Grocery company
Empire president and chief executive
"This is actually masking the strength of our bricks and mortar business," he told analysts on the company's fourth-quarter earnings call Thursday.
Medline said Empire had planned a phased timeline for opening its various fulfilment centres, which was designed to protect its profitability levels. He said the company hoped "rapid growth" in grocery e-commerce would compensate for the initial operating losses at the fulfilment centres.
But all three existing warehouses are still losing money, said chief financial officer
"That's absolutely in our expectations, but they're all heading in the right direction," he said.
Along with halting plans for its fourth location, Medline said Empire is ending the mutual exclusivity agreement it signed in 2018 with British online grocery company
As a result of ending the deal early, he said Empire will incur a one-time
"We are doing all sorts of things to make e-commerce more profitable for us," Medline said.
"But we can't wait for that. We owe it to our investors to become much more profitable year-after-year and then make this one of our best businesses in terms of returns."
Medline said he has two theories of why grocery e-commerce hasn't caught on in
He said
The second reason, which he said is open to debate, is that grocery e-commerce got off to a rough start during the early days of the COVID-19 pandemic.
"When Canadians really needed to count on grocery e-commerce during the worst days of the pandemic, it stunk," said Medline, recalling "terrible" offerings and substitutions.
"People were just trying to get food to people in crisis and I understand that. But I think that hurt the brand."
The parent company of the
The increased payment to shareholders came as the
Sales for the quarter totalled
Same-store sales fell 0.3 per cent compared with the same quarter last year, while same-store sales, excluding fuel sales, rose 0.2 per cent.
Medline said consumer confidence remained low in the quarter due to the "hangover" of inflation and elevated interest rates. Shoppers remained careful with their spending, he said, despite food inflation continuing its downward trend to reach 1.4 per cent in April.
He said the
"We expect to see customers adding more items in their basket and trading up," Medline said.
"We are currently more optimistic about the market and our prospects than we have been in a long time. We expect that improvements will be gradual, but inexorable."
On an adjusted basis, Empire said it earned
This report by The Canadian Press was first published
Companies in this story: (TSX:EMP.A)
© 2024 The Canadian Press. All rights reserved., source