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Why Sobeys had to Dump Air Miles: Op-Ed

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Sobeys recently decided to dump Air Miles and start its own loyalty program. Empire, Sobeys parent company, is opting to join the Bank of Nova Scotia and Cineplex as co-owner of the Scene+ program. This latest move by Sobeys is no coincidence. As we brace for higher food prices and cope with a post-COVID workforce still trying to figure things out, loyalty will probably be the next major battle ground for Canadian grocers.

The Scene+ program at Sobeys will start in Atlantic Canada in a few months, and the cross-country roll out will end by early 2023. The partnership with Air Miles will officially end soon after. That’s fast. Most Sobeys-owned stores, including its online service Voilà will have the program. Given how the market is changing right now, this move was critical and perhaps long overdue.

Since March 2020, 26% of Canadians have switched the primary location where they purchase food on a regular basis, according to a recent poll by Angus Reid. Many have moved or have opted to change their grocery shopping location for one reason or another. Having more people working from home has also triggered behavioural changes where grocery shopping is concerned. And with food inflation at 10% these days, consumers are either trading down or changing food shopping habits almost weekly. With higher food prices, everything is negotiable. Where people buy food, and what they buy is constantly changing these days, and keeping customers engaged with brands and stores is going to be challenging over the next several years. Coupled with the fact that younger consumers are rarely keen on being dedicated to any brands or stores these days, consumers need to be hardwired to become loyal, more than ever.

Sobey’s in Brighton, Ontario (Image: Field Agent Canada)

Sobeys quick roll-out will serve the company well, as it needed a better loyalty program. PC Optimum is by far the most popular program where foods are involved. More than 63% of Canadians use the PC Optimum program, followed by Air Miles at only 18.3% according to a recent survey by Caddle. Interestingly, the current Scene program is 6th on the list, at a measly 1.9%. The gap between PC Optimum and the rest of the field is enormous. What’s more important, while 58% of Canadians use loyalty programs at the grocery store every week, 73% of us are influenced by what kinds of benefits these programs can offer us.

With few promotions going on at the grocery store and higher prices, Canadians will seek any help they can get. And food prices aren’t about to drop anytime soon.

Air Miles is a versatile loyalty program used by many retailers. But for Sobeys, it became just an invisible advantage few really cared about. Sobeys never really had control over it. With the high number of miles you could collect, the program became confusing for both members and retailers, including Sobeys. But knowing that Metro, one of Sobeys’ main competitors in Eastern Canada, also had a deal with Air Miles was becoming increasingly awkward in an era in which getting customers back, and back again, will be challenging. The market is just not the same as it was in 2020 when the pandemic started. Consumers are now economically challenged in many ways and a strong loyalty program can allow Sobeys to empathize with a struggling public.

With higher prices and an acute focus on private labels, Loblaws, with its PC Optimum program, clearly has an advantage Sobeys wanted to address. While Sobeys is getting its “private label” act together, it also needs a program to push its own brands like Compliments and Panache. Loblaw’s private labelling strategy, along with President’s Choice and No Name, has left the competition in the dust.

Air Miles (LoyaltyOne) Headquarters in Toronto, Ontario (Image: Dustin Fuhs)

Only time will tell as to what the program will look like and how it will get consumers to buy more often at Sobeys. But seeing Empire/Sobeys, a Nova Scotia-based company partner with the Bank of Nova Scotia was anything but a surprise. Even if Scene doesn’t have the clout of a PC Optimum program, it has the potential to do well. Scene has 10 million members, but the awareness of the brand is frankly lacklustre and few use points. Sobeys’ network could change that. It also needs a unique name, a different one, to make it Sobeys’ own.

Regardless, for Sobeys, working with Air Miles was like rowing against the current. Sobeys was likely just waiting for its contractual obligations to end, so it could move on to bolster a program it can better control.

Article Author

Sylvain Charlebois
Dr. Sylvain Charlebois is Senior Director of the Agri-Foods Analytics Lab at Dalhousie University in Halifax. Also at Dalhousie, he is Professor in food distribution and policy in the Faculty of Agriculture. His current research interest lies in the broad area of food distribution, security and safety, and has published four books and many peer-reviewed journal articles in several publications. His research has been featured in a number of newspapers, including The Economist, the New York Times, the Boston Globe, the Wall Street Journal, Foreign Affairs, the Globe & Mail, the National Post and the Toronto Star.

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11 COMMENTS

  1. As a member of Scene+, PC Optimum, AirMiles and Metro loyalty programs I value AirMiles most. I can earn AirMiles at many of the places I regularly shop through AirMilesShops. Neither Scene+ nor PC Optimum have nearly the breadth of options as AirMiles. IGA (Québec) is where I prefer to shop but I have to use Metro sometimes because it’s the closest store. I wish that wasn’t the case because they don’t stock many of the items I regularly buy and the quality of the Metro house brand is poor. I’ll continue to shop at IGA because quality and range of products are more important to me than location but AirMiles was a nice perk that I’m going to miss.

  2. If Sobey’s doesn’t offer Air Miles I have absolutely no reason to shop at Sobeys. They are not known for having low prices. I hate the rebranding of the Compilments brand and loath the colour and packaging of the Panache brand. Too bad local owners have no say in their stores. …S Jacobs

  3. I have always preferred the PC Optimum branding and prefer to shop Atlantic Superstore, if nothing else because Sobeys’ regular (non-sale) prices have always been outrageous. That said convenience has often pushed me into a Sobey’s store. Points are extremely slow to collect with airmiles and have a poor payout ratio. Good Riddance – I can’t wait to be done with Air Miles.

  4. I find it strange the author did not dig into the fact that many major brands have dumped air miles recently. Brands like Lowe’s, Rona, LCBO just to name a few.

    • Many more, like Uniqlo, have joined. Almost all the places I shop for clothing, personal care and miscellaneous items are on AirMilesShops. I’ve never been into Lowes or LCBO and rarely shop at Rona so I guess it depends on your shopping habits.

  5. I was a Safeway customer while safeway had the Airmile program. Then Safeway was converted to Freshco. With Freshco, no more airmiles, and lower variety. I switched to Sobeys. Higher prices yes. However better quality, variety, airmiles, and outstanding customer service. The customer service at superstore did not exist. Lastly, I’ve never had my Airmiles hacked, but have had my pc optimum points hacked.

  6. This is a slap in the face for using Safeway for years…now Sobeys is squashing the airmiles plan…well it helps people who live in cities that cineplex or if you don’t bank with the Bank of Nova Scotia…but you still want us to shop at the most ridiculous prices…the larger store chain with the highest prices. It is cheaper to shop at No Frills…get points on a Optimum Card and use it for food or gas. Wake up Sobey’s.

  7. In the ’00s I shopped primarily at Safeway. I used my Club Card and collected Air Miles and loved it. Lately, I’ve been avoiding Safeway and using PC Express Curbside pick up at No Frill and RCSS since Voila curbside is not available at my nearest Sobeys and Safeway stores.

  8. This is going to impact me as a single mom that relys on my air miles that I recieve daily and get 6 a day for scripts not to mention I buy alot of my daily needs there because of being the closes to walk to but now if sobeys owns lawtons there goes my bread milk and egg money that I think any single mom on a budget needs and it was always my guarantee to get 20 cash miles a month but now I guesse I’ll be changing pharmacies to get optimum points and be able to not worry how to afford simple something back from all the money the make off my medications I buy daily that I’m shure ends up in sobeys bank account that I hope goes down for making a decision based on a guesse if will help them or give there competition their earnings that they cant even predict how screwed they are gonna be.Sobeys should really go back to the drawing board if they think they are gonna even have there customers that use there miles and get enough to pay for something that rewards you with scene points sorry not everyone is into that scene and food is nessesoty theaters and movies are not .I’m actually discusted r/n .

    • So true. I collect mine all year just to use them at Christmas. Makes a major difference in our household and you get to pick up the extras you wouldn’t normally buy. It’s a big help to anyone, especially single parents. Sad they chose that route. They just lost a customer. 🥺

  9. I have both Air Miles and Scene which I use frequently

    I guess we will have to wait and see what kind of rewards Sobey’s will fork out and how many Scene points per dollar a customer will earn. I guess it all depends how much you shop and what the retailer offers for points and airmiles. Would like to see how things go through

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