Sobeys is betting the bacon that customers will remain loyal as the country’s second-largest national retail and food distributor alters its supermarket banners in Western Canada.

The grocer, with head offices in Stellarton, N.S., is gambling that consumers will continue to shop at their local Garden Market IGA, even if it has a different name and a new look.

Sobeys Inc. plans to have 57 full-service Western Canada grocery stores under the Sobeys nameplate once the process is complete. The stores will also carry more national brands as the company focuses on growing supplier rebates and vendor allowances.

In British Columbia, though, the changes will be minimal. Sobeys only operates six IGA stores – three Garden Market IGAs and three standard IGA supermarkets – in the province. All are in the eastern portion of B.C., in areas such as Golden, Invermere and Fort St. John, where it makes economic sense to supply stores from Calgary or Edmonton, Sobeys officials said.

At some point, it’s likely these Garden Markets will be converted to the Sobeys banner but the company would not commit to a timetable.

The remaining B.C. IGAs, including the MarketPlace IGAs in Kelowna and Vancouver, fall under the jurisdiction of the HY Louie Co.

The first Sobeys in Western Canada, a brand new 43,000-sq.-ft. store, opened in Winnipeg’s Grant Park earlier this fall. It will serve as a template to complete the conversion of the remaining 56 stores that originally operated under the Garden Market IGA name.

“The Garden Market IGA stores throughout western Canada are renowned for their fresh-food offering and great customer service,” said Gary Kerr, executive vice-president and general manager, Sobeys West. Kerr said that part of the thinking behind the switchover was to make sure that when customers shop a Sobeys-run supermarket, the right products and services are in place under its multiple store banners.

To accomplish that, routine and fill-in operations in Western Canada – stores where consumers do their main routine grocery shop and outlets where they go to do a fresh fill-in between the routine outings – will now be branded as Sobeys.

Above and beyond the announced changeover, any new stores will fall under the Sobeys banner. But the IGA name won’t completely disappear. However, non-Garden Market IGA stores could also be switched if it makes economic sense, said Kerr.

Reaction from IGA franchise owners and the public has been positive, the company said.

Analysts, meanwhile, are ringing up different opinions on whether the move is a good one.

Jonathan Norwood, an equity analyst who covers Sobeys for Halifax’s Beacon Securities, likes what he sees.

“I think it is good to convert, they’ll have fewer banners,” he said, referring to Sobeys’ 1998 purchase of the Oshawa Group Ltd., which is still being digested. Acquiring Oshawa added the IGA, Garden Market IGA, IGA extra and Price Chopper banners to the existing Sobeys brand, among others.

He sees store location, pricing levels and product offerings as more important to consumers than the actual store banner.

On the other side of the grocery aisle is Perry Caicco of CIBC World Markets.

Also an equity analyst who follows Sobeys, Caicco together with Kathleen Wong and Richard Piticco issued a report titled Burning Down The House: Converting Garden Market to Sobeys. The three Toronto analysts visited the template Sobeys in Winnipeg and were impressed with what they saw.

Sobeys’ groceries are competitively priced – below a comparison shop done with Safeway but more expensive than the same products at Loblaw’s Real Canadian Superstore. The report questioned whether it made more sense, from an investor viewpoint, to implement the changes while retaining the Garden Market banner.

Even though it said customers are having a great store experience, and Sobeys is forging ahead building a fresh-box store, the report asked why Sobeys didn’t keep the good Garden Market name and improve the stores as needed.

“In our opinion,” the analysts said, “this would remove significant risk and meaningfully lower the cost of renovating and relaunching these stores.

“If nothing else, Sobeys would not have to execute expensive and tightly co-ordinated complete market relaunches. They could just renovate and improve Garden Market stores according to opportunities presented by real estate and competitive situations. This would cost much less and would entail much lower risk.”

Norwood downplayed comments such as these, stating, “Sobeys is not managing its business for The Street, it’s doing it for themselves for long-term gain.”

As to the question of whether Wal-Mart’s introduction of its Sam’s Club warehouse operations – where food items compose a majority its sales – is a factor for Sobeys, Caicco and company said no in their report.

“Sobeys has other issues to deal with before warehouse clubs are a factor. In some markets, Sobeys stores are focused on a more upscale clientele (which Sam’s caters to), but Sobeys is far more rural than urban, with the bulk of its stores in markets that Sam’s probably wouldn’t get near for years.”

Sobeys now owns or franchises more than 1,300 corporate and franchised grocery stores in all 10 provinces. It is second to market leader Loblaw Cos. Ltd.