E-commerce Demand Softens; Sobeys Cuts Delivery
Empire Co. Ltd., parent of Sobeys, posted a $385 million quarterly loss after closing its Voilà grocery delivery facilities in Alberta and pausing e-commerce expansion in Vancouver. This signals a cautionary note for North American warehouse demand, suggesting some overcapacity in last-mile logistics built up during the pandemic era. Expect heightened scrutiny from e-commerce tenants on new leases, with a shift from speculative expansion to optimizing existing footprints.
Sobeys' parent, Empire, attributed the $385 million loss to restructuring and asset impairment charges related to the e-commerce changes. The closure impacts approximately 85 jobs at the Calgary Customer Fulfillment Centre, which opened in 2022 with the promise of same-day delivery. The move reflects a broader cooling in online grocery demand after a pandemic-fueled surge. Competitors like Instacart and Amazon have also faced challenges in maintaining growth rates and profitability in the online grocery sector. Voilà by Sobeys continues to operate in other regions, including throughout Ontario and Quebec. Empire is focusing on refining its e-commerce strategy and optimizing its existing infrastructure to improve efficiency and reduce costs.
