Crombie REIT (CRR-UN-T) announced it expects “no material financial impact” as a result of Empire Co. Ltd.'s decision to immediately close its e-commerce customer fulfillment centre in Calgary and a satellite facility in Edmonton.

Empire, one of Canada's largest grocery retailers, made the closure announcement on Wednesday, citing slower-than-forecast growth in the e-commerce segment in Western Canada. Empire had also already paused development of another e-commerce fulfillment centre in the Metro Vancouver area.

The facilities had all been operating, or envisioned, to support its Voilà e-commerce vertical.

Empire plans to continue its existing Voilà operations in Ontario and Quebec as currently set up. E-commerce customers in Western Canada will be serviced through a new partnership with delivery service DoorDash, the company stated. 

"We remain highly committed to grocery e-commerce in Canada and on continuing to make online shopping more convenient for our customers, while delivering immediate bottom-line improvements to our e-commerce business," Empire president and CEO Pierre St-Laurent said in the announcement.

The Calgary e-commerce facility

The Calgary distribution facility, which spans 304,000 square feet of GLA, remains fully leased to Empire, Crombie REIT stated.

Crombie, which is majority owned by Empire and owns and manages a significant portion of the retailer’s real estate, has a portfolio of 2.46 million square feet of retail-related industrial properties. That portfolio is 100 per cent occupied.

The Edmonton e-commerce centre was a smaller, support operation.

“Empire's Alberta e-commerce operations have not met the company's financial expectations, largely due to the Alberta grocery e-commerce market's size and expansion being smaller than originally anticipated,” the announcement states. “Empire will continue to support customers in Western Canada who prefer to shop online through its third-party partnerships.”

Empire notes the closures are “not expected to have a material impact on the company's same store-sales growth.”

The company will incur non-cash impairment and related cash charges in Q3 2026 of approximately $750 million as a result of the rationalization and financial underperformance of its e-commerce network. 

It forecasts these actions to deliver approximately $95 million in annualized operating income in fiscal 2027.

In Ontario and Quebec, Empire will continue to operate its e-commerce Voilà banner, supported by its existing CFCs in the Greater Toronto and Montreal areas. Empire reports operations in those provinces have continued to expand.

Empire’s third-party delivery partnerships will expand through the new collaboration with DoorDash.

"Customers in Ontario and Quebec love Voilà and, while difficult, the decisions we have made related to our CFC network in Western Canada will help ensure the long-term growth and profitability of our e-commerce business," St-Laurent said in the announcement. "Our focus remains on thrilling our customers while giving them even more reasons to shop our banners through Voilà and third-party marketplaces across the country.

"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."

About Empire and Crombie REIT

Empire Company Limited (EMP-A-T), headquartered in Stellarton, N.S., is focused on food retailing through its wholly-owned subsidiary Sobeys Inc. and related real estate. With approximately $31 billion in annual sales and $17 billion in assets, Empire and its subsidiaries, franchisees and affiliates employ approximately 129,000 people. 

Crombie is one of Canada’s largest owners, operators and developers of real estate assets. The REIT’s portfolio primarily includes grocery-anchored retail, retail-related industrial and mixed-use residential properties. 

As at Sept. 30, the portfolio contained 306 properties comprising approximately 18.8 million square feet, inclusive of joint ventures at Crombie's share, and a pipeline of future development projects.