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Industry NewsEmpire Company's new strategy: Expand stores, e-comm and private label

Empire Company’s new strategy: Expand stores, e-comm and private label


Empire Company Limited plans to build news stores and renovate others, invest further in e-commerce and grow its private label portfolio with a focus on adding $500 million in annualized savings.

The plans are part of a three-year strategy outlined by Empire’s president and CEO Michael Medline.

The strategic plan, dubbed Project Horizon, is a follow-up to its previous three-year plan that achieved more than its savings target of $550 million.

“Empire now has the team, the structure and the vision to achieve its sales and earnings potential,” says Medline. “Even though we exceeded our Project Sunrise savings target of $550 million, there is still substantial value to unlock through Project Horizon. As the retail landscape in Canada continues to react and shift under the seismic waves caused by the pandemic it is clear now, more than ever, that we must be able to serve customers where, when and how they want to shop. We will invest in our core store business to drive growth and will move much faster with Voilà customer fulfillment centres and a new, exciting store pick solution, using Ocado technology.”

Some of the money from the savings will be used to open 20 new Farm Boy locations in Ontario and convert up to 35 stores in Western Canada to FreshCo banners.

Key investments include

  • Invest in Empire’s Store Network: Empire says it will accelerate investment in physical assets, through renovations and conversions, and store processes, communications, training, technology and tools. Towards the end of the last three years, re-investment in Empire stores was a key priority, which along with the expansion of the FreshCo and Farm Boy banners, are reflected in the company’s estimates of future capital spending, averaging $700 million annually over the next three years.
  • Improve Store Space Productivity: Improving sales per square foot is the crucial engine for long term market share growth. During Project Sunrise, the Company built the foundation of its advanced analytics capabilities. Analytics will drive improvements in every customer facing element, including store footprints, customer promotions and availability of product on shelf. With Category Resets complete, the Company is able to further improve the customer experience by leveraging advanced analytics, to tailor its assortment to store formats and optimize product adjacencies.
  • Win Canadian grocery e-commerce: Empire is accelerating its plans for the remaining two Voilà e-commerce CFCs – for a total of four CFCs across Canada – and introducing Ocado’s proven store pick solution. This store pick solution will serve customers in areas where the CFCs will not deliver, or are not yet built, and will begin in Nova Scotia at the end of the summer, before expanding and moving West. Ocado’s store pick solution is live and successful in various cities across the world.
  • Grow Empire’s private label portfolio: Over the past two years the company has improved its private brands’ positioning and branding with a strong consumer response. Penetration of the Company’s private brands has been growing faster than the industry for all of fiscal 2020, which has been further amplified during the pandemic. Empire is now at a logical juncture to review the specific role of private brands in each category and determine in which categories and banners to expand based on consumer needs. Working closely with its supplier partners, Empire says it plans to further grow sales of its private label brands through increased distribution, shelf placement and product innovation.
  • Provide Best in Class customer personalization: Empire is moving forward aggressively with investments in analytics and technology to better identify customer preferences and support direct, personalized communication – evolving from mass communications to personalized connections with its customers. The goal is to deploy world-class personalized communications and offers to inspire customers and improve the experience and relevance of promotions.

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