Canada's Sobeys Sees Profit Slip in First Quarter

STELLARTON, Nova Scotia - Sobeys Inc., Canada's second largest grocery chain behind Lowlaw Cos., today announced net earnings of $41.9 million for its first quarter ended Aug. 2 -- an 8.7 percent decrease compared to the same period last year.

Sales reached $2.76 billion, a 4.7 percent increase from the first quarter last year. Same-store sales increased 1.6 percent.

"Our first quarter results reflect the impact of a difficult summer selling season in Ontario compounded by the costs of bringing our Ontario distribution network back to pre-strike efficiency levels," said Bill McEwan, president and CEO. "At the same time, we are very pleased with the results of the early executions of our improved store formats and merchandising initiatives. We have therefore accelerated the pace of our efforts and investments beyond our original plan for the balance of this year."

The company said that overall food price inflation remained low in all of its operating regions, with substantial price deflation in key fresh categories.

Sobeys Inc. operates more than 1,300 corporate and franchised stores in all 10 Canadian provinces under retail banners that include Sobeys, Garden Market IGA, IGA, IGA extra, and Price Chopper.
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