By Marjo Johne
In the three-plus years since its launch, the Pattison Food Group (PFG) has deftly tackled the challenge of bringing multiple businesses – 11 banners to date including two in the U.S., plus two private labels, three production facilities, a pharmacy division, two distributors and two loyalty programs – under one overarching strategy.
It’s been a monumental undertaking, in large part because of the distinctive identity of each of the food retail banners, which are all built on the full-service grocer model but with offerings specific to teach brand and target market. “But I think we’ve done a good job,” says Paul Cope, senior vice president, retail operations at Save-On-Foods, the largest banner in the Pattison Food Group, which was formed in February 2021.
The biggest part of this effort has been the realization of efficiencies and economies of scale across the business, which PFG continues to advance. There’s also the always-on imperative to leverage the strength of each banner while building in enough brand flexibility to allow each store to answer the needs of its local community.
But in this age of inflation and growing economic uncertainty, another strategic priority – one that has always been there, even before the formation of PFG – has grown increasingly urgent across all PFG banners: delivering value to shoppers.
“In the current lens that we’re in right now, all of us have to be able to find value for our customers,” says Cope. “So the challenge for each of our banners and stores is: How do you connect uniquely with your customers in that value, while remaining a full-service grocer?”
Understanding customers – and their changing definition of value
Understanding how customers define value is key, and that starts with knowing who your customers are, he adds. Given the country’s shifting demographics – with more older Canadians, and more solo-occupant households – PFG’s banners have had to find new ways to offer value that makes sense to today’s consumers.
“I can point to a couple of departments, such as meat and in grocery, where we’ve made a shift to offer value to somebody that’s single or perhaps living in a small space,” says Cope. “When we’ve had case lot sales, for example, we’re sensitive to the fact that not everybody’s got room for a giant case of boxed chicken or a jumbo pack of bathroom tissue or juice. So we’ve been able to downsize these so it’s not all giant packs – maybe we sell it as a 12-pack but still at a value price.”
One Save-On-Foods store, located in Vancouver’s relatively new River District development, serves a customer base made up largely of condo dwellers. For these smaller households, the local Save-On-Foods has customized value packs that can stretch to more than one meal but also offer variety across those two or three meals. For example, says Cope, a value pack of beef or chicken might come with different cuts of meat instead of just rib eye steaks or drumsticks.
“We get lots of very unique requests from customers of that store so we want to be as flexible as possible,” he says. “We give our stores that ability to adapt and uniquely be able to take care of their customers.”
A growing movement: Food as medicine
Yet even as consumers increasingly seek value, many also want premium products and elevated food retail experiences. Ben Harrack, senior vice president, PFG retail banners, points to the success of a relocated and expanded Nature’s Fare Markets store in Kamloops, B.C. – one of seven stores, located in B.C. Okanagan and Lower Mainland regions, under a banner known for high-quality organic produce, natural grocery products and premiums vitamins and supplements.
With a much bigger footprint – 20,000 square feet versus the banner’s usual size of about 12,000 square feet – the new store offers wider and deeper selections of organic produce and meats, as well as stepped-up food service in its Bistro and Smoothie Bar.
“It’s really outpacing all other banners with growth,” says Harrack. “Thinking about what’s happening in the marketplace right now – with price and value so important to Canadians – and seeing the growth in this kind of premium banner, it’s exciting to see where that’s going to go. It’s a little bit of an outlier to what we’re seeing out there.”
One reason may be the growing movement around food as medicine, driven by a steadfast group of consumers who are committed to eating a certain way. These shoppers are still spending on organic and natural products, even if they’ve cut back on other expenses such as clothes and travel.
“The other thing that I think Nature’s Fare has done a good job with is getting their pricing more equalized with the conventional grocery,” says Harrack. “So there’s no longer the big price discrepancy between the two.”
Exciting growth in the Asian market
Another area of growth is in the Asian market. A Save-On-Foods expected to open this June in Kelowna will features shelves well-stocked with products targeted to Asian shoppers, with a strong focus on serving the Korean community where the new store will be located.
At the same time, PFG’s dedicated Asian banner – PriceSmart Foods – is set to open its fourth store at the end of year in Coquitlam, B.C. Earlier in the year, PriceSmart had opened its third store in the same community.
“Personally, one of the things I’m most excited about is the expansion of our PriceSmart Foods brand because we’ve sat with two stores for quite some time and it’s exciting for me to be able to watch the brand grow,” says Cope. “There’s a huge Asian marketplace here in the Lower Mainland and I believe we’re uniquely positioned to be a leader in this space.”
PFG has the talent and deep expertise to win in this marketplace, with a number of people in management roles who can speak Cantonese, Mandarin, Korean and other Asian languages, and who have the necessary cultural understanding, says Cope. He himself has direct experience in Asian food retail.
“I got to spend time managing one of our stores – it was a 70,000-square-foot store – that was half an Asian grocery store and the other half was a Western grocery store,” he recalls. “It was probably two of the most rewarding years I ever had in retail. I learned so much and managed to pick up just enough Cantonese and Mandarin to be dangerous.”
Growth and innovation across borders
The story of growth at PFG is also an ongoing saga of innovation. As its banners proliferate across western Canada, PFG continues to bring novel ideas into its stores. A standout among its many successful innovations is the full-service concept, applied in areas such as restaurant, seafood and meat. One unique restaurant offering – in a new Quality Foods store on Vancouver Island – was designed as a social space, complete with bar and kitchen.
PFG’s growth has also become a tale of two countries. After buying Oregon-based Roth’s Fresh Markets in late 2021 – a deal that started with nine stores in one state but expanded months later with Roth’s acquisition of Chuck’s Produce and Street Markets in Vancouver, Wash. – PFG remains on the lookout for other opportunities. These include the possibility of bringing its private-label brand, Western Family, across the border and on the tables of American consumers.
Harrack says PFG is looking at sites in Salem, Ore., as potential areas where Roth’s can expand its presence. Beyond Oregon, there are promising markets in Northern California, Washington State and Idaho, where diets and lifestyles are somewhat similar to those in B.C. PFG is also “actively looking” for potential acquisition targets, with a focus on brands similar to its own core brands.
“The one thing that we really loved about Roth’s right away is they’re so much like us – just real down-to-earth grocery people with the same focus around quality, freshness, community and team,” says Harrack. “That pretty much sums up who we are at Pattison Food Group, and that’s something we want to hang on to as we continue to grow.”
