Stellarton-based Empire Company has announced some changes in its grocery business. In releasing its second quarter results, the company announced that up to 25% of its 255 Safeway and Sobeys stores in Western Canada will be converted to its discount FreshCo banner over the next five years. Company CEO Michael Medline says it’s research and analysis suggests the West is fertile ground for “small box” discount and its FreshCo banner will resonate with consumers in Western Canada.
Empire lost $23.6 million in the second quarter ending November 4th as the company was hit with restructuring costs. During the same period last year, it posted $33.1 million profit.
Last month, Empire announced plans to cut 800 office jobs as it restructures, including 100 at its Sobeys head office in Stellarton.
The President and CEO of Stellarton-based Empire Company Michael Medline, has announced a major overhaul. Medline calls his intiative “Project Sunrise”, intended to deliver $500 million in annual savings by the end of the 2020 fiscal year. In a release, the company says it will allow Empire to reinvest in its business and grow its sales and bottom line. Empire owns the Sobeys grocery store chain.
The savings will come from collapsing multiple, independent regions into a national structure, simplifying how the company conducts its business. It will also simplify it’s relationship with companies that supply products to its stores and implement efficiencies across the company.
The changes will affect office staff only; front-line store employees and distribution centres won’t be impacted.
While it acknowledges there is room for improvement, the parent company of the Sobeys grocery store chain has rallied from the huge loss it posted last year in writing down the value of its western business.
Stellarton-based Empire Company posted net earnings in the third quarter of 30.5 million dollars. That compares to a 1.3 billion dollar loss during the same period last year, after placing an impairment charge of 1.73 billion dollars on assets it acquired in the 5.8 billion dollar purchase of the Safeway Canada grocery chain.
Empire’s revenue fell by 137.4 million dollars to 5.89 billion dollars, mostly from its Sobeys grocery business. Same-store sales at Sobeys dipped 3.1 per cent.
First quarter profits are down for Stellarton-based Empire Company. Empire, the parent company of the Sobeys grocery store chain. reported net earning in the opening three months of its fiscal year at $65.4 million. That’s down $43.4 million or 39.9 per cent from the same period last year.
Its western Canadian business unit continues to sputter. Same store sales excluding fuel down 1.2 per cent. If the negative impact of fuel sales and its western retail unit were removed from the calculation, same store sales would have risen 0.6 per cent.