Between 2008 and 2011, 12-month (calendar year) sales at Empire-Sobeys limited rose 11.50% to $16.2416b 53 weeks ended 2Q12 (Nov 5) up from $15.6407b the previous year. That compares to only 1.5% for Loblaw Companies and 1.6% for Metro Inc. Since 2006 (the first full year that A&P Canada was a part of Metro) fiscal year Metro sales ($11.431b) have increased by only 4.3% compared to 24.7% for Sobey's (minor boost for Sobeys came in 2007 when it acquired BC chain Thrifty Foods for $260M; for the past seven years Sobeys has led the industry in same-store sales growth). In 2013 Metro Inc net earnings jumped 47.5% to $721.6m however $266.4m was gained from the disposal of an 11% stake in Couche Tard (world's largest convenience store operator). May 4, 2014 Sobeys stores occupied 38.7 mil ft2 (up from 29.9; up from 29.3m) 19.6% owned (up from 15.8%).
in its fiscal 2014 report Sobeys announced the closure of 50 stores (1.5m square feet) 30 in Western Canada. the closures will improve the company's bottom line because the stores are consistently underperforming - administrative costs for this $169.8m (incl $137.1m severance) are already accounted for in 2014 fourth quarter results ; will reduce future sales company-wide by approximately $400 million.
quarterly dividend - Sobeys dividend for 2Q2016 was 10 cents (20c for the half up from 18c) unchanged in 3 months, up from 9c six months earlier. By comparison Loblaws dividend for the same quarter was 25c (up from 24c six months earlier); Metro Inc dividend 14c +20%.
Sobeys dividends were higher in CY2014: dividend for 2Q2015 was 27 cents (54c for the half up from 52c), same as three months earlier, up from 26c nine months earlier, up from 24c in 3q2013 (24c was unchanged from 2q13 but up from 22.5 cents a share in 3rd, 4th qts of 2012). This is higher than Loblaws (3Q14 24.5c; up from 4Q13 24.0c; up from 1Q13 22c; dividend had been stuck at 21c for over 6 consecutive sessions until 4Q12 when it was increased to 22c) and Metro (4Q14 30c; up from 25c Dec.21 same as Jul 2013/Dec 2012 qtr but up vs previous year 21c q2q).
Fiscal 2015, Empire annual revenue up 20.6% to 23.9288b (same-store sales up 1.4% or 1.9% excl gas price, net earnings up 78.0% adj $518.9m +32.6%) Fiscal 2014, Empire annual revenue up 26.0% to $21.0b (Safeway accounted for all but 2.2% of the growth, same-store sales flat 0.0% for the first time in 8 years). Fiscal 2013, Empire annual revenue up 8.4% to $17.61b ($17.403b from Sobeys +8.4%, Sobeys same-store sales +1.3%). Fiscal 2012, Empire revenue up 1.8% to $16.25b ($16.06b from Sobeys, same-store sales +1.4%). Fiscal 2011, revenue at Empire up 3% compared to only 1.3% at Loblaws. Sobeys sales growth 1) Acquisitions (2013 Safeway, 1999 Oshawa Foods) 2) Larger new stores (square footage, closing the gap between it and Superstore 3) Modest inflation 4) Product/services innovation. Latest fiscal year % revenue from other operations - Sobeys 1.2%, Loblaws 3.2% (excl eliminations). Interim food retailing sales surpass $8b 1h2012 total $8.09B (+3.3%), investment revenue to $106.4m (+1.4%). Funded debt: 2015: $2295.9 (-34.4%) 2014: $3500.9 (+261.0%) 3q2014: $1140.5m (+17.1%) 2013: $969.5m (-14.3%), 2012: $1130.8m (-1.9%), 2011: $1152.4m (-4.3%), 2010: $1204.5m (down). Long term debt: 2015 4q: $2242.0 (-31.7%) 2014 4q: $3279.9 (+258%) 3q: 3516.6m (+268%) 2013 4q: $915.9 (+3.0%) 3q: 954.6 (+13.5%) 1q: $870.3 2012: $889.1m (-18.5%), 2011: $1090.3m (+32.7%)
Sobeys ends fiscal 2013 on high note, ups quarterly dividend to 26c higher than Metro 25c, Loblaws 24c !
2015 annual same-store sales growth: Sobeys: 1.4% (vs 0.0%) Metro Inc 4.0% (vs 1.1%)
July 15, 2013 - Loblaw Cos acquires Shoppers Drug Mart for $6.7b cash/debt and $5.7b equity issue (gives Shoppers shareholders 29% of combined company). 1363 locations gives Loblaws 2348 stores total inc 1792 pharmacies (500 in-store). Deal boosts Loblaw profit margins but not grocery market share (only 10% of Shoppers revenue is from food). Loblaws gains national share in pharmacy prescriptions: 7% -> 25%. July 5 - Choice Properties (415 prop) more
Canadian retail food market - report dated Feb 19, 2014 - CY2013 retail food sales represent 19% of all retail sales ($89 billion +2.2% out of $483b billion +2.7%). 2007-2012 food sales up 19% with forecast compound annual rate of 1.2% through to 2017.
June 12, 2013 - Sobeys announces a C$5.8 billion deal has been made with Safeway for its 223 unit strong Canadian division (213 grocery stores + 10 liquor store). Western Canada is home to all but 6 of the locations (6 in Ontario). The deal is significant for Sobeys - becomes market leader in fast growing Alberta (locations -> 234; median income +21% vs national), and supermarkets in British Columbia beyond just Thrifty Foods (3 Sobeys -> 78 Sobeys + Safeway). Also included in the deal are 199 in store pharmacies, 10 liquor stores, 12 manufacturing plants, and 62 gas stations. The deal will be paid for in cash with funds coming from Empire equity issue and asset sales. Excluded from the deal is $300m of short term debt and 189 gas stations. 49 of the locations (plants + gas stations + liquor + grocery) are in Saskatchewan (16) and Manitoba (33). Safeway had revenues of $6.7b in the year ending March 23, 2013 up from $5.3 billion in 2011. Excluding all fuel stations Sobeys + Safeway = 1300 to 1523 (May 2013 stores down from 1315 -> 1300). pro forma annual revenue increases from $17b to $24b. more on the Safeway acquisition and my reaction June 27 - Empire Co sells theatre business in two transactions for $255m. Cineplex Odeon is paying $200m for 24 theatres in Atlantic Canada (170 screens) while Landmark Cinemas is taking the other 20 theatres in the rest of Canada for $55m. This deal was obviously made to finance the Safeway deal; Sobeys previously stated that $1b of the $5.8b needed will come from asset sales. Sobeys financed the Safeway deal with the following moves: An Empire's equity issue (July, 2013) in the amount of $1.85b.. Sobeys bonds sold in August raised $990m.. $990m from the sale of 70 Safeway properties to Crombie.. $1.97b from cash + credit. October 22 update - Competition Bureau forces Sobeys to sell 23 supermarkets as a condition of the deal. Only 13 of the grocery stores are part of the 213 acquired, the other 10 are Sobeys 7 IGA 1 PC 1 Thrify 1.
No Frills has been in business since 1978, its 152 Ontario stores have annual sales of about $3.4 billion but Loblaw Cos doesn't get to reap all the benefits given that the stores are franchised (not corporately run like Superstore). Only about 12% of the grocer market in the maritimes is in the discount market, that's in stark contrast to Ontario (40-45%) and Quebec (33%). (Grocery Trade Review June 2010 edition)
Keep in mind fiscal year end dates: Loblaws Dec 29, Sobeys May 2, Metro Sept 26 (2014/2015)
-> store size calculated using info provided in annual reports. Loblaws and Sobeys provided direct info; Metro was calculated using only Metro, Food Basics, Super C, Richelieu full service supermarkets, Sobeys data from Empire annual information forms 2012, 2011 editions. Second chart excludes 24 Fast Fuel, 236 Shell stations. Metro Inc operating income taken as ebit (ebitda + depreciation and ammortization).
sobeys food retailing capex: 2013- $508.1m 2012- $579.9m 2011- $520.8m 2010- $341.4m
2013: 194 of Metro Inc 564 stores (34%) operate in the discount food sector compared to 257 for Empire-Sobeys (20%, FreshCo/Foodland) and ~30% for Loblaws. Sobeys + Safeway = 1538 stores + 322 gas stations (236 shell, 24 fast fuel, 62 safeway gas) . FreshCo was launched on May 12, 2010 in Toronto. It started out by taking the former locations of Price Choppers stores (87 in Ontario). To celebrate, Sobeys offered new customers triple A beef.
2013: Sobeys same store sales growth of +0.6% in the final quarter of 2013 is down from +1.2%, +1.3%, +1.8% in the previous three quarters (3rd 2nd 1st) and +0.7% in 4q of previous year. By comparison same-store sales growth at Loblaw Cos each of the corresponding four quarters (most recent first) is +1.1%, +2.8%, -0.2%, -0.2%, +0.2%, -0.7% (2nd, 1st, 4th, 3rd, 2nd, 1st).
All three seemed to have their strongest quarters in terms of same-store sales in 1q2013: Loblaw +2.8% (Mar'13) vs Sobeys +1.8% (Aug'12), Metro +1.5% (Dec'13).
Fiscal 2013 Sobeys +1.3% vs +1.4%.
Sobeys 2011 same-store sales growth by quarter +1.2%, +1.9%, +1.7%, +0.7%. Looking at it from a calendar-year perspective, Loblaw Cos 1.3% in its 3q was lower than Sobeys 1.7% in its 1q. Sobeys led the industry in same store sales for seven consecutive years). For the investor out there consider this: Annual Sobeys dividends have grown consistently year in and year out, per share they were at 40c in 2004, 60c in 2007, 66c in 2008, 70c in 2009, 74c in 2010, 80c in 2011 and 92.1c in 2012 (45.6c 1H, 46.5c 2H), 95.0c in 2013 (45c 1H, 50c 2H), 52.0c in 1H 2014.
First Half Fiscal 2015 (ended Nov 1) : 26 weeks- net earnings of $240.0 million +2.5% (1q $123.1/2q $116.9) on group revenue of $12,217.8 million +35.6 (1q $6,227.7/2q $5,995.1). earnings much improved when considering only continuing operations: +67.7% total -> $240.0m; food retailing +57.9%-> $213.9m. revenue/earnings by segment: food: $9,011.7-> $12,217.8m +35.6% (1q $4,594.9/2q $4,416.8) , investments other $4.2m-> nil down. net earnings breakdown: food: $135.5m-> $213.9m (1q $113.5/2q $100.4) investments other $98.7m- >$26.1m (1q $9.6/2q $16.5). first half dividend: 54 cents (+2c), same-store sales up: half +1.6% (vs +0.1%), 2q +1.7% (vs +0.2%), 1q +1.3% (vs +0.1%), effective tax rate 25.2% 2q15 (vs 26.3% 2q14).
Fiscal 2014 (ended May 3) : 52 weeks- In just 2 quarters Canada Safeway has managed to boost Sobeys annual sales by $2.806 billion or 16.13% (total company sales up 20.6% to $21.0b). Organic growth by Sobeys accounted for $394.1 million of increase in sales (price inflation / new stores however same-store sales were flat on the year). Gross Profit: Safeway stores boosted gross profit and gross margin by $502.1m and +0.28% (23.46% vs 23.18% without) respectively; gross margin up to 23.93% vs 23.14% last year. Sobeys total gross profit increased by $1.003 billion or 25.0% from $4.013b last year. net earnings: Sobeys: +$349.2m adj (vs $325.3m) or -$87.4m undjusted / Safeweay +$78.9m. consolidated earnings: food retailing $121.8m (vs $334.2m), investments $113.6m (vs $45.3m) with $84.2m coming from discontinued operations ($78.2m from empire cinemas). fiscal 2014 free cash flow $869.1m (vs $430.2m). food retailing totals: revenue 20.99 billion (up from $17.4b).
13 week quarter: Empire adjusted net earnings are $131.3m (vs $95.7m) $112.1m from food retailing (vs $80.6m), $19.1m from investments (vs $15.1m). unadjusted, the company earned a mere $0.8 million (food retailing loss of -$17.6m vs +$87.4m combined with +$18.4m gain from investments (vs +$18.5m). total consolidated revenue: Food: $5937.0m (vs $4256.8m) ; investments: $0.5m (vs $0.6m). operating income: Food: $6.0m (vs $128.8m) , investments: $16.9m (vs $21.5m) down due to real estate partnerships ($10.9m vs $13.7m) / crombie reit oper.inc up $4.9-> $6.9 million. Adj net earnings: food: $112.2m (vs $80.6m) , investments: $19.1m (vs 415.1m). 4Q2014: Funded debt to capital ratio at 38.0% down from 40.6% , net earnings from continuing operations: $1.5m ($0.02 per share) vs $102.5m last year ($1.51 per share). free cash flow is $626.1m (vs $187.5m).
3Q2014 (ended February 1) : 12 weeks- The Safeway acquisition starts to show up in results both positively ($1.62b of the $1.73b in new sales attributable to Safeway / organic sales growth at 2.7%, $113.3m) and negatively (funded debt to capital ratio up 21.6-> 40.6% (funded debt to ebitda 8.5x, up from 16.8x) / effective tax rate up 27.7-> 72.6% [39 weeks tax rate 28.6% vs 27.1%] ). net earnings down thanks to higher finance costs, lower operating income, offset by lower income taxes : earnings $6.4m $0.07/share (vs $71.4m $1.05/share). adj earnings $77.3m 0.84/share (vs $75.8m $1.11/share). consolidated revenue up 40.4% ($4287.5-> $6017.6m), food retailing sales up 40.5% ($4274.2-> 6004.4m) [39 wks +14.6% -> $15016.1m); food retailing revenue using reclassifications +40.4% ($4284.8m-> $6017.1m) [ 39 wks up 14.6% $13134.2-> $15050.8m], adj ebitda up 37.5% ($201.8-> $277.4m). same store sales down -0.2% (vs +1.2% 3q13). by comparison ss sales was +0.6% for Loblaws / -0.5% for Metro. costs: finance costs up 198% $12.5-> $49.7m .. $33.8m in higher interest expense is main driver here (new debt from Safeway deal). Empire's total asset value is up 78.5% ! $6958.9m (Feb 2013) -> $12,420.7m (Feb 2014).
Investments Other (now quoted to exclude Empire theatres both for the current period and previous period - theatre operations now listed under discontinued operations) : revenue $0.5m (vs $0.7m).
Sobeys - the food retailing segment reported sales of $4,5949m (+2.2%) or $4,6060m when reclassification of lease revenue is included (+2.2%). food retailing profit: $79.2m (vs $95.7m -17.2%). Investments,other contributed $3.4m to sales (+$1.4m); consolidated revenue 4.6094b (+$100.3m). sales from discontinued operations bulk of which is Empire Theatres: +13.2% ($48.6-> $55.0m). total assets by segment Aug-Aug: food retailing $6455.1m (vs $6215.0m), other $2526.2m (vs $623.9m). Interest in Genstar, Crombie now at 42.7%, 40.7% respectively.
3Q2013 (ended February 3) Sobeys adj earnings +8% to $71.7m. Dividend steady at 24c, debt to capital ratio 24.6% -> 21.6%. Sobeys same-store sales up +1.2%. gross margin for the 39 week period down significantly (24.08% -> 23.03%) on account of lower margin fuel sales (excl that, gross margin steady at 24.25%). Quarterly revenue at Sobeys up by $348m -> $4.2848 billion; all but $97.1m of the increase in Sobeys revenue is attributable to the acquisition of 236 shell gas stations late 2012.
Loblaws 1q2013 (ended March 24, 2013) For the 12 weeks ended March 24, Loblaw Companies profited $171m on revenues of $7.202 billion (+3.8%) 86.4% or $229m of the $265m revenue growth came from retail sales ($7.037b +3.4%), impressive considering the national food consumer price index was up only 1.4% this quarter. A collapse of a factory in Bangladesh which housed Joe Fresh Style textile workers hit the company's brand reputation but the company remains optimistic about the situation: Loblaws has compensated families affected by the tragedy and is working to improve working conditions there.
The bad - Fourth quarter profit was down -17.82%; that despite both quarters being 12 weeks long. In the other three quarters (q3 q2 q1) profit was down -5.9%, -19.3%, -22.2%, respectively. Same-store sales growth: -0.2% (vs +0.9% the year before) which is disappointing considering Sobeys (+1.4%) and Metro (+1.2%) showed strong growth (investors should be asking this: why is competition affecting Loblaws more than Sobeys, Metro, Costco ?).X this year's amount.
Loblaws 2Q2012 (ended June 18, 2012) profited only C$159m in the second quarter of 2012, -19.3% lower vs 2q11, that despite quarterly revenue being +1.33% higher ($7.375b which is actually the highest quarterly revenue in the last 4 quarters). 18.6% of the increase in revenue ($18m/$79m) actually came from the financial services segment (nice considering financial services only accounts for 1.8% of total revenue).
98.1% of revenue orginated in retail where same-store sales fell -0.7%, gross profit fell -1.6% to $1.529b and operating income was 21.1% lower at $225m. Results were particularly disappointing when operating margin (3.3% down from 4.2%) and gross profit margin (22.5% vs 23.0%) are considered.
Good News regarding 1q12: Loblaws opened 25 new stores but closed only 5 resulting in a net addition of 0.6 million square feet of sales space = +1.2%.
Sales in clothing and other apparel was strong as was growth in revenue from gas stations (higher pump prices); Those factors compensated for flat sales in both food and drug products. There's been lots of negative pressure on Loblaws revenue stemming from flat food sales and lower sales in drugstore, apparel and general merchandise.
Food retailing market share in Canada among grocers: According to the Atlantic Farm Focus the supermarket industry in Canada is distributed among the Big 3 as follows: Loblaw Companies 43%, Sobeys 21%, Metro Inc 16% (supermarkets only account for about 2/3's of the food market). (Atlantic Farm Focus: Sobeys to supply Target)
--> new website launched at grocerynews.org --> indepth coverage of the grocery industry.
Loblaws Quarter ended Dec 2011 Though annual revenue (+2.7% to $31.25 b), ebitda (+5.5% to $2.083 b), profit (+13.9% to $769m), eps (+12.3% to $2.73) and same-store sales (+0.9%) were up across the board a closer look reveals problems. The 62c eps in the latest quarter missed analysts expectations of 66c, gross profit margin fell to 22.2% from 22.4% and the 3.6% sales increase in the 4q is attributable to an extra shopping day. But it did beat revenue projections of $7.24b ($7.37b).
more on Loblaws..
Also disconcerting is the fact that gross profit from the food retailing business (98.2% of Loblaw Cos sales) barely saw any gain on the year (0.49%) despite revenue rising to a record high (total company revenue surpassed $31b for the first time ever). An abberation? Financial services revenue growth of 24.7% in the 4q was due entirely to increased credit card use (Canadian household debt is among the highest in the world and there already are signs from Dec 2011 that Canadians are cutting back). Add to that the fact that basic earnings per share were up 5.1% in the 4q compared to 18.3% qoq increase in the 3q (eps averaged over each week comes in at 5.17c in the 4q vs 5.25c in the 3q). Maybe that's why investors responded to Loblaw's highest year-to-year revenue increase since a 4.8% rise back in 2008 by pushing the stock down 5.7% the day of the release. Overhaul of the IT & supply chain will cost it about $70m more in 2012 as it attempts to become more customer oriented. Some of the positives to consider: same store sales grew in 2011 (+0.9%) something that didn't happen in 2010 (-0.6%) or 2009 (-1.1%). In 3Q 2011 Loblaws profited $236M in the quarter ended October 2011, an increase of 19.8% over the previous year despite sales increasing by only 2.0% to $9.7B; that was only the second quarter to quarter increase in revenue since a 3.5% decrease back in March.
Empire Theatres As of February 3, 2013 there are 52 locations with 434 screens which is down versus the previous quarter. November 3, 2012 Empire-Sobeys owned 53 separate cinamas across Canada (up from 51) consisting of 438 screens (up from 386 a year earlier). It the second largest movie exhibitor in the country ! Between May 2010 and May 2011 no net additional theater locations were reported by the company, but that changed in 2012 when 2 were added. In the fourth quarter of fiscal 2011 sobeys attributed the drop of 13.8% in sales from other operations to lower box office attendance due to movies having less consumer appeal.
Sobeys parent Empire Company Limited has actually been controlled by the Sobeys clan since 1947 when Frank Sobey bought it for its land and ability to be transformed into an investment company (1947 was also the year Sobeys opened its first supermarket store in Pictou).
Brand Diversification and the Ethnic Market
Sobeys has also been more open to diversification
of its brands; After Metro acquired A&P it spent $200M to completely convert Loeb/A&P locations into Metro stores, however Sobeys chose a different route; After acquiring Price Choppers in the 1990's it left the brand largely intact for more than a decade before rebranding it as FreshCo, the other acquisition IGA/Oshawa Group ($1.5B deal in 1998 tripled its size and made it into a national company) was left intact. Initially, Sobeys did this in a bid to win over customers through customer appreciation efforts however brand diversification appears to have benefited Sobeys in the long run by allowing it to tap into different markets more effectively (Loblaws gained a bigger market share after it acquired T&T and launched No Frills in 1978 and now Sobeys is doing the same with FreshCo). FreshCo has proven popular among ethnic customers, a consumer base that already represents over 35% of shoppers in Ontario and will represent 31% of all Canadians by 2031. Only about 12% of the grocery market in the maritimes is in the discount market, that's in stark contrast to Ontario (45%) and Quebec (33%). In the discount market Loblaw's No Frills leads all other grocers, just the 152 No Frills stores in Ontario made $3.4B in sales last year more than Sobey's FreshCo and Metro's Food Basics combined. (June 2010: Grocery Trade Review)
Sobeys also has a significant stake in Canadian real estate Crombie REIT: interest was 42.7% in August 2013, 42.8% in May 2013, 42.9% in Feb 2013, 43.0% in Nov 2012, 44.6% in Feb 2012, 45.9% late 2011, 46.5% Jan 2011. Owns 40.7% of Genstar Development Partnership. With Canadian real estate prices climbing (average home price up 6.5% in September/# of properties sold up 2.7% qoq) those investments are bound to pay off. Crombie Reit's properties include both high end assets (Barrington Place Shops, Cogswell Tower, CIBC Skyscraper in Halifax) and more traditional retail assets (Greenfield Park IGA plaza, Quebec). Sobeys also holds 100% ownership of Canada's second largest chain of movie theaters, Empire Theatres (Sobeys has operated cinemas since 1984). 2011 is also the year Sobeys converted most of its mainline locations into 24 hour supermarkets taking away from Superstore a key competitive advantage. About 85% of Empire's assets are associated with the food retailing business). Sobeys first reached $1 billion in sales in 1987, in 1999 (2000 fiscal year) Empire-Sobeys sales surpassed $10 billion for the first time, reflecting the first full year the Oshawa Group was part of it. Although revenue increased 75% that year, net income fell 35.7% to $86.7m.
Food retailing makes up 98% of sales and 90% of operating income (2011 & 2010). The commercial real estate business contributes about 30% of funds from real estate operations even though it only contributes less than 15% of real estate revenue. Food Retailing: net debt/net total capital ratio was at its lowest level in 2011, hitting 13.4% it was as high as 32% just three years ago (2008). There are about 289 standalone Sobeys locations across Canada (23% of the company's locations). In fiscal 2011 57 freschco stores were opened, which exceeds units opened by main competitor No Frills.
Other Key Info
-> In 1999 it acquired the Oshawa Group, owner of IGA Canada ($1.5b increased sales by about 75% or $4b). In March 2002 Sobeys sold Serca Foodservice formerly part of Oshawa Foods to SYSCO for $411M. Since March 2006 Sobeys sold 105 properties to Crombie REIT raising 897M in 2 transactions. In 2011 Sobeys divested itself of Wajax stock by selling 27.5% of Wajax Income Fund for $121.3M (used the proceeds to pay down debt). The market value of all of its real estate investment holdings was 451.2M on May 7, 2011 comapred to $487.7M a year earlier (decrease was due completely to the divestment of its Wajax investment which was worth 117.9M in 2010).
-> Sobeys went private in 2007 when it became a subsidiary of Empire Company Limited following Empire's purchase of $1.06B worth of Sobeys outstanding common shares bringing its interest up to 100%. The company's 2011 revenue is 61% higher than it was in 2002 (145% increase in book value per share: 47.76).
-> In 2010 Sobeys lowered its debt to capital ratio from 32.7% down to 29.3% and consequently (in May) both Standard & Poor's and DBRS raised Sobeys credit rating. During fiscal 2010 food retailing/real estate represented 94% of net income. At the end of 2010 total locations (food retailing) under the various banners were 1,334 (28.1m square feet) in 836 communities. In 2011 free cash flow fell to $132.6M from 350.1M. In 2011 the company expanded 12 stores (down from 13 in 2010/11 in 2009), opened 44 (up from 41 in 2010/47 in 2009) and closed 39 locations (down from 52 in 2010).
Since 2001, fiscal year dividends have more than quadrupled from 20c to over 80c a share.
Sobeys locations May 2, 2015
Sobeys 254 -29, IGA 313 +3 (187/126) Foodland 198 +8, Safeway 185 -15, Needs 111 -8, Benichoix 89 -1, FreshCo 88 +3, Lawtons 79 +1, Tradition 38 +2, Thrifty Foods 27, RachelBery 21 +0, Benisoir 6, Voisin 1, gas 316 +24, Price Chopper 3, cash carry 7 -1, lcbo 52 +9, SW liquor 11, total 1803 -17 (vs +252 2014)
for fiscal 2015 effective tax rate: Sobeys 25.6% (vs 18.6%, 26.3%); Metro Inc 23.7 4q (vs 24.8% 22.0%)
same store sales growth using two most recent quarterly releases January 2016: Sobeys: 0.1%/0.5% (vs +1.7/+1.3%) Loblaw 1.3%/2.1% (vs +2.6%/+1.8%) Metro 2.8%/3.4% (vs +3.1%/+1.0%)
Sobeys avg # of shares traded was highest in 2010 68.4m vs 67.9m fiscal 2013; 68.2m 2011, 65.8m 2009.
franchised locations Dec 2015: Loblaw Cos 529 (2014: 527; 2013: 496, 2013: 469), Sobeys 895 (2014: 849, 2013: 822, 2012: 839, 2011: 708).
Metro Inc total locations February 2016 : 621 large grocery (343 Metro, 89 Super C, 124 Food Basics, 65 Richelieu) 288 small grocery (151 marche ami, 137 marche extra), 427 convenience stores.
Metro Inc total locations September 2013 : supermarkets 635 (-6 : Metro 358 [-12], Super C 85, Food Basics 116, Richelieu 76); grocery 277 (ami 81, extra 196); convenience 415.
Market Share: using most recent food retailing data available for Canada as a guide and Loblaw claims that 14m or 40% of Canadians shop there each week, we can estimate Loblaws share at 32% ($28-29b in food sales out of $87b in Canada), as of 2013 Sobeys is at 19% (58% as much food revenue as Loblaws ~$15b vs ~$28b), and Metro is at 15% ($12b).
Shoppers Drug Mart 1h2013 results: same store +2.2%, pharmacy +3.2% $2.415b, else +3.9% $2.609b, prescr +7.1%. 2012 full year same-store sales growth 2.2% versus -0.2% for Loblaw Cos.
2014 Sobeys divestments. July 8: sells four Safeway milk and dairy products making facilities to Agropur Cooperative for $344.2 million; December 2 sells two bread manufacturing facilities to Canada Bread Company for $27.8m.
3 months ended November 2011: grocery prices declined 1% at Sobeys despite raw material costs going up, a consequence of intensified competition.
Loblaws goal for its apparel unit, Joe Fresh Style is $1 billion in annual sales. Loblaws is expected to spend $110m in 2012 just on improving information technology and product promotions. In 2012 a partnership was formed with JC Penny - Loblaws clothing line Joe Fresh now sold at 700 JC Penny locations throughout the United States.
Brands: Metro - Selection, Irresistables; Sobeys: Compliments (previously known as Our Compliments); Loblaws: President's Choice, Noname
July 8, 2014 - Sobeys sells 4 Safeway Dairy processing facilities to Agropur Cooperative for $344.2 million money used to pay down bank borrowings.
As of Feb 3, 2013 Empire Theaters operates 52 theaters consisting of 434 screens which is down from 53 and 438 Nov 2012. Sobeys was in the cinema business from 1984 until 2013. Divestments June 27, 2013 - Theatres sold for $255m - $200m from Cineplex, $55m from Landmark. money is used to finance Safeway takeover. A total of 26 theaters/218 screens were transferred to Cineplex (24/170 in Atlantic Canada), another 20/179 screens went to Landmark Cinemas (Western Canada). In total, 47 theatres/397 screens were transferred from Sobeys to Cineplex, Landmark.
November 7, 2012 - Petroleum and natural gas properties sold for $17.1m
Empire other investments August 2013 Crombie $527.1m (42.7%), Genstar 197.5m (40.0% May), cdcp $9.6m (+2m), US/Can real estate partnerships $209.8m (+51.5%) May-May 2013 Crombie +$122m +23.4%, investment in associates +$94.2m +30.0%. In 1q2014 Crombie interest gave Sobeys $6.7m oper. inc. +20% vs 1q2013.
1339 locations (2012) but still room to grow - Sobeys added only 2 stores in Alberta in 2011 (fastest growing province - update Empire takeover of Safeway vaults it to the top in Alberta, still though, Sobeys should be pushing for more organic growth), has yet to introduce FreshCo to the maritimes home to 55% of corporate stores but only 5% of those franchised; Perhaps Sobeys is concerned about the drop in food prices that would cause; only 12% of the maritime grocer market is in discount foods. Organic growth in BC began a few years ago (3 Sobeys standalone stores + 2 IGA) but hasn't taken off. Same-store sales growth weak in 2Q2012 if extra shopping week is excluded, in my opinion they need to build up the pricier organic, private-label products (took time for Loblaws but paid off in 2008 when gross profit jumped). Private label products will do well thanks to.....
On September 23, 2011 Target Canada announced that it had reached an agreement with Sobeys in which Sobeys will become the primary supplier of grocery items. The deal is big for Sobeys because for the first time it will be able to sell its own private label items outside of franchised/corporate locations Sobeys, FreschCo, IGA, etc.
A similar agreement made in the US between Target and SuperValu Inc significantly boosted SuperValu's revenue and market access (operates over 2,500 locations but that number nearly doubles when Target and other stores it serves as primary distributor are included). 125-135 Target locations are slated to open begining in 2013. Since the news broke about a month ago Sobey's stock is up 6.2%.
Sobeys IGA locations more Environmentally Friendly = Excess Carbon Credits
On November 15, 2011 announced that it had reached a deal with the National Bank of Canada involving the sale of 15,000 tonnes worth of CO2 greenhouse gas emission gas credits (annually) to the bank, allowing the bank to be a neutral emitter. At present Sobeys has an excess of credits in Quebec due to improvements at IGA locations where it sucessfully replaced harmful refrigeration gasses.
December 15, 2011: Sobeys announces the purchase of 250 Shell gas stations in Atlantic Canada (50) & Quebec (200); However, when the deal closed on March 15th the number of stations was lowered to 236 47 of which are in Atlantic Canada (the rest in Quebec). The acquisition cost Sobeys $215 million. Positive effects of the Shell deal: 1) Greatly expands cash flow for Empire's non food business segment. 2) The gas stations will give Sobey's convenience store business more leverage. 3) Gas stations enjoy high gross profit margins, something that Sobeys hasn't been able to improve (stuck at around 24%, a low ebitda margin of 2.7% was cited as being main reason it sold Serca food distribution business back in 2001 for $440M). Shell is supplied with refined oil by Imperial Oil which is controlled by the world's biggest oil company Exxon Mobil (65% ownership). The acquisition increases Empire-Sobey's annual fuel volumes by 1 billion litres.
In 2012 Empire Cinemas transfers $7.6m worth of projectors to the Canadian Digital Cinema Partnership (cdcp) in exchange for a 21.8% interest in cdcp. Voting shares in cdpc: Empire 50%, Cineplex 50%
In the discount supermarket sector Sobeys' FreschCo competes directly with Loblaw's No Frills in Ontario (though FreshCo hasn't yet been introduced to key areas such as Halifax), in Quebec discount there's also Metro's Food Basics and Super C. Superstore (Real Canadian or Atlantic depending on the region, the superstore brand represents 1/5th of Loblaw's corporate run locations), Provigo (taken over in 1998, presently Provigo is the largest Loblaw brand by locations, twice as many as Superstore), Maxi, Great Food and Zehr's take on Sobeys, IGA and Foodland head to head in regular priced food retailing in central and eastern Canada. In Ontario and Quebec there's also Metro's Food Basics and Super C.
Sales at Sobeys first reached $1 billion in 1987. In 1999 (2000 fiscal year) Empire-Sobeys sales surpassed $10 billion for the first time, reflecting the first full year the Oshawa Group was part of it.
(removal of non-essential items to keep prices low) no-frills/valuemart/freshmart/wholesale club,
that compares to less than 20% (257/1271) for Sobeys (Thrifty Foods, Freshco) and 34% for Metro (end of 2011: 79 Super C, 115 Food Basics, Metro total 564).
archived images below