After one year, “Project Sunrise,” the plan Sobeys CEO Michael Medline launched to meet the challenges the company has been facing since its $5.8 B takeover of Safeway in 2013, is getting mixed reviews.
When Medline was brought on board in January 2017, the company was saddled with a complex, inefficient organization and a dysfunctional supply chain that slowed or even prevented goods shipments to stores. The decision to revamp the company’s rewards program and drop popular brands also hurt the brand’s reputation with customers.
Medline’s three year, four point plan is to simplify and centralize the corporate structure, cut $500 million in costs, restore the brand’s reputation and address problems in western Canada, Safeway’s home turf.
Corporate structure has been rationalized, sales are climbing, shelves are better stocked and reductions in office staff have saved $25 M. But a recent Globe and Mail article notes that the plan is proceeding slowly. Medline has yet to trim the Sobeys supplier base and negotiate new terms with the rest, something he hopes will generate most of the planned cost savings.
One industry expert says the company’s stores in western Canada are “bland” and lack a unique value proposition. And observers say Sobeys is lagging behind the competition when it comes to online grocery shopping and delivery.