One-third of Discount locations in Western Canada now confirmed
- 22 FreshCo locations in Western Canada confirmed to date
- Seven stores now open in B.C. and Manitoba
- Five FreshCo stores to open in B.C. later in 2019 and early 2020
- Six Safeway locations in B.C. to re-open as FreshCo stores in Spring 2020
- Four Safeway locations in Saskatchewan announced today will be converted to FreshCo stores in Summer 2020
- $21 million in store closure costs to be expensed in the first quarter of fiscal 2020
STELLARTON, NS, July 24, 2019 /CNW/ - Today Empire Company Limited ("Empire" or the "Company") (TSX: EMP.A) announced the next four locations for the expansion of its FreshCo discount banner into Western Canada. With these four locations in Saskatchewan, the Company has now confirmed 22 of approximately 65 locations in the West. In fiscal 2018, the Company announced plans to convert approximately 25% of its underperforming Safeway and Sobeys locations over a five year period.
"We are one-third of the way selecting and opening our FreshCo stores in Western Canada," said Mike Venton, General Manager, Discount. "We continue to make smart investments and leverage our current real estate network to deliver exactly what our customers want. We are winning market share we simply couldn't compete for in the past. The customer feedback so far has been strong and we're moving full steam ahead with our rollout."
Most recently, the Company opened its first two Chalo! FreshCo stores in the West in Surrey, B.C. Building on the traditional FreshCo discount offer of quality fresh products at industry-leading low prices, Chalo! FreshCo stores offer an expansive South Asian product assortment. The Company plans to open four more FreshCo stores in B.C. in 2019 and seven in 2020.
"Our marketing leading up to each store opening has been very strong and focused on connecting with the local community in a meaningful way," explained Mike Venton. "We will continue to push hard and win in this hyper-competitive discount space. So far, we've effectively differentiated ourselves as the discount grocery retailer of choice with exceptional quality, product assortment, fresh produce and price."
The four future Saskatchewan FreshCo store locations announced today are: Regent Park, Confederation, 33rd Street, and Market Mall Saskatoon. The respective Safeway locations will all close in March 2020.
The FreshCo stores in Saskatchewan are expected to open Summer 2020, depending on the timing of construction schedules and permits. Store closure costs will be charged to earnings in the first quarter of fiscal 2020. The combined closure costs related to store conversions are estimated to be approximately $6 million. These costs, along with the costs from the June FreshCo announcement and two Farm Boy conversions, total $21 million, which will be charged to operating earnings in the first quarter of fiscal 2020.
Click here for a full list of the 22 FreshCo store locations confirmed to date.
Empire Company Limited (TSX: EMP.A) is a Canadian company headquartered in Stellarton, Nova Scotia. Empire's key businesses are food retailing, through wholly-owned subsidiary Sobeys Inc., and related real estate. With approximately $25.1 billion in annualized sales and $9.6 billion in assets, Empire and its subsidiaries, franchisees and affiliates employ approximately 123,000 people.
This document contains forward-looking statements which are presented for the purpose of assisting the reader to contextualize the Company's financial position and understand management's expectations regarding the Company's strategic priorities, objectives and plans. These forward-looking statements may not be appropriate for other purposes. Forward-looking statements are identified by words or phrases such as "anticipates", "expects", "believes", "estimates", "intends", "could", "may", "plans", "predicts", "projects", "will", "would", "foresees" and other similar expressions or the negative of these terms. These forward-looking statements include, but are not limited to, the following items:
- The FreshCo expansion in Western Canada, including the Company's expectations regarding future operating results and profitability, the amount and timing of expenses, and the number, location, feasibility and timing of conversions, all of which may be impacted by construction schedules and permits, the economic environment and labour relations;
- The FreshCo expansion into the province of Saskatchewan, including the Company's expectations regarding locations, conversion and labour costs could be impacted by the outcome of relevant labour negotiations to support the discount expansion into the province; and
- The conversion of a FreshCo store to Farm Boy including the Company's expectations regarding the amount and timing of expenses, which could be impacted by construction schedules and permits and the economic environment.
By its nature, forward-looking information requires the Company to make assumptions and is subject to inherent risks, uncertainties and other factors which may cause actual results to differ materially from forward-looking statements made. For more information on risks, uncertainties and assumptions that may impact the Company's forward-looking statements, please refer to the Company's materials filed with the Canadian securities regulatory authorities, including the "Risk Management" section of the fiscal 2019 annual MD&A.
Although the Company believes the predictions, forecasts, expectations or conclusions reflected in the forward-looking information are reasonable, it can provide no assurance that such matters will prove correct. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward looking information and are cautioned not to place undue reliance on such forward-looking information. The forward-looking information in this document reflects the Company's current expectations and is subject to change. The Company does not undertake to update any forward-looking statements that may be made by or on behalf of the Company other than as required by applicable securities laws.
SOURCE Empire Company Limited
For further information: Media Contact, Jacquelin Weatherbee, Director, External Communications, Sobeys Inc., (416) 200-0372; Investor Contact, Katie Brine, CP, CA, CBV, CPIR, Director Finance & Investor Relations, Sobeys Inc., (905) 238-7124 ext. 2092