.TO) has long operated its own loyalty program, PC Optimum, that can be used at its grocery stores and pharmacies, while Metro has its own program in Quebec, uses Air Miles in Ontario and Thunder Bucks in Thunder Bay.

With files from the Canadian Press

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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