Empire Company LTD (EMP.A)

Empire Company LTD is one of Canada's big 3 grocers besides Metro Inc and Loblaw Companies. It holds roughly 23% of the Canadian market for food retailing well behind Loblaw Companies at 40%. It is still headquartered in the small town of Stellarton, Nova Scotia despite efforts by the province of Ontario to get the company to relocate there (Nova Scotia helped pay for Sobeys Atlantic newest head office).

History

In 1946 Sobeys Frank Sobey purchased the Barker's chain of 8 stores and a warehouse (before then they company operated only a couple small stores). ^[1]

In November of 1999 Sobeys tookover the Oshawa Group which parented the banners IGA and Price Chopper. ^[2] The acquisition of Oshawa Group triped company revenue and helped push sales past $10 billion in 2000.

Sobeys Stores Limited was publicly traded between December 1999 and June 2007; In June 2007 Empire Company paid $1.06 billion for the shares it didn't already own (28%).^[3]

Financials

Nearly all of Empire's revenue ($7.9632 of $8.05 billion in 3Q12 + 4Q12) and profit ($154.1 of $172m in 3Q12 + 4Q12). Prior to the divestment of 27.5% of Wajax Income Fund, invesetment contributed about 0.5% more to revenue.

Discount Food Market

In 2011 Sobeys launched FreshCo when it replaced a couple dozen Price Chopper locations with the new FreshCo concept in Ontario. By 2012 the number of locations grew to 57. The new stores will compete directly with No Frills (Metro's discount banner is Food Basics). ^[4]

Non-Food Operations

The company's gas station business (236 of the 276 locations were recently purchased from Shell) is managed by Sobeys. A big reason for the acquisition was so that Sobeys could expand its Needs convenience store franchise. The move makes Sobeys more horizontally integrated and adds more value to its Compliments private label.

Deal With Target

In 2011 Target (TGT) picked Sobeys as its provider of most of the food products used in its stores. The deal most certainly gives more credibility to Sobey's Compliments private label while also giving Sobeys an edge over Wal-Mart (WMT).

Sobeys-affiliated food retailers (companies, brands)

Sobeys, FreshCo, Foodland, IGA, IGA Extra (Quebec only), Thrifty Fods (British Columbia only), Fast Fuel gas stations (Atlantic Canada only), Shell gas stations (189 in Quebec, rest in maritimes), Needs convenience stores, Price Choppers, Boni Choix (Quebec), Tradition (Quebec), Lawtons Drug Stores (maritimes only, no plan to expand into the rest of Canada), LCBO liquor stores. more info ^[5]

References

1. ↑ Recently dismantled Sobeys landmark had a history (December 2, 2011).
2. ↑ Company Spotlight: Sobeys (June 21, 2012).
3. ↑ grocerynews.org: Sobeys history (2012).
4. ↑ loblaws sobeys competition. Retrieved on July 2, 2012.
5. ↑ Loblaws Sobeys. Retrieved on July 2, 2012.