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Profit at Sobeys parent Empire Co. Ltd. dipped slightly in its first quarter, despite a boost in sales fuelled by the worst food inflation in decades.
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Sales at Empire — a network of roughly 1,600 stores, including Farm Boy, IGA, Safeway and Foodland — rose to $7.9 billion in its first quarter, ended Aug. 6, up 4.1 per cent compared to the same period last year. The jump came from higher fuel sales and food inflation, as well as its expansion of FreshCo in Western Canada, the company said in a financial update on Thursday.
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Discount stores like FreshCo have been siphoning sales away from more conventional grocers this year, because more shoppers are seeking bargains as household food bills climb higher and higher. In its latest Consumer Price Index last month, Statistics Canada found grocery prices were up 9.9 per cent year-over-year in July.
But Empire’s profit dropped to $187.5 million, down $1 million or 0.5 per cent compared to last year. Earnings per share was 71 cents in the quarter, below forecasts of 74 cents, but one cent higher than the previous year.
