A Voilà grocery deliver van in Vaughan, Ont., in 2019. Sobeys parent Empire says it is closing its Voilà e-commerce facilities in Alberta.Fred Lum
Sobeys parent Empire Co. Ltd. EMP-A-T is shuttering its Voilà e-commerce facilities in Alberta and will take a $750-million writedown on the business, saying the financial results from its online grocery expansion “have not met the company’s financial expectations.”
In a news release Wednesday, the Stellarton, N.S.-based grocer said the size of the e-commerce market in Alberta has proven “smaller than originally anticipated.”
Empire is immediately closing its fulfilment centre in the Calgary area – less than three years after it opened – as well as a smaller facility in Edmonton that supported the Voilà business. Instead of operating the online service through its own fulfilment network in Alberta, the company will turn instead to expanded partnerships with third-party delivery providers.
The company also announced on Wednesday that it will launch a new partnership with DoorDash in the coming months.
Empire will record approximately $750-million in non-cash impairment and related cash charges in its fiscal third quarter, as it rationalizes underperformance of its online business.
The retailer expects the changes to its e-commerce strategy to contribute roughly $95-million to its annualized operating income in its next fiscal year.
Empire had previously acknowledged that the e-commerce business was not performing as well as executives had expected when they first launched Voilà in 2020, amid a COVID-19-fuelled surge in demand for online services.
In 2024, Empire paused the opening of its fourth distribution centre, in Vancouver, which was intended to serve Voilà customers in that region.
At the time, then chief executive officer Michael Medline said Voilà was “losing more money than we had initially estimated, and this is actually masking the strength of our bricks-and-mortar business.”
The Vancouver development remains paused, the company wrote in its Wednesday release. Its two other Voilà fulfilment centres in Toronto and Montreal continue to operate, and the service is popular in those regions, president and CEO Pierre St-Laurent wrote in Wednesday’s release.
“This is just the beginning of the next chapter in reshaping our e-commerce strategy as we respond to the evolving needs and expectations of our customers,” he wrote.