Sobeys in St. Stephen

The Sobeys store in St. Stephen will close at 6 p.m. on July 5, along with almost 50 other stores across the country. (Shane Fowler/CBC)

The Mayor of Perth-Andover, where one of five Sobeys and Foodland stores are closing in New Brunswick, says the closure can only mean bad news for the community.

An internal review by the grocery store chain has decided the closure of Sobeys stores in St. Stephen along with Foodland stores in Edmundston, Nashwaaksis, Perth-Andover, Tracadie-Sheila and Amherst, N.S.

The stores will close at 6 p.m. on July 5.

'It's catastrophic for our village.'—Perth-Andover Mayor Terrence Ritchie

"It's catastrophic for our village," said Perth-Andover Mayor Terrence Ritchie. He said when a supermarket closes in a community like theirs with only two supermarkets, the other store doesn't always pick up all the business.

"The whole community actually loses. People are just going to go to nearby communities," he said.

Sue Newman of St. Stephen said she would only shop at Sobeys for a deal. With an Atlantic Superstore just across the road she was free to shop around for the best prices.

"It`s always better when there are two stores competing in a town. So I`m a little worried," she said.

Stores 'consistently underperforming'

Shauna Selig, the manager of communications for Sobeys Atlantic, said the decision to close those stores was announced at staff meetings on Tuesday evening.

“We reviewed our network stores as we do on a market-by-market basis,” she said.

“We made a decision to close six stores in the Atlantic region that have been consistently underperforming.”

Selig would not say how many employees will be affected by the closure of the six stores.

However, she said the grocery chain is trying to find roles for some of the individuals in other stores.

“We are treating all of our employees with respect and we have made efforts to find some comparable roles in the network, and all the others have been offered respectful severance compensation,” she said.

The closures in the Maritimes are a part of a larger restructuring that is being rolled out across the country.

Nova Scotia-based Empire Co. Ltd., the parent company of Sobeys, says it's closing about 50 underperforming Sobeys to improve its net earnings. It says about 60 per cent of the affected stores are in Western Canada.

Selig said these decisions are a part of the company’s long-term business strategy. In October 2013, the Competition Bureau of Canada ordered Sobeys to sell 23 stores in Western Canada before it would approve its $5.8-billion purchase of Safeway Canada.

“We did take the opportunity to review and evaluate the store network," Selig said. “This review is part of the regular course of business. It would have happened regardless of the acquisition of Safeway.

Corrections

  • An earlier version of this story said the Competition Bureau of Canada had ordered Sobeys to close 23 stores in Western Canada. In fact, the bureau had ordered Sobeys to sell 23 stores.
    Jun 26, 2014 5:54 PM AT