STELLARTON, Nova Scotia — Sobeys here said Tuesday it sees potential for its FreshCo discount format outside of Ontario but has no plans to expand the format beyond the single province at this time.
“We see real reason to be optimstic for more growth from FreshCo,” Bill McEwan, president and chief executive officer, told analysts. “We’re very pleased with the customer response and with the sales and margin trends, and now that we’ve cut through the very heavy conversion process and our concentration is back on the business, we expect to be able to turn sales leverage into margin improvements, which means good upside on the bottom line and continued growth on the top line.”
FreshCo is a format Sobeys unveiled in mid-2010 that includes an expanded selection of perishables at discount prices. The company operates 39 FreshCo stores, with plans to open three more during the fourth quarter, McEwan said. He made his remarks during a conference call with industry analysts to discuss financial results for the third quarter and 39 weeks, ending Feb. 4.
During the 13-week quarter net income for Sobeys after minority interests fell 12% to $73.7 million (U.S.), while sales rose 2.9% to $4 billion and same-store sales were up 1.2%. For the 39 weeks net earnings rose 0.7% to $225.5 million, while sales rose 3.2% to $12.2 billion.
