Empire reported a slight dip in earnings and also announced it’s expanding its click-and-collect offering in around 85 additional stores in the remainder of fiscal 2022. 

Empire, the parent co. of Sobeys, Farm Boy and FreshCo and the country’s second largest grocer, reported Q1 net earnings of $188.5 million ($0.70 per share) compared to $191.9 million ($0.71 per share) the year prior for the quarter ended July 31.

The company says its “strong” and “consistent” performance is being driven by strategic initiatives, including the continued expansion and renovation of store networks, promotional optimization, data analytics and strategic sourcing efficiencies, offset by continued investment in its ecommerce network, including increased costs in its Calgary and Montreal markets.

Sales for the quarter totalled $7.6 billion, up from nearly $7.4 billion, an increase of 3.7% driven by the purchase of a majority stake in GTA specialty grocery Longo’s, as well as its Grocery Gateway e-commerce and delivery service.

Gross Q1 profit moved up 3.4% primarily as a result of the inclusion of Longo’s results, the success of its delivery service, Voilà, and expansion of Farm Boy and FreshCo.

The company is also reporting that benefits from the first quarter of Project Horizon, a three-year growth plan focused on core business expansion and the acceleration of e-commerce, are in line with expectations. Previously, CEO Michael Medline has said he wants to “win Canadian grocery ecommerce,” by expanding its footprint and private label portfolio and investing in data and analytics. Currently, the company says it’s on track to achieve a targeted incremental $500 million in annualized EBITDA by 2023.

Empire says it expects improvements in the results of its Toronto-based ecommerce site as volumes continue to increase and costs reduce thanks to improved operational efficiencies.

The company currently has customer fulfillment centres (CFCs) in Vaughan and Montreal for its Voila delivery service, with deliveries from the Montreal centre expected to begin in early 2022. The company is now planning a third CFC for Calgary, which will service the majority of Alberta, and is expected to deliver to customers in the first half of calendar 2023. Online sales, Empire says, have continued to grow, although at a slower pace than when the COVID-19 pandemic began.

The company plans to open a fourth fulfillment centre in a yet-to-be-announced location. Between the four centres, it expects to cover 75% of Canadian households, though it says those households represent 90% of Canadian ecommerce spending.

For its outlook, the company says that as lockdowns ease, “consumers are expected to shop more frequently and at more grocery stores,” however it does not expect grocery consumer behaviour to return fully to pre-pandemic levels for the foreseeable future.