Empire CEO thinks ‘Buy Canadian’ trend will stick as sales rise for Canadian products
Months after trade tensions hit their peak, it would seem the “Buy Canadian” movement is just getting started.
Michael Medline, president and CEO of Empire Company Ltd. and Sobeys Inc., said he believes the behaviour shift is “becoming sticky” as the food and pharmacy retailer reports higher sales of Canadian products for another quarter.
“It doesn't take a lot of people changing behavior to make a real difference in retail, especially the grocery business,” he said on an earnings call Thursday (June 19). “There are people who have changed their behaviors that will not go back, and we're doing our utmost to make them very happy at our banners. So we think much of it will stick, but we shall see. I mean, we don't have a crystal ball. We don't know what's going to happen. I don't think that the mindset of Canadians is switching very quickly away from how they felt at the beginning of the year.”
Medline said Empire’s approach to tariffs is three-pronged: elevating local, tapping into non-U.S. supply sources and “having tough discussions” with suppliers on tariff-related price increases.
“Last quarter, we said we heard loud and clear from our customers that they want Canadian products. We have been actively doing our part, not just the last few months, but the last few years by moving to a more local Canadian supply,” he said.
READ: The real rise of the ‘Buy Canadian’ consumer
Medline said a “trusted retail and consumer intelligence third party” confirmed to Empire that it has the highest Canadian product assortment compared to competing grocery retailers—“by a significant margin,” he said.
“As well, our data from a trusted third party shows that there has been a shift of buying from U.S.-identified retailers to Canadian retailers,” he said. “We believe that much of this customer shift will stick.”
“It is clear that our customers are voting with their wallets as our sales of Canadian products continue to rise,” he said.
In recent months, Medline said Empire’s sourcing of U.S. products has dropped, and he expects this number to continue to decline as Canada enters its growing season for produce.
“We continue to work with our suppliers to ensure that reactionary or unjustified costs are not passed on to our customers. We're committed to building long term partnerships with our suppliers, and passing through tariff-related increases can lead to their products becoming uncompetitive versus other viable alternatives. While these are not always easy conversations, we strongly believe our approach is the right one. With this three pronged approach to tariffs, we are protecting our customers and doing our part to keep food inflation down.”
Empire—whose banners include Sobeys, Safeway, FreshCo, Lawtons and other retail chains—reported net earnings of $173 million in its fourth quarter, up from $149 million last year.
Sales increased 3% to $7.64 billion. Same-store sales (food) were up by 3.8%.
“Over the last three quarters, we've been saying that we were seeing ‘green shoots,’ or early indicators that customers are returning to more favourable and predictable shopping behaviours,” Medline said. “What we're seeing in our customer behaviour is tough to reconcile against published consumer sentiment, which is near its lowest level in many years. But as one of our key suppliers recently said, we have to parse sentiment from behavior. In Q4 there is no doubt that our customers’ behaviour continued to improve.”
Executives maintained the gap between the company’s full-service and discount banners continues to close as it looks to add new stores to its network.
“We're now in a place where we can bring an increased focus on new store growth, filling gaps in our network to gain market share in pockets where we don't have significant exposure, but our competitors certainly do. We expect to put up 24 new stores in fiscal ‘26,” Medline said.
For the past six years, Empire has opened an average of eight new stores per year.
The expansion includes six new FreshCo stores in fiscal 2026. The banner currently has 49 stores in Western Canada, and Empire hopes to bring that number to 65 over the next several years.
“This is an unbelievably competitive industry, one of the most competitive grocery markets in the world, if not the most. And I think it's been—other than some blips here and there—the same competitively since I joined the company eight and a half years ago. I haven't changed my mind on that… We've got to be sharp, because our competitors are sharp.”
Empire’s same-store sales (food) were up by 3.8% in its fourth quarter. Medline told analysts that Empire’s internal food inflation remains stable.
“Our internal inflation this quarter was way under CPI food inflation purchased from stores and significantly below our same store sales… Over the last 25 years, CPI food inflation purchased from stores has averaged 3% and while there may be some ups and downs, we believe this trend will hold,” he said. “All to say, we are unable to reconcile what we are hearing or reading about inflation in the media, in food or for some in the industry, to what we are actually experiencing.”
In April, Medline announced he would be retiring from the company in spring 2026.
