News photo Collin Gallant
The Safeway location at the Medicine Hat Mall is set to become a "FreshCo" a lower-cost retail outlet also owned by Sobey's, the News has learned.--News photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
The Safeway location at the Medicine Hat Mall will be closed next year to reopen as a related low-cost food retailer, though workers at the store are raising concerns.
Empire Co., which owns Safeway and Sobey’s across Canada, has been introducing the FreshCo brand stores across the country, and in the fall announced 12 of 65 planned stores would be in Alberta.
On Wednesday the union representing Safeway workers issued a statement applauding the company for committing to build new “Safeway” and upscale “Chalo” brand stores in Airdrie and Calgary, but said the change in Medicine Hat was “a bad decision that makes absolutely no sense.”
The United Food and Commercial Workers, Local 401, says changing brands puts customer retention at risk and will hurt employees.
“Safeway is a long-standing and successful brand that made considerable profits during the pandemic,” said union executive director Chris O’Halloran in a statement. “Investing in those stores and the employees that work there just makes good business sense.”
The closure and remodelling will result in layoffs, during which time unionized employees could be able transfer to other locations based on seniority, but as many as 150 employees in total could be put out of work, based on employment estimates in collective agreements.
The UFCW and Sobey’s came to an agreement for Alberta locations last year, though the union is now challenging in court a mediator’s decision on FreshCo working conditions.
The company did not respond to request for more information, but sources tell the News that the plan is to completely close the location in early 2022, then reopen later that year. The gas bar located in the northeast corner of the mall parking lot would be closed permanently.
It’s the third project of Empire Co. and its related real estate firm, Crombie REIT, in Medicine Hat in three years.
The Safeway location on Division Avenue at the Southeast Hill is in the final stages of a renovation, and the Sobey’s location in Southlands was painted last year.
There was no confirmed construction value on the renovations and rebranding, though a company release last May about three other FreshCo conversions stated costs of about $2 million per outlet.
