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Sobeys parent company's profit falls by more than half in second quarter

TORONTO _ The owner of the Sobeys grocery business has hired a consulting group to recommend ways to cut costs across the organization, which saw its second quarter profit fall by more than 50 per cent from last year.

Nova Scotia-based Empire Company Ltd. (TSX:EMP.A) says its net income for the quarter ended Nov. 5 was $33.1 million or 12 cents per share, and adjusted earnings were $32.9 million or 12 cents per share.

A year earlier, Empire’s net income was $68.5 million or 25 cents per share and adjusted earnings were $110.7 million or 40 cents per share.

Second quarter sales _ mostly from the Sobeys grocery business _ fell to $5.93 billion from $6.06 billion.

Interim chief executive Francois Vimard said in a call with analysts that the consultants’ work will leave no rock unturned and they will assess everything that has an impact in terms of cost in the business.

Empire says it will take a few months for the work to be completed and the company expects to consider the consultants recommendations no later than its fiscal fourth quarter, which ends in the spring.

The company has struggled financially since it acquired Canada Safeway in 2013 for $5.8 billion in an effort to expand its position in Western Canada.

Its same-store sales in the quarter were down 1.2 per cent, excluding the impact of lower fuel prices and the troubled western business unit. Excluding the impact of fuel prices only, same-store sales including the West were down 2.6 per cent.