According to Empire Cos., following Sobeys’ decision to take control of ordering and inventory at its acquired Safeway locations in Western Canada, the grocer has experienced a decline in margins and profits in its first quarter.
In a statement to analysts, Empire and Sobeys CEO Marc Poulin said, “Although we had identified the various risks associated with integration, including the amount and pace of change required, we underestimated the impact and the time needed for the organization to adapt to those changes. This had a clear and negative impact on our first quarter results.”
According to Poulin, the company had identified that the main issue responsible for the decline in profits is a lack of follow-up training for former Safeway workers. As a result, the grocer has garnered resources in order to elevate performance levels, adding that the situation will be stabilized after “a few quarters for sure.”
Poulin adds that former Safeway workers had difficulties with Sobeys policies concerning over-ordered fresh items, which resulted in increased costs for shrink and issues running promotions.
