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Sobeys owner records 10.7% jump in sales

One of Canada's biggest supermarket chains is positioning itself as Canada's "fair but tough" grocery retailer, reinstating pay bonuses for front-line workers and refusing to unilaterally impose fee increases on suppliers.

"There's a right way to do business and there's a wrong way to do business," Empire Co. Ltd. president and CEO Michael Medline told analysts during a conference call on Wednesday. "We're fair but tough."

His comments come as the parent company of Sobeys, FreshCo, Safeway and other grocery banners reported a surge in sales during the latest quarter as the pandemic continued to impact how Canadians shop for food.

The Stellarton, N.S.-based grocer recorded a 10.7 per cent increase in same-store sales, excluding fuel, in its third quarter ending Jan. 30. That momentum continued into the current quarter, with sales up nine per cent in the first five weeks.

Yet Empire cautioned that sales results could appear skewed going forward as it approaches the one-year mark of the pandemic.

Many shoppers stockpiled food and household goods at the onset of the COVID-19 outbreak due to fears around supply chain reliability and other uncertainties, resulting in an 18 per cent increase in same-store sales in the fourth quarter of last year.

Grocery chains offered workers so-called hero pay increases of $2 an hour at the outset of the pandemic in recognition of their essential role and the risk of working with the public.

The retailers faced public outcry last June, however, when those bonuses were cancelled despite ongoing record profits. But Empire reintroduced the pay bump for front-line employees in stores and distribution centres during the latest wave of lockdowns.

The company paid out an extra $9 million in bonuses for workers in impacted areas, Empire said.

Metro Inc. provided its front-line workers with gift cards ranging from $75 to $300 at a total cost of about $8 million in its latest quarter, the company said in an email Wednesday. Loblaw Cos. Ltd. did not immediately respond to questions about whether it had reinstated a bonus.

Meanwhile, grocery retailers have also come under fire in recent months for imposing fee increases on suppliers. But Sobeys refused to follow in its competitor's footsteps, indicating that it would take a different approach.

"I believe our strong margin performance this quarter shows that you don't need to send unilateral letters to your suppliers to do well in this business," Medline said. "We try to treat our supplier partners with respect and transparency."

Overall, Empire's third quarter profit increased to $176.3 million from $120.5 million a year earlier amid higher sales.

Par Bret Bundale (11/03/2021)

Source : Toronto Star (Via The Canadian Press)

Photo : Capture d'écran (Site Internet Sobeys)

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