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Empire Q2 profit and sales up, plans online grocery expansion in Alberta


Empire Co. Ltd. reported its second-quarter profit and sales rose compared with a year ago as it announced plans to expand its Voila online grocery service to Alberta.

The company behind the Sobeys grocery store chain says it will launch Voila curbside pickup service in Alberta next year before starting home delivery service from a new customer fulfilment centre to be built in Calgary in 2023.

"We are now ready and well positioned to take the next meaningful step forward in our plans to win the e-commerce battle in Canada," said Michael Medline, Empire's president and CEO.

The announcement came as Empire reported a profit of $161.4 million or 60 cents per share for the quarter ended Oct. 31, missing analysts' expectations.

Analysts on average had expected a profit of 65 cents per share for the quarter and $6.93 billion in sales, according to financial data firm Refinitiv.

The second-quarter result compared with a profit of $154.6 million or 57 cents per share a year earlier when the results were boosted by unusually large property disposals by Crombie Real Estate Investment Trust that added six cents per share.

Sales in the quarter totalled nearly $6.98 billion, up from nearly $6.44 billion in the same quarter last year. Same-store sales, a key metric for retailers, were up 7.3 per cent. Excluding fuel, same-store sales were up 8.7 per cent.

The COVID-19 pandemic has upended the operations of retailers, which have invested more resources into health and safety for employees, and in some cases have offered pay raises to workers.

On a call with analysts Thursday, Medline said the company was taking steps to prepare for reduced capacity in its stores this winter, by adding outdoor structures and heaters to shelter customers waiting in lines outside and by offering virtual queuing technology to streamline the process.

Sobeys said in November that it was bringing back pay premiums for employees in cities that have seen new lockdown restrictions due to COVID-19, after offering raises earlier in the year.

Sobeys also said in October that it was committed to negotiating with vendors about fees, after groups complained about other major food retailers like Loblaw Companies Ltd. and Walmart Canada unilaterally hiking fees on suppliers. Food retailers charge their suppliers fees to cover costs such as marketing and distribution.

Empire's planned e-commerce expansion in Alberta comes as online grocery sales in Canada continue to grow, although at a slower pace than at the start of the pandemic, the company said in a news release.

Empire's e-commerce business saw growth of 241 per cent in the second quarter compared to the prior year, as a second wave of virus cases led to new lockdown measures in many parts of the country.

This report by The Canadian Press was first published Dec. 10, 2020.

Companies in this story: (TSX:EMP.A)

Jon Victor, The Canadian Press

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