Needs Convenience's parent company reports loss
Empire Co. Ltd., which also owns the convenience store chain Needs Convenience in Atlantic Canada, reported a quarterly loss after one-time charges tied to closing its Voilà grocery delivery facilities in Alberta weighed on its bottom line.
Empire reported a loss of $385 million. The grocer had said the operational changes were expected to deliver about $95 million in annual operating income.
"While this impacted reported earnings, it resets the cost structure and sharpens our focus on profitable growth," CEO Pierre St-Laurent told analysts on the company's fiscal third-quarter earnings call on Thursday.
Needs Convenience's parent company had warned it would take a large writedown after it announced in January it was closing its Voilà grocery distribution centres in Alberta and pausing the online service's expansion in the Vancouver area.
St-Laurent told investors during the call that two-thirds of the anticipated savings will flow through to the bottom line, while the remainder will be reinvested in growth initiatives.
The company is focusing on simplifying its operations across segments such as IT, marketing and supply chain, the CEO said. It's looking into smaller, quick steps it can take to improve efficiency, such as investing in supply chain technology and electronic shelf labels.
St-Laurent said digital labels, for instance, simplify the store's life through better efficiency, and have improved accuracy. "It's many small, little things that are driving benefits right now."
Meanwhile, the company plans on opening more grocery stores, with a continued tilt toward discount banners.
Customers are still shopping for deep discounts and promotions amid ongoing economic uncertainty and high food prices — a shift that has pushed other major grocers to also expand their discount store footprint over the last few years.
The grocer reported its same-store sales were up 1.2%, while same-store food sales gained 2%.
Food sales rose 3%, while the company says fuel sales fell 11.4% primarily due to lower prices driven by the removal of the government carbon tax.