Empire to Expand FreshCo Grocery Banner in Western Canada

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Empire Company Limited is aggressively expanding its FreshCo discount banner in Western Canada with its next six locations in the market including the first ones in Alberta.

Mike Venton, General Manager, Discount for the company, said the brand is really resonating with the Western Canadian shopper.

“We’re seeing a strong appetite for discount grocery options and our fresh product assortment continues to differentiate us from our discount competitors. Our three most recent new FreshCo’s in Western Canada (Kelowna, Kamloops, Williams Lake) and the four locations set to open in Central Canada (Saskatchewan) in Summer 2020 have all been well-received and we look forward to bringing the discount shopping experience to even more communities in Western Canada,” he said.

There are currently 110 FreshCo stores open in Canada which include locations in British Columbia, Manitoba, and Ontario. This summer, FreshCo will be coming to Saskatoon and Regina and in Spring 2021, Alberta, which Venton said are all exciting milestones in the brand’s expansion.

Empire has now confirmed 28 of approximately 65 locations in Western Canada. In fiscal 2018, the company announced plans to convert approximately 25 percent of its underperforming Safeway and Sobeys locations to FreshCo over a five-year period.

PHOTO: KELOWNANOW

“Breaking ground in Alberta is a significant milestone in our Western Canadian expansion. We have now opened or planned locations in every province in Western Canada,” said Venton. “Our FreshCo expansion into Western Canada is more relevant than ever before, as economic realities continue to shift. We are seeing a strong appetite for discount grocery options as the brand continues to resonate with the Western Canadian shopper.

“Our FreshCo stores have a variety of offerings that make us stand apart like best-in-market price guarantees, in-store pharmacies at many locations and a leading selection of unique items many of which are multicultural assortments that are tailored to the local markets.”

Since the first FreshCo opened in April 2019, the grocery giant said it has opened 14 FreshCo stores in B.C. and two in Manitoba. By the end of the second quarter of fiscal 2021, it plans to open two additional FreshCo stores in B.C. and four in Saskatchewan.

“The company will work with the union that represents impacted employees in Manitoba to ensure that all terms of the collective agreements are met. Options will be provided, including the opportunity to work at Safeway stores within the network or the new FreshCo locations,” it said.

The two Alberta FreshCo store locations are both located in Edmonton, in Heritage and Tamarack. The Tamarack location is a new construction site and the store is planned to open in Spring 2021. The Sobeys store in Heritage will close for renovation in Fall 2020 with plans to open as FreshCo in Spring 2021.

The four future Manitoba FreshCo store locations are: Sargent, Niakwa Village, Pembina & McGillivray, and Henderson & Bronx. The Safeway locations will all close in Fall 2020 with plans to open as FreshCo in Spring 2021.

“Store closure costs of the Safeway and Sobeys stores that will be converted to FreshCo will be charged to earnings in the first quarter of fiscal 2021 and are estimated to be approximately $4 million before tax,” said Empire.

Empire is headquartered in Stellarton, Nova Scotia. Empire's key businesses are food retailing, through wholly-owned subsidiary Sobeys Inc., and related real estate. With approximately $26 billion in annual sales and $14 billion in assets, Empire and its subsidiaries, franchisees and affiliates employ approximately 123,000 people.

In early March, Empire announced its financial results for the third quarter ended February 1, saying it recorded adjusted net earnings of $123.7 million ($0.46 per share) compared to $72.9 million ($0.27 per share) last year, an increase of 69.7 percent.

“We are pleased with our progress. Our execution has markedly improved and we continue to grow our bottom-line much faster than our major competitors," Michael Medline, President & CEO, Empire, said at the time. "Project Sunrise is on track and the momentum continues with our expansions of FreshCo in the West and Farm Boy in Ontario, as well as the upcoming launch of Voilà in the GTA. And in May, we will unveil our next three-year plan."

Empire is in the final year of Project Sunrise. The strategy is on track and yielding benefits that are expected to exceed management's initial expectations, said the company, adding that realized approximately $100 million of these benefits during fiscal 2018 through organizational design, strategic sourcing cost reductions and improvements in store operations. In fiscal 2019, the company realized a further approximate $200 million of benefits, driven by initial rollouts of category resets and cost reductions in other areas.

“Sales for the quarter ended February 1, 2020 increased by 2.4 percent driven by the consolidation of Farm Boy results, the expansion of FreshCo in Western Canada, internal food inflation and higher fuel prices. Internal food inflation was 2.2 percent (2019 – 1.8 percent) which reflects the price inflation of the Company's actual mix of product prices. These increases were partially offset by temporary store closures in Western Canada pending their conversion to FreshCo and promotional activity,” explained Empire.

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