Thursday, September 9, 2021

Sobeys says sales declining, profits down

Empire Company Ltd., which owns Sobeys and a number of other supermarket chains, said sales are declining as restaurants reopen.

It has invested heavily in automated centres for internet shopping and grocery delivery via Voil√†,  but so far that’s not making money.


Growing fuel consumption, higher gas prices and the acquisition of the Longo’s grocery chain helped increase revenues by 3.7 per cent to $7.6 billion for its fiscal quarter that ended July 31.


Empire said it expects same-store sales to continue to fall for the rest of this year, as some COVID-19 restrictions have been lifted and Canadians have begun dining out more often. 


Same-store sales were roughly flat in the first quarter, but excluding fuel sales, that number fell by 2.2 per cent.


Empire, which owns grocery chains including Sobeys, Safeway and FreshCo, acquired 51 per cent of Ontario chain Longo’s and its e-commerce service, Grocery Gateway, in March in a $357-million deal. 


The company has also been expanding its FreshCo discount banner in Western Canada, opening new stores and converting some Safeway locations, and is expanding its Farm Boy chain in Ontario.


Empire is also in the process of expanding its e-commerce service, Voilà, which began doing home delivery from its distribution centre in the Greater Toronto Area last year, and is planning to open facilities in Montreal in early 2022, and Calgary in 2023.


Costs related to the pandemic have been decreasing for grocers. Empire reported that it spent roughly $18 million on safety and sanitization measures in the quarter, compared to $67 million in the same period last year.


The company reported that its net earnings fell to $188.5 million compared to $191.9 million  in the same period last year. 


Empire noted that the prior year’s earnings benefited from a sale of real estate, and said that excluding the impact of that transaction, earnings per share rose by 4.5 per cent.