Newspaper article The Canadian Press

Sobeys Parent Starts to Gain Market Share after Troubled Safeway Acquisition

Newspaper article The Canadian Press

Sobeys Parent Starts to Gain Market Share after Troubled Safeway Acquisition

Article excerpt

Sobeys parent starting to gain market share

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The East Coast company behind multiple grocery chains in Canada is gaining market share from competitors after a period of losing ground following its troubled acquisition of Safeway in 2013.

Empire Co. Ltd. touted its new "weapon" Farm Boy, an Ottawa-based chain it recently acquired, and forthcoming roboticized online-delivery fulfillment centre as the perfect combination to allow it to triumph in the Greater Toronto Area and surrounding markets.

"Our belief is that we're gaining market share now, slowly," said Michael Medline, Empire's CEO, during a conference call with analysts Wednesday after the company released its third-quarter financial results.

"We've gone from losing a lot of market share to stabilizing to beginning to gain some market share back, which is a big turn in a short period of time," he said. "So, it gives us a lot of confidence."

The gain is coming from a lot of different players in the industry, he said, declining to name specific competitors.

Empire's tonnage, the industry term for the number of units sold, grew 1.5 per cent for the 13 week period ending Feb. 2. It's the company's third consecutive quarter of tonnage growth and the strongest growth it's reported in 34 quarters.

Same-store sales, a key retail metric, increased 3.9 per cent, excluding pharmacy and fuel sales. The figure includes eight weeks of sales at Farm Boy stores, which Empire acquired late last year. The transaction closed Dec. 10, 2018.

Farm Boy's sales had minimal effect on the metric, said Medline, adding the majority of improvement is attributed to sharper execution.

Customer count and basket size grew in all regions across all the company's banners for the quarter, he said.

The company expects Farm Boy will help it accelerate growth in Ontario. The company plans to double the chain's size over the next five years with most of the growth planned for Toronto, where they expect it to be a "homerun. …

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