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07/23/2020

Empire growth strategy earmarks private brand expansion

Dan Ochwat
Executive Editor
Dan Ochwat profile picture
Farm Boy's store brand cheesecake

Canadian company Empire, the parent of Sobeys, outlined a three-year plan to deliver an incremental $500 million in annualized EBITDA by 2023 — and key to this plan is private brand expansion.

The company said over the past two years there has been a focus on all of its retail stores across Sobeys, Farm Boy and FreshCo to improve the positioning and branding of its private brand programs, resulting in strong consumer response. Empire added that penetration of its private brands has been growing faster than the industry for all of fiscal 2020, which has been further amplified during the pandemic. Empire said it’s time to review its private brands and determine which categories and banners will receive an expanded assortment. 

The company said a key to its growth strategy is to work with suppliers to further grow sales of private brands through increased distribution, shelf placement and product innovation.

The new three-year strategy is dubbed Project Horizon, a follow-up to the company’s previous three-year plan called Project Sunrise. In that plan, the company said it reached a target to save on $550 million over its retail network.

In this new plan, other tactics include:

  • Store investments. Empire will invest in store renovations and is prioritizing store expansion of its FreshCo and Farm Boy banners. The retailer expects to open 20 new Farm Boy stores in Ontario, convert 30-35 conventional stores to FreshCo in Western Canada, and open 10-15 FreshCo stores in Western Canada;
  • Category resets. Inside stores, the company will take a closer look at improving sales per square foot by utilizing advanced analytics to drive improvements in customer facing shelf sets, store footprints, store promotions and product availability on the shelf.
Empire will expand its e-commerce offering.
  • E-commerce. Empire will accelerate its for the remaining two Voilà e-commerce CFCs – for a total of four CFCs across Canada – and introducing Ocado's proven store pick solution; and
  • Personalization. Investing in technology and analytics that can provide customers a more personalized shopping experience will be a key, with a goal to deploy a world-class personalized communication program and custom offers to improve shopper engagement.

As with Project Sunrise, savings will be part of Project Horizon, too, looking at ways to strategically source, build merchandising efficiencies, optimize supply chain productivity and more.

"Empire's strategy will be delivered by our incredible team of 127,000 teammates and franchisee partners from coast-to-coast. Diversity, equity and inclusion efforts that drive tangible social and organizational change within our company and the communities we serve will be an important priority to our team," said Michael Medline, president and CEO of Empire.