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Industry NewsEmpire plans more stores, e-comm ramp up amid supplier negotiations

Empire plans more stores, e-comm ramp up amid supplier negotiations

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Empire Company Limited says it’s on track to continue store expansions for FreshCo and Farm Boy banners and ramp up its e-commerce infrastructure across Canada, as it continues to focus on supplier relationships amid rising costs.

Empire reiterated its growth strategy as it reported third quarter fiscal 2022 results, with a quarterly profit increase of 15.4 per cent at $203.4 million, up from $176.3 million a year ago. Sales for the quarter increased 5.1 per cent, primarily due to the acquisition of Longo’s, higher fuel sales, increased food inflation and benefits from Project Horizon, a three-year business and e-commerce expansion strategy.

It also said it’s focused on its supplier relationships to ensure competitive pricing for customers, particularly now with inflation rapidly pushing up the costs of goods.

“Our team delivered another outstanding quarter, including the highest EPS in memory, with strong increases in sales, EBITDA margin and free cash flow,” says Michael Medline, president & CEO, Empire. “When you look at these results against the backdrop of the extremely volatile economic and retail environment, the strength of our team shines through. We are on track to deliver our Project Horizon targets next year, but the benefits don’t stop there. Material Project Horizon value will continue to be earned in fiscal 2024 and beyond.”

Empire announced plans to expand FreshCo to Western Canada and since that time it has converted 25 per cent of Safeway and Sobeys stores in the region to the FreshCo banner. The company plans to open two more locations in fiscal 2022 in Alberta and another two stores in the province for fiscal 2023.

Farm Boy is on track to expand by seven new stores in fiscal 2002 and as of March 2022, it the banner has 43 stores in Ontario.

Voilà plans to operate four CFCs across Canada, with two currently in operation in Ontario and Quebec, a third planned for Calgary, Alta. and a fourth in the Vancouver, B.C. area slated to open in 2025.

Focusing on competitive pricing

“The industry is experiencing supply chain challenges primarily related to labour shortages caused by COVID-19. Although it is difficult to estimate the duration of these challenges, management remains focused on, where necessary, utilizing alternative sourcing options and does not expect significant adverse impacts to its supply chain,” adding that the market is also “experiencing cost inflationary pressures, particularly related to cost of goods sold. Although it is difficult to estimate how long these pressures will last, the company is focused on supplier relationships and negotiations to ensure competitive pricing for consumers.”

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