SWOT Analysis of Chalo FreshCo Stores

QUESTION

Retail giant Sobey’s targeting communities with a repositioned brand: FreshCo
A typical South Asian buyer in the lower mainland used to shop at one supermarket for the groceries, at an Indian grocery store for spices/ produce, and had to drive to a different location for meats and poultry, to get the best value for their weekly shopping. Sobey’s saw the opportunity and introduced the brand ‘Chalo FreshCo’, a one stop shop for all the weekly needs of its target segment, in Western Canada, with the opening of 2 locations in July 20191. The word ‘Chalo’ means ‘Lets go’ in Hindi and Punjabi2. Some of the locations of Chalo FreshCo replaced stores for Safeway Foods3. The company’s website loudly talks about South Asian & Canadian meals4, and includes mentions of Halal meat counters, desi dinners, Canada’s ultimate desi grocery store; Chalo! for Vah!, providing further evidence of the new brand’s target segment.
Sobey’s is owned by Empire Company Limited, which owns multiple food chains like Price Chopper, Foodland, Thrifty Foods, IGA and FreshCo5. While first Chalo FreshCo store was opened in 2015 as research at the time showed that many South Asian customers were feeling the need to shop at multiple shops to complete their weekly needs6. The first store was opened in 2015 in Brampton, ON, suburb of Toronto7. The opening ceremony of the Chalo FreshCo store in Surrey, BC included ribbon cutting and a bhangra (an East Indian traditional dance) performance. The news article also reported that the new brand is an extension of the discount brand FreshCo8. Until then there were four existing locations in Ontario9. By summer 2021, the brand has expanded to third province i.e. Alberta10. The company has confirmed that 28 out of its 65 retail outlets in Western Canada were FreschCo stores, affirming the growth of the discount banner which was launched in 201511.
Further evidence was provided by Chris Phillipson, the franchisee for the Newton location in Surrey, BC. Mr. Phillpson confirmed that the outlets were focused on serving the demographics of surrounding areas, which are heavily dominated by members of the target communities12.
The product mix at the Chalo Freshco is designed to fulfil the daily needs of the target segment customers under one roof. The retail outlets offer bakery, dairy, deli, frozen foods, general grocery, general merchandize, meat and poultry, produce, seafoods, and snacks. In other words, it has all the offerings of competing super markets. The stores are
1 Collins, Lauren. “Surrey Chalo! FreshCo Locations Officially Open – Surrey Now.” Leader. July 12, 2019. Accessed June 22, 2021. https://www.surreynowleader.com/business/surrey-chalo- freshco-locations-officially-open/.
2 Collins, Lauren. “Surrey Chalo! FreshCo Locations Officially Open – Surrey Now.” Leader. July 12, 2019. Accessed June 22, 2021. https://www.surreynowleader.com/business/surrey-chalo- freshco-locations-officially-open/.
3 Ibid.
4 Ibid.
5 “Ladner Safeway to Shut down and Convert.” Delta Optimist. January 29, 2019. Accessed July 02, 2021. https://www.delta-optimist.com/local-news/ladner-safeway-to-shut-down-and-convert- 3092562.
6 Willaim-Ross, L., 2019. These two just-opened FreshCo locations in Metro Vancouver are the “ultimate desi grocery store”. [online] Vancouver Is Awesome. Available at: <https://www.vancouverisawesome.com/food-and-drink/chalo-frescho-grocery-stores-south-asian-food-surrey-bc- 1944544#:~:text=%22Sobeys%20opened%20its%20first%20Chalo,roof%2C%22%20explains%20Canadian%20Grocer.> [Accessed 23 July 2021].
7 Canadian Grocer. 2015. Sobeys launches South Asian store. [online] Available at: <https://canadiangrocer.com/sobeys-launches-south-asian-store> [Accessed 23 July 2021]. 8 Ibid.
9 Ibid.
10 “CHALO FreshCo Tamarack.” Chalo! Freshco. Accessed June 22, 2021. https://chalofreshco.com/stores/chalo-freshco-tamarack/.
11 “Empire Progresses Freshco Discount Expansion, Announcing First Two Alberta Locations and Four New Manitoba Locations.” Empire Company Limited, June 9, 2020. https://www.empireco.ca/en/investor-centre/news-release/empire-progresses-freshco-discount-expansion-announcing-first-two-alberta-locations-and-four-new-manitoba-locations/. 12 Ibid.
© Daman Singh

big, and the fact that some of the Safeway Foods locations have been replaced by Chalo FreschCo confirms the same.
The prices of the products are kept lower as compared to Safeway Foods, and the company is trying to compete with supermarkets in EDLP (Every Day Low Prices) segment. The official website includes mentions of unbeatable value, discounts, weekly deals making strong references to the pricing aspect.
Although the chain doesn’t have a loyalty program, it offers the customers to sign up for a weekly flier delivered through email. The company is also using local print media and radio to promote the deals and special promotions. Is the success of Chalo FreshCo going to prompt other retails giants in the country to target ethnic communities? Or will they come up more innovative strategies in retailing?
The assignment: Provide answers to the two questions.
1. Perform a SWOT analysis for Chalo Freshco stores (and not Sobey

ANSWER

 SWOT Analysis of Chalo FreshCo Stores

Introduction

Chalo FreshCo, a repositioned brand of Sobey’s, has successfully tapped into the market of South Asian communities in Western Canada. With its focus on providing a one-stop shop for all the weekly needs of its target segment, Chalo FreshCo has rapidly expanded and gained popularity. To understand the strengths, weaknesses, opportunities, and threats faced by Chalo FreshCo, let’s conduct a SWOT analysis.

Strengths

Targeted Approach: Chalo FreshCo’s brand positioning and marketing strategies are tailored to cater specifically to the needs of the South Asian community. This targeted approach has helped the stores resonate with the target audience and gain a loyal customer base.

Product Mix: Chalo FreshCo offers a comprehensive product mix that includes bakery, dairy, deli, frozen foods, general grocery, meat and poultry, produce, seafood, and snacks. This diverse offering ensures customers can find everything they need under one roof, eliminating the need to visit multiple stores.

Competitive Pricing: The company’s emphasis on offering “Every Day Low Prices” (EDLP) allows Chalo FreshCo to provide competitive pricing, making it an attractive option for cost-conscious consumers.

Cultural Inclusivity: By providing Halal meat counters and desi dinners, Chalo FreshCo showcases cultural inclusivity, appealing to the preferences and dietary requirements of the target community.

Growing Presence: Chalo FreshCo has rapidly expanded its footprint to different provinces, indicating strong growth potential and market demand.

Weaknesses

Limited Loyalty Program: Chalo FreshCo lacks a dedicated loyalty program, which could hinder customer retention and prevent the collection of valuable customer data for personalized marketing.

Limited Geographic Reach: While Chalo FreshCo has expanded to multiple provinces, its physical presence is still limited compared to some other major retail chains, potentially limiting its reach and market share.

Opportunities

Ethnic Community Focus: Chalo FreshCo’s success could prompt other retail giants in Canada to target specific ethnic communities with similar tailored offerings. Exploring other culturally diverse communities could present opportunities for growth and expansion.

Digital Marketing: Investing in digital marketing initiatives, such as social media campaigns and online promotions, could help Chalo FreshCo reach a broader audience and drive customer engagement.

E-commerce Expansion: Introducing an online shopping platform could provide greater convenience to customers, particularly during pandemic situations, and open up new revenue streams.

Threats

Intense Competition: The retail industry in Canada is highly competitive, with well-established players vying for market share. Chalo FreshCo faces stiff competition from other supermarkets and ethnic grocery stores targeting the same customer segment.

Changing Consumer Preferences: Consumer preferences and shopping habits can evolve rapidly. Chalo FreshCo must stay attuned to changing trends and continually adapt its offerings to remain relevant.

Conclusion

Chalo FreshCo has strategically positioned itself as a one-stop shop for the South Asian community in Western Canada. Its targeted approach, competitive pricing, and comprehensive product mix have contributed to its success. However, it needs to address its weaknesses, such as the absence of a loyalty program, and explore new opportunities, such as e-commerce expansion and digital marketing, to maintain its growth trajectory. While the success of Chalo FreshCo may inspire other retailers to target ethnic communities, innovation and adaptability will remain crucial in the competitive retail landscape.