Sobeys parent firm building two $95M warehouses in Toronto, Montreal areas as it pushes into home delivery
May 11, 2019 by David Kennedy
VAUGHAN, Ont.—Empire Company Ltd., the parent of grocery store chains Sobeys and IGA, is making a big push into the home delivery market and spending heavily on a pair of building projects to support the new venture.
The company said May 9 it plans to launch a home delivery service called Voilà that will bring groceries to customers’ doorsteps. The new service is scheduled to begin carting groceries to homes in the Greater Toronto Area next spring and to those in Ottawa, Montreal and several other major Quebec cities the following year.
“An online grocery home delivery experience like Voilà by Sobeys does not yet exist in Canada,” Sarah Joyce, senior vice-president of E-commerce for Empire, said in a statement. “While most players in the industry are focused on store pick models to fulfil their online orders, we are building automated warehouses specifically designed for best-in-class home delivery based on a highly successful model from the U.K.”
Two major construction projects underpin the new service.
Construction on the first of two customer fulfillment centres is already well underway in Vaughan, Ont. The warehouse facility will be outfitted with automation technology used by U.K.-supermarket chain Ocado. Empire said it will give customers access to a selection of more than 39,000 products at prices comparable to stores. While work on the facility is on-schedule, the company said new design elements and higher costs for building materials such as steel have raised expected construction costs to approximately $95 million, up from earlier estimates.
Work on a Montreal-area fulfillment centre is scheduled to get underway shortly. Empire noted that construction costs should be consistent with the Vaughan site, though could be marginally less when taking into account lessons learned in Ontario. Work on that project will be spearheaded by Empire-controlled real estate firm Crombie REIT. In a recent quarterly earnings report, the company said the facility will be located on a 20.25-acre parcel of land in Pointe-Claire, Que. The warehouse itself will have approximately 285,000 sq. ft. of floor space.
Construction on the Greater Montreal warehouse is scheduled to wrap up before the delivery service’s 2021 Quebec launch. Unlike in Ontario, Voilà in Quebec will fall under the IGA brand.
Once fully operational, each warehouse and delivery network is expected to employ about 1,500 workers.