Empire Provides E-Commerce Update

Empire Provides E-Commerce Update

• Empire expands third-party delivery partnerships with the addition of DoorDash
• Company rationalizes certain e-commerce assets
• Company expects immediate benefits of approximately $95 million in annualized operating income; records write down of approximately $750 million in the third quarter of fiscal 2026

STELLARTON, NS, Jan. 28, 2026 /CNW/ - Empire Company Limited ("Empire" or the "Company") (TSX: EMP.A) and its wholly-owned subsidiary, Sobeys Inc., today provided an e-commerce update focused on delivering immediate earnings improvement while expanding its successful third-party delivery partnerships. The actions contained in this update will allow the company to better serve the evolving needs of its online customers, particularly in the fastest-growing immediacy segment of e-commerce.

Empire expects the actions contained in this update to deliver approximately $95 million in annualized operating income in fiscal 2027. The Company will incur non-cash impairment and related cash charges (including the impairment of right of use assets) in the third quarter of fiscal 2026 of approximately $750 million as a result of the rationalization and financial underperformance of its e-commerce network.

"We remain highly committed to grocery e-commerce in Canada and on continuing to make online shopping more convenient for our customers, while delivering immediate bottom-line improvements to our e-commerce business," said Pierre St-Laurent, President & CEO, Empire.

Key elements of Empire's e-commerce update include:

1. Immediate wind-down and closure of its Alberta e-commerce facilities, comprised of a Customer Fulfillment Centre (CFC) in the Calgary area and a smaller support facility in Edmonton. In addition, and as previously communicated, the Company will continue the pause on development of its CFC located in the Vancouver area.

Empire's Alberta e-commerce operations have not met the company's financial expectations, largely due to the Alberta grocery e-commerce market's size and expansion being smaller than originally anticipated. Empire will continue to support customers in Western Canada who prefer to shop online through its third-party partnerships.

The closure of the Alberta facilities is not expected to have a material impact on the Company's same store-sales growth.

2. The Company will continue to serve customers in Ontario and Quebec through its Voilà banner, supported by its existing CFCs in the Greater Toronto and Montreal areas. Those operations are growing steadily and continue to form a key component of the Company's overall offering.

With improving e-commerce penetration and high-growth potential in Ontario and Quebec, together with its strong partnership with Ocado, Empire is well positioned to increase customer engagement and improve productivity and profitability across these geographies.

3. The Company will expand its third-party delivery partnerships through a new collaboration with DoorDash, expected to begin rolling out in the coming months. The additional access to grocery essentials through one of Canada's leading local commerce platforms will grow home delivery options for customers across the country and builds on Empire's successful existing third-party partnerships.

These actions reflect the Company's commitment to provide customers a variety of e-commerce options, while improving profitability in all of its e-commerce channels.

"Customers in Ontario and Quebec love Voilà and, while difficult, the decisions we have made related to our CFC network in Western Canada will help ensure the long-term growth and profitability of our e-commerce business," said Mr. St-Laurent. "Our focus remains on thrilling our customers while giving them even more reasons to shop our banners through Voilà and third-party marketplaces across the country. This is just the beginning of the next chapter in reshaping our e-commerce strategy as we respond to the evolving needs and expectations of our customers."

ABOUT EMPIRE 

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 $31 billion in annual sales and $17 billion in assets, Empire and its subsidiaries, franchisees and affiliates employ approximately 129,000 people. Additional financial information relating to Empire, including the company's Annual Information Form, can be found on the company's website at www.empireco.ca or on SEDAR at www.sedarplus.ca.

ADDITIONAL INFORMATION

This document contains forward-looking statements which are presented for the purpose of assisting the reader to understand management's expectations regarding the Company's strategic priorities, objectives and plans. These forward-looking statements may not be appropriate for other purposes. These forward-looking statements include, but are not limited to, the following items: the magnitude of the non-cash impairment and related cash charges, expectations and the amount of immediate benefits to annualized operating income which may be impacted by the uncertainty related to future operating costs and successfully implementing operational efficiencies; timing of the launch of DoorDash which may be impacted by the timing of implementation of the related technology and the availability of third party resources, impact on same-store sales growth in Western Canada and expected increased customer engagement and improved productivity and profitability in Ontario and Quebec all of which may be impacted by changes in customer habits, the performance of its technology provider, Ocado Group plc, and the ability to successfully implement efficiencies.  By its nature, forward-looking information is based on assumptions and is subject to inherent 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 2025 annual MD&A. Although the company believes the predictions, 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 is subject to change and 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