Medline says that having good alternatives in most categories, Empire with multiple banners across the country, has the hardest to replace the product.
“In Canada, in the winter, we don’t always have viable options,” he said.
“If the product is no longer competitive over time, we can see the impact here by increasing costs or reducing the classification.”
However, Medline said Empire is working with suppliers to ensure unnecessary fees are not passed to customers, and said some vendors are proactive in finding solutions. He took the example of chocolate maker Lindt, which is transferring its production so that by this summer, all chocolates offered to Canada will come from Europe instead of the United States.
Canada is in a trade war with the United States, with Ottawa responding to two rounds of retaliatory tariffs on U.S. imports after President Donald Trump imposed large tariffs on Canadian goods.
Medline said he believes empires and the industry as a whole can “work hard” and that they will not be highly affected by the tariffs, at least not directly.
“Ultimately, the biggest risk to us is really not our own business, but the impact on the Canadian economy as a whole,” he said.
“I don’t want to underestimate it. A weaker consumption environment will hurt the entire retail industry.”
Empire reported that profits in the third quarter were $146.1 million as sales rose during the period.
The parent company of grocery retailer Sobeys said it had profits of 62 cents per share for the 13-week period ending February 1, compared with a profit of $134.2 million or 54 cents per diluted stock a year ago.
According to the adjusted Empire, the Empire said it earned 62 cents per diluted share in the latest quarter, the same as last year’s third quarter.
Total sales for the quarter were $7.73 billion, up from $7.49 billion a year ago.
Same-store sales increased by 2.5%, with the number of growth. Same-store sales growth (excluding fuel sales) was 2.6%.
The top performance of full-service and discount banners is stronger, and this growth is supported, Medline said. The gap between the two continues to decline, as mentioned earlier, the “green bud” that normalizes consumer behavior continues to grow.
Other signs of this normalization include items such as meat and produce, growth in basket sizes and a decline in people who choose discounted items, he said.
Another sign is that consumers shop in fewer stores, said Pierre Stlaurent, chief operating officer.
Medline also made sunny and transparent comments about Empire’s e-commerce business. He said total sales of grocer in-house services Voilà and third-party services such as Instacart and Ubereats rose by 72%.
“We are excited about the growth potential of our e-commerce business and believe we have the right assets to effectively serve this growing market,” he said.
The company’s operating revenue from investments and other businesses is mainly due to member participation in the site + loyalty program and reduced loyalty points.
“What we’re seeing in these times is high membership participation and very strong redemption rates,” said Chief Financial Officer Matt Reindel.
Competitor Loblaw has taken a similar blow in recent results for the same reasons.
The Empire announced that Reidel would retire, and Constantine Pefanis took on the post in May.
During the call, Medline praised Reindel for his leadership during the pandemic and the subsequent inflation period.
