Sobeys to Supply Target Canada
Last week’s announcement that Target Canada had chosen Sobeys as its wholesale grocery products supplier is being viewed by analysts familiar with the Canadian market as a positive for both companies, according to a Financial Post report.
Sobeys, with 23 distribution centers across Canada, will begin supplying Target in early 2013. Target has said it plans to open up to 135 stores in Canada, beginning in March 2013.
The deal with Sobeys appears very similar to one Target struck with Supervalu in the U.S. when the retailer decided to place a greater emphasis on grocery products to drive store traffic. During that time, Target has taken over some of its own distribution to some stores, while Supervalu supplies others.
"We plan to have a long-term relationship with Sobeys," Tony Fisher, president of Target Canada, told the Financial Post. "We want to look into what further supply chain opportunities there may be with Sobeys. … I think there could be other opportunities for us to explore an expanded partnership when it comes to food supply chain with Sobeys."
Bill McEwan, president & CEO, Sobeys, welcomed the deal with Target. "The associated increased revenue, and the supply chain efficiencies which will lower our costs, will continue to strengthen our competitive position," he said in a press release.
- Sobeys to Supply Target Canada with Food and Grocery Products – Target Corporation
- Sobeys to supply Target stores in Canada – Financial Post/CBC News
- Sobeys and Target: a winning combination – Financial Post
- Target Completes Canadian Voyage – Zacks Investment Research/Daily Markets
Discussion Questions: What do you think of the Target/Sobeys deal? Are there insights to be gleaned from how Target structured its grocery distribution system in the U.S.?