Sobeys parent increases dividend as profits soar

The Canadian grocery giant behind Sobeys, Safeway and Freshco on Thursday announced it will raise its shareholder dividend after profits soared during the coronavirus pandemic. The move comes less than a week after the company cut its pay bonuses for frontline staff.

Empire Co. Ltd. said its adjusted net earnings ballooned by 43 per cent to $181 million in its fourth quarter, compared to last year. In a statement Thursday, chief executive Michael Medline called the 13week period, which ended on May 2, “one of our proudest quarters in Empire’s 113-year history.”

The company also said it was increasing its quarterly dividend by 8.3 per cent to 13 cents a share. Last week, Empire ended a program called “Hero Pay” that gave $2-per-hour pay premiums for frontline staff.

The quarterly report showed that the premium and pandemic-related safety measures in store have cost roughly $140 million so far: $80 million in the fourth quarter and another $60 million in May and the first half of June.

“As provinces execute their reopening plans and customer behaviour shifts, we felt that this was a natural time to end our Hero Pay program,” Medline said in a letter to staff on June 12, a day after Loblaw Cos. Ltd. and Metro Inc. said they were ending their $2/hour bonuses. Empire said it would also add an employee discount program in the fall.

All three companies ended the pay premiums on the same day, June 13.

Each chain also provided a onetime lump sum bonus at the end of the program, typically in the $100 to $200 range depending on how much an employee worked on average.

Jerry Dias, president of trade union Unifor — which represents roughly 2,000 Empire employees — said in a tweet on Thursday that Empire could afford to keep the wage increases “with profits like this.” Dias and Unifor have publicly criticized the major grocers for ending the hazard pay before the pandemic was over. “It’s all about greed,” he said later in an interview.

Medline declined to respond to “that kind of comment,” but noted that Empire had been one of the few companies hiring new staff as unemployment skyrocketed at the height of the pandemic.

He said Empire was using its success to invest in its stores and a new delivery system.