Empire Advances FreshCo Expansion

3 Safeway and Sobeys stores in Canada to be converted to discount banner

5/11/2021

Empire has confirmed 40 of approximately 65 planned locations of FreshCo in Western Canada, including 12 locations in Alberta.

Canadian company Empire Co. Ltd. is continuing to convert conventional stores to FreshCo with the announcement of the next three locations for the discount banner in Alberta: Jasper Gates, in Edmonton; Lewis Estates, in Edmonton; and Downtown Fort McMurray. The respective Safeway and Sobeys stores are expected to close in the second quarter of fiscal 2022, and open as FreshCo stores by the end of the fourth quarter of fiscal 2022.

Empire has now confirmed 40 of approximately 65 planned locations in Western Canada, including 12 locations in Alberta.

Empire has opened 15 stores in fiscal 2021, consistent with its Project Horizon strategy to open 10 to 15 FreshCo stores per year. Empire unveiled this three-year growth strategy in July 2020 to deliver an incremental CAN $500 million in annualized EBITDA by the end of fiscal 2023.

"Customers in Alberta are welcoming FreshCo with open arms, thrilled to see a new and fresh discount option in their local markets," said Mike Venton, general manager, discount. "Our team of front-line leaders and store teammates in the West is committed to continue opening stores that deliver on our freshness, price and in-stock guaranteed promises. The customer response to our entry into the market gives us great confidence in our brand and marketing strategies."

Since April 2019, Empire has opened 16 FreshCo stores in British Columbia, six in Manitoba, four in Saskatchewan and two in Alberta. By the end of fiscal 2022, the company plans to have all of the 40 FreshCo stores confirmed to date open in Western Canada.

The company will work with the union representing affected Safeway employees in Alberta to ensure that all terms of the collective agreements are met. Safeway employees will be provided opportunities to work at Safeway stores within the network or at the new FreshCo locations.

Store closure and conversion costs are estimated to be approximately CAN $6.3 million before tax and will be charged to earnings in the first quarter of fiscal 2022.

Meanwhile, Empire has also completed the purchase of 51% of Longo's, a long-standing family-built network of specialty grocery stores in the greater Toronto area (GTA) of Ontario, and the Grocery Gateway e-commerce business.

"We are so pleased to officially welcome Longo's and Grocery Gateway into the Empire family," said Michael Medline, president and CEO of Empire. "For more than 65 years, the Longo family and their talented team have served the GTA market, establishing their brands, customer experience and private label as best in class. We know the Longo's and Grocery Gateway business will continue to succeed under the leadership of Anthony Longo as president and CEO, and his management team. The Longo's culture is so closely aligned with Empire, and our teams will work together to ensure this partnership thrives and that we unlock meaningful benefits for our businesses."

Empire is headquartered in Stellarton, Nova Scotia. Its key businesses are food retailing, through the wholly owned Sobeys chain, and related real estate. With approximately CAN $28.4 billion in annual sales and CAN $15.0 billion in assets, Empire and its subsidiaries, franchisees and affiliates employ approximately 127,000 people. Sobeys is No. 21 on The PG 100, Progressive Grocer's list of the top food retailers in North America.