(Reuters) - Empire Co Ltd's Sobeys grocery sequence is expanding a high-margin sell gasoline business in Eastern Canada, announcing skeleton on Thursday to buy 250 gas stations from Shell Canada.
But Empire's shares forsaken as Sobeys' sum distinction domain fell to 23.91 percent in a latest entertain from 24.73 percent a year earlier. The association pronounced about half a diminution was due to an accounting change.
"We trust a decrease in sum domain reflects a rarely rival grocery environment," wrote BMO Capital Markets analyst Peter Sklar in a investigate note.
Empire's net income also fell neatly in a quarter. Earnings a year progressing were flattered by a benefit from a sale of one of a businesses.
Sobeys, Canada's No. 2 grocer, will take over all of Shell's sell outlets in Atlantic Canada and a range of Quebec. The cost was undisclosed though Sobeys pronounced it would financial a understanding with existent money balances.
The gas hire understanding will enhance Empire's stream fast of 43 gas outlets handling underneath several banners in Atlantic Canada. Shell will continue to supply a fuel.
The association will continue to work a outlets underneath a Shell banner. It aims to precedence Shell's strength as a code opposite Sobeys' name approval in a preference store business, Sobeys Chief Executive Bill McEwan pronounced in a statement.
STRONG RETURNS ON GAS
Other Canadian retailers have enjoyed clever gain during gas bars interjection to rising fuel prices. In a final quarter, Canadian Tire Corp's formula were helped by a 27.4 percent boost in gasoline sales.
The Sobeys-Shell understanding is approaching to tighten by a finish of Mar 2012.
Canadian grocers are confronting tough foe from Wal-Mart, that has been rolling out some-more "supercenters," that sell a wider array of grocery apparatus than a unchanging stores.
The marketplace will feverishness adult serve when Target Corp enters a Canadian marketplace in 2013, though a impact on Sobeys might be reduction than on a rivals as it has sealed a long-term indiscriminate agreement to supply a U.S. bonus tradesman with groceries.
Sales during Sobeys rose 3.4 percent in a entertain finished Nov 5 to C$3.98 billion. Sales during determined stores, a pivotal magnitude for retailers, rose 1.9 percent.
Empire's net gain for a entertain finished Nov 5 fell to C$78.1 million ($75.0 million), or C$1.15 a share, from C$142.9 million, or C$2.09, a year earlier. Its net gain were aloft in a year-before entertain due to deduction from a sale of industrial apparatus association Wajax.
Excluding special items, a association warranted C$1.10 a share, adult from C$1.02 in a same entertain final year.
Empire sales were adult 3.2 percent during C$4.04 billion.
SHELL DIVESTS IN ATLANTIC PROVINCES
Shell pronounced in May it would sell a sell operations in Quebec and a Maritimes as partial of a stability pestment in Eastern Canada.
"We will continue to have approach operations and investments ... in a rest of a country, in certain markets," David Saint-Laurent, Shell Canada's ubiquitous manager for sell pronounced in an interview. "It was only unequivocally strategically a good thing for us in Quebec and Atlantic."
Shares of Empire were down 2.7 percent during C$60.35 on Thursday afternoon on a Toronto Stock Exchange.
($1=$1.03 Canadian)
(Reporting by Allison Martell; Editing by Frank McGurty)
News referensi http://news.yahoo.com/sobeys-parent-empire-buy-250-shell-gas-stations-153421830.html
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