In a significant restructuring move, Empire Co. Ltd., the parent company of Sobeys, has announced the closure of its Voilà grocery delivery facilities in Alberta and a halt to the expansion of its online service in the Vancouver region. The Stellarton, Nova Scotia-based firm disclosed that it will incur a substantial writedown of $750 million in its fiscal third quarter due to these changes. The company anticipates that the realignment will yield approximately $95 million in annualised operating income by fiscal 2027.
Challenges in the Alberta Market
Empire’s decision comes in response to disappointing financial performance from its e-commerce operations in Alberta, which failed to meet the company’s expectations. A statement released on Wednesday afternoon highlighted that the size of the Alberta grocery e-commerce market and its potential for growth were not as robust as initially projected. Consequently, the customer fulfilment centres located in Calgary and Edmonton will be shut down immediately.
Moreover, the company will continue to pause its plans for a new warehouse in Vancouver, which it had previously announced. Despite these setbacks in Western Canada, Voilà will remain operational in Ontario and Quebec, where the service has been experiencing steady growth.
New Partnerships and Service Enhancements
To better serve its customers in Western Canada, Empire intends to pivot towards same-day delivery options through third-party partnerships. A notable collaboration with the delivery app DoorDash is set to roll out in the coming months, providing a fresh avenue for customers seeking grocery delivery services.
Pierre St-Laurent, the company’s Chief Executive Officer, emphasised that these adjustments are part of a broader strategy to adapt to evolving customer needs and preferences. “Customers in Ontario and Quebec love Voilà, and while these decisions were challenging, they will ultimately support the long-term growth and profitability of our e-commerce business,” he stated.
The Future of Voilà
Since its launch in 2020, Voilà has aimed to redefine grocery shopping through online delivery platforms. As the market landscape shifts, Empire is taking decisive steps to ensure that its offerings remain competitive and aligned with consumer expectations. While the closure of facilities in Alberta marks a significant change, the ongoing operations in Quebec and Ontario indicate a commitment to areas where demand remains strong.
As Empire Co. Ltd. navigates these challenges, it aims to leverage its existing strengths while exploring new partnerships that could enhance its service offerings. The focus now lies on refining its e-commerce strategy to foster growth in a competitive market.
Why it Matters
The closure of Voilà’s facilities in Alberta underscores the volatility of the grocery e-commerce sector and the challenges that companies face in adapting to market demands. This strategic pivot not only highlights the importance of understanding regional consumer behaviour but also reflects the broader trend of businesses needing to remain agile in the ever-changing retail landscape. As Empire recalibrates its operations, the implications for jobs, local economies, and consumer choice in Alberta will be significant, raising questions about the future of grocery delivery services amidst shifting market dynamics.
