The Success of Chalo FreshCo: A Paradigm Shift in Retail Targeting Strategies

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 areFreschCo 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?

ANSWER

The Success of Chalo FreshCo: A Paradigm Shift in Retail Targeting Strategies

Introduction

The retail landscape in Canada has witnessed a significant transformation with the emergence of Chalo FreshCo, a brand repositioned by Sobey’s to cater specifically to the South Asian community in Western Canada. Recognizing the diverse shopping preferences of their target segment, Sobey’s introduced Chalo FreshCo as a one-stop-shop that provides all the weekly needs of South Asian customers under one roof. This strategic move has proven highly successful, leading to rapid expansion and widespread positive reception among the target community.

 Understanding the Target Market

Chalo FreshCo’s success can be attributed to its deep understanding of the needs and preferences of the South Asian community in the lower mainland. Prior to Chalo FreshCo’s introduction, South Asian buyers had to visit multiple stores to complete their weekly grocery shopping, seeking better value and specific products like spices, produce, and halal meats. By identifying this gap in the market, Sobey’s leveraged the opportunity to create a brand that addresses the unique requirements of the South Asian demographic.

Cultural Sensitivity and Inclusivity

One of the key factors contributing to Chalo FreshCo’s triumph is its emphasis on cultural sensitivity and inclusivity. The brand’s name itself, ‘Chalo,’ meaning ‘Let’s go’ in Hindi and Punjabi, is a testament to their effort to connect with the target audience on a cultural level. This approach resonates with the South Asian community and fosters a sense of belonging, ultimately driving customer loyalty.

 Comprehensive Product Mix and Competitive Pricing

Chalo FreshCo’s success is further bolstered by its comprehensive product mix, which covers all essential grocery categories. The brand offers bakery, dairy, deli, frozen foods, general grocery, meat and poultry, produce, seafood, and snacks – a true one-stop solution. Additionally, Chalo FreshCo strategically positions itself as a discount banner, utilizing Every Day Low Prices (EDLP) to compete with established supermarkets like Safeway Foods. The emphasis on unbeatable value, discounts, and weekly deals reinforces its commitment to offering cost-effective options for its target consumers.

 Strategic Marketing and Community Engagement

Chalo FreshCo’s marketing strategies have been both effective and well-directed. From utilizing local print media and radio to promote deals and special promotions to offering customers the option to receive weekly flyers through email, the brand ensures consistent engagement with its customer base. The inclusion of cultural events like bhangra performances during store openings further endears the brand to the target community.

 Impact on the Retail Industry

The resounding success of Chalo FreshCo is expected to have a significant impact on the retail industry in Canada. Other retail giants are likely to take notice of the brand’s achievements and explore opportunities to target ethnic communities more effectively. While some may adopt similar strategies to cater to specific demographics, others may choose to innovate and develop unique approaches to appeal to diverse customer segments.

Conclusion

The triumph of Chalo FreshCo is a testament to the power of understanding and catering to the unique needs of ethnic communities in Canada. Sobey’s repositioning of their brand to serve the South Asian community has proven to be a shrewd business move, leading to exponential growth and widespread recognition. As the retail industry evolves, it is likely that other retail giants will draw inspiration from Chalo FreshCo’s success and explore innovative strategies to engage and cater to various ethnic groups, further diversifying the Canadian retail landscape. Cultural sensitivity, inclusivity, comprehensive product offerings, and competitive pricing will undoubtedly play pivotal roles in shaping the retail strategies of the future.