Target Canada and Sobeys Inc announced today their long-term wholesale distribution arrangement. The agreement will have Sobeys providing Target Canada with select food and grocery products in early 2013.
Products and grocery requirements under the arrangement include frozen, dairy and dry grocery goods.
“We are pleased to welcome Target as a valued wholesale customer. The associated increased revenue, and the supply chain efficiencies which will lower our costs, will continue to strengthen our competitive position,” said Bill McEwan, President & CEO, Sobeys Inc.
“Target is excited to be working with a partner like Sobeys. We look forward to building a strong relationship that creates value across both companies for a long time to come,” said Tony Fisher, President, Target Canada.
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Sobeys has a Canadian coast-to-coast network of 23 food distribution centres. Sobeys plans to provide Target Canada with the same kind of service it does to its own network of 1,300 stores across Canada. Addditionaly, both companies have mutually agreed to leverage each other’s distribution networks to reduce transportation costs. Supply Chain opportunities will also be explored under this arrangement.
Target plans to open its first set of stores in Canada in early 2013. Launching 105 stores, Target is another US based franchise that is reaching out to the Canadian market. Hoping to compete with rival Walmart Canada, Target Canada has its work cut out for itself in the competitive Canadian retail landscape.