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Marc Poulin, chief executive officer and president, Sobeys Inc. and Empire Co. Ltd. (Anthony Jenkins for The Globe and Mail)
Marc Poulin, chief executive officer and president, Sobeys Inc. and Empire Co. Ltd. (Anthony Jenkins for The Globe and Mail)

Sobeys’ Marc Poulin: The shrewd negotiator at the heart of Canada’s grocery wars Add to ...

Marc Poulin knew he had an important telephone call to make.

It was 4 p.m. on June 12 last year and the chief executive officer of Sobeys Inc. was about to unveil an unexpected $5.8-billion deal to acquire rival Safeway Inc.’s stores in Western Canada, shoring up Sobeys’s position as the country’s No. 2 grocer. Every major competitor lusted after Safeway, but Sobeys had quietly won the prize.

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Among the chains most intent on acquiring those stores was Metro Inc., the country’s third-largest grocer. It so happens that Metro’s CEO, Eric La Flèche, is an old high-school buddy of Mr. Poulin.

“He was the first person I called,” Mr. Poulin says, poking a plastic fork and knife into a $14.99 lunch of roast beef and salad in the eatery of a bustling new Sobeys Extra supermarket. “I didn’t want him to be blindsided …

“I wanted him to be aware of it just to be fair and polite. I called him and said, ‘Eric, we’re making this announcement, you may want to huddle with your PR team and prepare yourself because you’re going to get lots of questions.’”

The 52-year-old likens this gesture to the strategy he uses during his weekly hockey games. “You don’t play to injure someone,” he says. “You just play to score goals.”

It’s an approach that surfaces in many aspects of Mr. Poulin’s life, from corporate deal-making to playing hockey and chess. Strategy and drive served him well as he stick-handled secret negotiations that began in the fall of 2012, when he and Paul Sobey, former CEO of Sobeys and its parent, Empire Co. Ltd., and a fourth-generation member of the controlling family, approached the struggling U.S. grocer about selling its profitable Canadian division.

The deal is expected to spark a wave of consolidation in the competitive grocery sector, which had been rocked by the arrival of U.S. discounter Target Corp. and the expansion of Wal-Mart Canada Corp.’s food offerings. In July, Loblaw Cos. Ltd., the top market player, announced a mammoth, $12.4-billion agreement to swallow Shoppers Drug Mart Corp.

In Ontario, where Sobeys’s fledgling FreshCo chain dukes it out with other discount grocers, one industry executive recently called the landscape a “bloodbath.”

The heated environment is partly why the Safeway acquisition was so crucial for Sobeys – and why it went to great lengths to avoid a bidding war, Mr. Poulin says. Code-named “London,” the project consisted of meetings about the deal that were held mostly in hotels, often in cities other than the location of the two companies’ head offices, for fear of tipping someone off. Ultimately, there was no auction for the coveted Safeway assets.

“Nobody thought we could pull it off,” Mr. Poulin says. “To tell me that when we started on that journey that I had certainty that we would get it done – not really.”

Mr. La Flèche says the June 12 call from his old high-school friend was a surprise and very brief. “It was a courtesy and I appreciated it,” Mr. La Flèche says. At the time, his spokeswoman told The Globe and Mail: “Safeway knew our interest. We were not invited to negotiate. We doubt that we would have been ready to pay that amount for these assets.”

But while Mr. Poulin has enjoyed success on the competitive battlefield, what he appreciates most is being part of a team. Which is what draws him to hockey (he plays defence), which he began playing after university.

“There’s enough competition in business that I’m not trying to get more,” he says, despite his wife Ginette’s belief that he lets his aggression out on the ice. “I prefer the social element of playing with friends – or against friends – than just doing an exercise routine. You’re on the ice and you don’t think about anything else. You run on a treadmill and it’s more difficult to get away from thinking of the business.”

The path to grocery chain executive wasn’t always clear. Mr. Poulin studied actuarial science at Laval University, but worked summers at consultancy Secor, which was acquired last year by KPMG, and realized he enjoyed working with people rather than just numbers. He says running the soccer league in his undergrad years was his first management experience. By the time he got into the grocery sector, “my plan was always to manage the business – and a complex business, per se.”

He went on to do a master of management, with a specialty in marketing, at Northwestern University’s J. L. Kellogg Graduate School of Management in Chicago.

At the age of 24, he landed a job at consumer products giant Unilever, essentially heading its high-profile Sunlight detergent business in Canada. “I was managing it by default,” he explains, with a characteristic hearty laugh. “I had no bosses. They kept being transferred or leaving the company.”

Marcel Côté, co-founder of Secor and a former long-time member of Sobeys’s and Empire’s boards of directors, remembers Mr. Poulin as a “boy genius” who looked much younger than he was, but didn’t necessarily show signs of being a future leader. He encouraged the young man to switch from packaged goods, a globalized industry with little local opportunity to shine, to retailing, which was gaining power.

“He made the transition from being a nerd to being a leader,” Mr. Côté says.

After a year at Unilever, Mr. Poulin was lured away by former Secor consultants who had moved to top positions at Provigo. He hadn’t meant to remain in retailing long – at the time he had thought of it as “sales training” and planned to return to packaged goods. But in 1997, he was weighing four different job offers, one of them from former Provigo executives at grocer Oshawa Group (later acquired by Sobeys) who persauded him to come on board. “Friendships and how comfortable you feel on the team make all the difference in the world,” he says.

After Sobeys bought Oshawa Group – which ran IGA stores – Mr. Poulin made his mark by persuading the Sobeys board to hang on to the IGA name in Quebec because of its deep ties there. “He wowed the whole board,” Mr. Côté recalls. Mr. Poulin moved up the ranks, heading Sobeys’s most profitable division, in Quebec, and became CEO of the retailer in June, 2012.

Mr. Poulin will face a similar challenge in Western Canada, as he works through the Safeway acquisition. In addition to finding $200-million in annual savings – Sobey’s recently told suppliers they will have to shave their prices by 1 per cent, retroactive to Nov. 3, and drop planned price increases for 2014 – the company will also eventually consider whether it should drop the Safeway name, which is a significant brand in places such as Calgary and Vancouver. And there’s the matter of that intense competitive environment. To gain an edge, Mr. Poulin is borrowing a leaf from his Quebec supermarket formula, focusing on fresh food. There are elements of a premium Whole Foods style in the new Sobeys Extra store we’re lunching in.

High-margin fresh foods take up roughly 40 per cent of the store space, about 10-per-cent more than in a typical Sobeys supermarket. Displays of prepared foods, including his hot roast beef and crunchy veggie salad, are prominently featured near the entrance. To underscore the importance of healthy fare, Sobeys has teamed up with celebrity chef Jamie Oliver to cook up new products and act as pitchman.

To respond to bargain-hungry consumers, Mr. Poulin has started to test lowering some prices to narrow the gap between regular and discounted items. It’s a difficult balancing act – Sobeys’s same-store sales grew only 0.1 per cent in the first half of this year as all grocers feel the pinch of a more crowded market.

Mr. Poulin is in the stores regularly: He does the family grocery shopping, while his wife does the cooking. He criss-crosses the country, averaging three cities a week, spending only the weekends at his home in Montreal.

About half the time he travels in one of the company’s two private jets, especially when he goes to Sobeys’s head office in Stellarton, N.S., a one-hour-15-minute drive from Halifax. With the Safeway acquisition, he’s spending more time in Western Canada. But he says the company won’t be moving its headquarters from Stellarton, which is close to the company’s controlling Sobey family homes.

Mr. Poulin discussed the possibility of moving his family from Montreal, but they nixed the idea. The children’s schools are a five-minute walk from their home. “You’re not going to be there anyway,” he remembers them telling him.

He enjoys snowboarding – he learned while in his 30s – and chess, which he started to play after his son Mathieu began taking lessons. Mathieu, now 20, became a chess champion and both father and son have played internationally. Mr. Poulin, who headed the Quebec Chess Federation for a number of years, has a 1,135 rating and his son, 2,055.

He even brought chess to Sobeys: To help raise funds for a Grade 10 student in New Minas, N.S., to play at a world championship in the United Arab Emirates, Mr. Poulin recently agreed to a game at the local Sobeys store. “I got creamed,” he says with another laugh.

But more importantly, he says chess helped him fine-tune his business skills and “how you position yourself so that you can take advantage of opportunities when they show up.”

--------------------------------------------

CV: Marc Poulin, president and CEO Sobeys and parent Empire Co. Ltd.

PERSONAL

Born: Aug. 26, 1961, in Quebec City

FAMILY

Father, Paul, worked in insurance; mother, Micheline, was an administrative assistant

Wife, Ginette Côté. Two children, Mathieu, 20, second-year student at École Polytechnique; and Justine, 18, second-year CEGEP student at Collège Jean-de-Brébeuf studying software engineering

EDUCATION

Bachelor of actuarial science from Laval University (1982)

Master of management (marketing) from the J.L. Kellogg Graduate School of Management at Northwestern University in Chicago (1985)

CAREER

1985-1986: Marketing at Unilever Canada

1986-1993: Held progressively senior marketing and merchandising roles at Provigo Inc., including senior director of marketing and merchandising

1994-1995: General manager of fine bread and soup division at Culinar Inc.

1995: Vice-president of corporate marketing at Desjardins-Laurentian Life Group

1997: Joined Oshawa Group as vice-president of grocery merchandising. Company was acquired by Sobeys Inc. in 1998. In 2001, he was appointed president of operations at Sobeys Quebec and, in 2011, president of IGA operations business unit

2012: President and CEO of Sobeys Inc.

December, 2013: Added role of president and CEO of parent Empire Co. Ltd.

EXTRACURRICULAR ACTIVITIES

On board of directors of Montreal Heart Institute Foundation; past president of the Quebec Chess Federation and member of the Montreal Board of Trade. In 2010, he was recognized as one of Quebec’s top business leaders by Perform Quebec

Plays hockey and chess

IN HIS OWN WORDS

I get to eat too many airplane meals rather than actual good food.”

“Consumers are not paying attention to regular prices. We’ve trained them so much to look for specials and promotions that they’ve lost track of what is good pricing. … It’s the overhang of the promotional drug that we’ve been feeding them for so long. It’s getting to a point that, as an industry, we’ve done it to ourselves.”

On playing hockey and soccer: “It’s this idea of being gentlemen on the field. You play hockey and you don’t want to put the other guy in the hospital, you just want to score goals. There’s a way to behave in sport where you act like a gentleman and the same thing in business.”

Life is too short to create unnecessary animosities. You can compete and drive your business, but it doesn’t have to be done in a conflicting fashion. You’ve got be above that.”

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