Federated Co-operatives Ltd. is eliminating more than 200 jobs in Calgary this spring as it shuts down its Calgary Food Distribution Centre effective April 2020.
In a news release on Thursday, FCL said the move comes as a result of Calgary Co-op’s recent decision to source its groceries from Save-on-Foods.
“We’re deeply saddened by this avoidable development,” said Vic Huard, FCL executive vice-president of customer experience and stakeholder engagement.
“In a city that’s already experiencing significant economic challenges, Calgary Co-op’s decision has led to more jobs being lost, and more families facing challenges. By aligning itself with a competitor, Calgary Co-op has directly and negatively impacted our employees, their families and Calgary’s economy.”
In July, Calgary Co-op announced it would no longer use FCL as its food supplier.
“As part of the Co-operative Retailing System (FCL and 170 local co-ops across Western Canada), every year FCL returns much of its profit back to local co-ops so they can share it with their members and communities. Over the past five years (2014 to 2018) Calgary Co-op has received $186.4 million in profit sharing from FCL. Calgary Co-op’s decision will result in a $400 million reduction in FCL’s revenue, which will have a negative effect on returns like these that FCL provides to Calgary Co-op, and to other local co-ops across Western Canada,” said FCL in the news release.
“There’s been a Co-op warehouse in Calgary for 70 years, and we know that the negative repercussions of this decision will be felt for a long time in Calgary,” added Huard.
FCL said the wind down of the Calgary Food Distribution Centre will begin soon. Products for other co-ops in Alberta and B.C. will gradually be shipped through FCL warehouses in Edmonton and Saskatoon.
“For now, we’re obviously focused on our employees and trying to give them as much time as possible to make transition plans since we know this puts them in a difficult spot,” said Huard. “We’ll also continue to evaluate all aspects of our operations to determine if further steps need to be taken.”
FCL, based in Saskatoon, is the 58th largest company in Canada and the largest non-financial co-operative in Canada. FCL is a multibillion-dollar wholesaling, manufacturing, marketing and administrative co-operative owned by more than 170 autonomous retail co-operatives across Western Canada. Its total workforce of 25,000 employees serve 1.9 million active individual members and many more non-member customers at 1,500 retail locations in more than 580 communities.
Mario Toneguzzi is a business reporter in Calgary.
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