Acquisition of by Sobeys

June 12, 2013 “Safe Harbour” Disclosure

FORWARD-LOOKING INFORMATION Certain statements made in this presentation that are not current or historical factual statements may constitute “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information in this presentation includes, but is not limited to, statements regarding the timing and completion of the proposed acquisition (including the final number of locations), final financing breakdown (including the amount of bridge financing drawn and the timing of paying back any bridge financing drawn), timing and value of expected synergies, the effective acquisition multiple and accretion (which may be impacted by the offering price of any equity offering and other final financing arrangements), market share, competitive position, growth prospects, benefits from economies of scale, future business strategy, expectations regarding operations and future oriented financial information such as estimates regarding future sales, revenues, margins, cash flows, costs and other financial and credit metrics. When used in this presentation, forward-looking information may be qualified by words such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “will” and other similar terminology suggesting future outcomes or statements regarding an outlook.

The forward-looking information disclosed herein involves numerous assumptions, known and unknown risks, uncertainties and other factors, many of which are beyond the control of Empire or Sobeys which may cause actual events, results, performance or achievements of Empire, Sobeys and Canada Safeway to be materially different from those expressed or implied by such forward-looking information. These factors include, among other things: (i) the number of stores that Sobeys may be required to divest as a condition of required regulatory approvals; (ii) the ability of Empire/Sobeys/Canada Safeway to achieve expected synergies and the timing of same; (iii) the ability of Empire/Sobeys/Canada Safeway to predict and adapt to changing consumer tastes, preferences and spending patterns; (iv) risks relating to the satisfaction of the conditions to closing the transaction and the related financing arrangements; (v) the ability of Empire/Sobeys/Canada Safeway to protect its intellectual property; (vi) the expected pace of expansion of Empire’s/Sobeys’/Canada Safeway’s operations; (vii) the absence of material litigation; (viii) future results being similar to historical results; (ix) expectations related to future general economic and market conditions, including debt and equity capital markets; (x) expectations concerning the future legislative and regulatory environment in which Empire/Sobeys/Canada Safeway operates; (xi) effectiveness of integration efforts; (xii) ability of the Sale-Leaseback and sales of other real estate and non-core assets to be completed on favourable terms, or at all, and the timing of same; and (xiii) such other risks as described in detail from time to time in documents filed by Empire or Sobeys with securities regulatory authorities in Canada. While these assumptions, risks and uncertainties do not represent a complete list of factors which may cause events to be materially different than those expressed or implied by forward-looking statements in this presentation, they should be considered carefully.

While the forward-looking information contained herein is based on estimates and assumptions made by management in light of its experience, perception of historical trends, current conditions and expected future developments, all of which is believed to be reasonable, accurate and reliable, neither Empire, Sobeys nor their affiliates, officers, directors, agents and representatives make any representation or warranty, expressed or implied, as to the accuracy or completeness of such information or of any other written or oral information disclosed in or implied by this presentation, and Empire and Sobeys, their affiliates, officers, directors, agents and representatives expressly disclaim any responsibility or liability in connection therewith or arising therefrom. The forward-looking information contained in this presentation reflects management’s current expectations regarding future events and operating performance, speaks only as of the date of this presentation and is expressly qualified by this cautionary statement. Neither the Company nor Sobeys undertakes to update any forward-looking statements that may be made from time to time by them or on their behalf other than as required by applicable securities laws.

There can be no assurance that the transaction will close or that an equity or debt offering will be undertaken or completed in whole or in part or the timing of any such transaction. No securities will be offered or sold in the United States or to U.S. persons absent registration under the U.S. Securities Act of 1933 or the availability of an applicable exemption from such registration. This presentation does not constitute a solicitation of an offer to purchase, or an offer to sell, securities in the United States or elsewhere. Sobeys has not yet entered into any agreements to sell any real estate or other assets and there is no guarantee that any real estate or other assets will in fact be sold, and actual net proceeds from any such transaction is uncertain. Closing of the transaction is not conditional on the completion of any of the foregoing.

This presentation is not, and under no circumstances is to be construed as, a prospectus, an offering memorandum, an advertisement or a public offering of securities.

NON-IFRS MEASURES This presentation makes reference to certain non-IFRS measures. These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of operations from management’s perspective. Accordingly, non-IFRS measures should never be considered in isolation nor as a substitute for analysis of financial information reported under IFRS. Management presents non-IFRS measures, specifically EBITDA, adjusted EBITDA, adjusted net earnings and free cash flow as it believes these non-IFRS measures are frequently used by securities analysts, investors and other interested parties as measures of financial performance and to provide a supplemental measure of operating performance and thus highlight trends that may not otherwise be apparent when relying solely on IFRS financial measures. The definitions of the non-IFRS measures contained in this presentation are as follows:

EBITDA is calculated as net earnings before net finance costs, income taxes and depreciation and amortization of intangibles.

Adjusted EBITDA and adjusted net earnings are calculated as the base number adjusted for: (i) items as they will be applicable to Sobeys on a pro forma basis following the transaction including management, IT and royalty fees, interest income and stock-based compensation charges; (ii) changes in accounting policies and foreign exchange; and (iii) items which are considered by management as not indicative of underlying business operating performance such as gain/loss on the disposal of assets.

Free cash flow is calculated as cash flow from operating activities, plus proceeds on disposal of property, equipment and investment property, less property, equipment and investment property purchases. 2

All references herein are to Canadian dollars. Transaction Overview

‹ On June 12, 2013, Sobeys entered into an agreement with Safeway Inc. to purchase substantially all of Canada Safeway’s assets for C$5.8 billion (1) in cash (the “Acquisition”) ‹ Canada Safeway is a leading Western Canadian food retailer with exceptional store locations • 213 full service grocery stores under the Safeway banner • 199 in-store pharmacies • 62 co-located fuel stations, 12 manufacturing facilities and 10 liquor stores • Strong management team • Revenue of $6.7 (2) billion and adjusted EBITDA of approximately $513 million (2) ‹ Conservative acquisition financing with the majority of funds expected to be from an Empire equity issue and asset sales, including a $1.0 billion sale and leaseback of acquired Canada Safeway real estate (the “Sale-Leaseback Transaction”) ‹ Effective acquisition multiple of 7.4x after giving effect to synergies, assumed capital leases and the Sale-Leaseback Transaction ‹ Continues Empire’s focus on food and related real estate ‹ Closing expected in fall 2013, following the Competition Bureau review period 3 (1) Subject to a working capital adjustment, plus the assumption of certain liabilities (2) For the 52-week period ended March 23, 2013 Transaction Rationale

‹ Creation of a new platform for growth ‹ Positions Sobeys as a leading grocer in Western Canada and the #1 grocer in the fast-growing market ‹ Solidifies Sobeys’ #2 position nationally with pro forma revenue of approximately $24 billion ‹ Canada Safeway has an exceptional store network in sought-after locations and $1.8 billion (1) in owned real estate ‹ Aligned corporate strategy – both companies have complementary offerings, are focused on excellence in fresh food and represent a great cultural fit ‹ Strengthens Sobeys’ talent base ‹ Identified cost synergies of approximately $200 million annually (2) ; leverages Sobeys’ information technology and distribution systems across a larger store base ‹ Management expects the Acquisition to be immediately accretive to adjusted net earnings per share and in excess of 25% accretive once synergies are fully realized ‹ Significant free cash flow generation and rapid de-leveraging

(1) Based on a third-party valuation completed on March 30, 2013, including grocery stores, gas stations, liquor stores, 4 office space, manufacturing assets, distribution assets and other real estate (2) Expected to be achieved over a three year period Much Stronger National Platform

‹ Sobeys’ pro forma LTM (1) revenue of approximately $24 billion

Store Count:

British Columbia Alberta Québec

32 141 15 32 334 407 (3) 354 (4)

75 93 (5) 16 33 6 Loblaw 232 (2) Loblaw 121 (2)

Pro Forma 107 Pro Forma 234 Pro Forma 31 Pro Forma 65 Pro Forma 340 16 (6) 6

Loblaw 84 (2) Loblaw 84 (2) Loblaw 35 (2) Loblaw 28 (2) Loblaw 459 (2) Metro 381 (7)

Overwaitea 101 Overwaitea 26 Walmart 8(6) Walmart 10 (6) Walmart 105 (6) Costco 19

Walmart 25 (6) Walmart 40 (6) Costco 2 Costco 3 Metro 264

Costco 14 Costco 14 Costco 27

Source: Company reports Note: Sobeys’ pro forma data is before any required store divestitures which may be required upon Competition Bureau review; provincial breakdown of 7 Walmart locations is unknown (4) Excludes 71 retail gas stations (1) Sobeys for the 52-week period ended February 2, 2013; (5) Includes 10 liquor stores Canada Safeway for the 52-week period ended March 23, 2013 (6) Supercentres only 5 (2) Excludes affiliated independents (7) Excludes 186 pharmacies operating under the Brunet, Brunet (3) Excludes 189 retail gas stations Plus, Brunet Clinique and Clini Plus banners Exceptional Store Portfolio in Sought After Locations with Significant Real Estate Ownership

‹ 213 full-service retail grocery stores under the Safeway banner • Approximately 9 million square feet of exceptional store real estate in highly desirable markets • Approximately 60% of store square footage located in , , and Winnipeg • Average store size of ~42,000 square feet • 116 company-owned store locations totaling 4.8 million square feet ‹ $1.8 billion in total owned real estate value (1)

Locations

Edmonton

Saskatoon

Calgary Regina Winnipeg Vancouver

6 (1) Based on a third-party valuation completed on March 30, 2013, including grocery stores, gas stations, liquor stores, office space, manufacturing assets, distribution assets and other real estate Sobeys and Canada Safeway: A Great Fit

Sobeys Canada Safeway

• Focus on fresh food • Focus on offering high-quality perishables

• Investment in private label – Sensations, • Growth of private label – SELECT, O Organics, Compliments, Balance Organic Open Nature

• Customer loyalty • Loyalty building and customer service

• Customer insight capabilities; (1) • Customer insight capabilities; Air Miles

• Employee engagement • Employee development

• Ongoing cost and productivity initiatives • Continued cost control

• Strong management team • Strong management team

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(1) In Québec and the Atlantic region Significant Cost Synergies

Approximately $200 million run-rate cost synergies annually, realized over a three year period

Type Comments

V Integrate and modernize distribution networks while leveraging Sobeys’ Distribution expertise

V Reorganize business processes to fully leverage Sobeys’ national IT IT infrastructure and surrounding network architecture and tools

V Leverage significant incremental purchasing volume in both food and generic Procurement drugs

V Combine management teams to strengthen expertise and deepen bench Other Admin V Rationalize administrative and marketing costs

Potential for revenue growth opportunities exist, in addition to $200 million cost synergies

8 Strong Private Label Offering and Customer Loyalty Programs

Private Label Offering Customer Loyalty Programs ‹ Helps promote customer loyalty and ‹ Elimination of separate loyalty programs also provides price competitive products ‹ Integration of the loyalty program will ‹ Integration of private label offerings will increase customer clarity and result in: awareness • Procurement synergies ‹ Better leverages Sobeys’ existing • Packaging and formulation efficiencies “leading edge” customer analytics • Expanded variety/assortment of product ‹ Enhances cross promotional opportunities via the acquired fuel business

9 Modern Distribution Network, POS and Information Technology Infrastructure

Distribution Network POS/IT Infrastructure ‹ Sobeys has invested significantly in the ‹ Sobeys has “leading edge”, proprietary construction of automated DCs customer insight capability as well as a • Enables automated picking/assembly for national SAP platform improved product selection accuracy ‹ Post-Acquisition, Sobeys will reorganize • Ability to customize deliveries according Canada Safeway’s business processes to the unique layout of each store to fully leverage Sobeys’ existing • Reduces distribution costs and improves national IT infrastructure and SAP service to its store network and platform (plug-and-play) customers ‹ Post-Acquisition, Sobeys will integrate and modernize Canada Safeway’s distribution networks, while leveraging Sobeys’ distribution expertise

10 Significantly Accretive Transaction

‹ Management expects the Acquisition to be immediately accretive to adjusted net earnings per share and in excess of 25% accretive once synergies are fully realized ‹ Effective acquisition multiple of 7.4x after adding assumed capital leases, adjusting for the Sale-Leaseback Transaction and including anticipated cost synergies of $200 million

Effective Effective EV / Purchase Adjusted Adjusted EBITDA Price EBITDA Multiple (C$ millions) (C$ millions) (2) Purchase of Canada Safeway$ 5,800 (1) $ 513 Assumed Canada Safeway Capital Leases 41 - (3) Sale-Leaseback Transaction (1,000) (57) Synergies - 200

Adjusted Transaction Metrics$ 4,841 $ 656 7.4x

(1) Subject to a working capital adjustment 11 (2) For the 52-week period ended March 23, 2013 (3) Based on a third-party valuation completed on March 30, 2013 which references a 5.7% capitalization rate Financing Overview

(1) ‹ Total transaction value of $6.0 billion , 56% to Sources of Funds at Closing (estimate) be funded with equity, asset sales and cash (C$ millions) ‹ Empire and Sobeys have obtained commitments from Scotiabank providing for an aggregate of $6.44 billion Bond $1.825 billion term loan $800 • Equity • $3.815 billion in bridge facilities $1,500 • $800 million in revolving-term facilities, largely undrawn at closing Term Loan $1,825 Sale-Leaseback ‹ Anticipate completing the equity/bond offerings Transaction and the Sale-Leaseback Transaction prior to $1,000 the Acquisition close • As such, only a small portion of the bridge facilities is expected to be drawn upon Cash Asset Sales / ‹ Empire and Sobeys intend to sell $1 billion of $150 Bridge to Subsequent non-core assets that could potentially be used Asset Sales to repay the asset sale bridge and other debt $720

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(1) Includes acquisition and financing costs of approximately $200 million Continue Focus on Food Retail and Related Real Estate

‹ In 2007, with the privatization of Sobeys, Empire embarked on a major refocusing of its business on retail food operations ‹ Sobeys invested more than $2.3 billion to expand its stores and distribution network, while generating over $2.9 billion in cash flow (1) from FY2008 to FY2012 ‹ Sobeys grew revenue and adjusted EBITDA at a CAGR of 4.9% and 8.3% respectively from FY2007 to LTM (2) ‹ The Acquisition continues Empire’s focus on food retail and related real estate Sobeys’ Sales Sobeys’ Adjusted EBITDA (3)

(C$ billion) (C$ million) CAGR: 4.9% CAGR: 8.3% $839 $17.1 $775 $789 $15.7 $16.0 $711 $742 $14.8 $15.2 $13.8 $634 $13.0 $532

(2) (2) FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 LTM FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 LTM

(1) Cash flow from operations plus proceeds from disposals less dividends, intangible asset acquisitions and other items 13 (2) For the 52-week period ended February 2, 2013 (3) EBITDA presented for FY2007 to FY2010 Continue Empire’s Track-Record of Long-Term Growth

(C$ millions) Empire Total 600% May 2007 - Shareholder Privatization of Sobeys Return CAGR (1) : March 2006 - 12.8% 500% Formation and investment in Crombie REIT

400% July 2000 - Sale of Hannaford Adjusted Net Brothers $5.23 Earnings per 300% Share CAGR: $4.71 13.1% $4.45 December 1998 - $4.15 $3.97 Acqusition of 200% $3.69 Oshawa Group Total Return (%) (%) Return Return Total Total $3.07 $3.04 S&P/TSX $2.78 Composite Total 100% $2.42 $2.47 Return CAGR (1) : $2.00 5.5%

0% $1.33 $1.10 $0.85 $0.78

(100%) (2) FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY LTM 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (3) Adjusted Net Earnings per Share Ltd. S&P TSX Composite

Track record of successfully integrating acquisitions and creating significant shareholder value

(1) From April 30, 1998 to June 11, 2013 14 (2) For the 52-week period ended February 2, 2013 (3) Referred to as operating earnings per share for periods prior to FY2011 Transaction Highlights

‹ $5.8 billion (1) all-cash transaction ‹ Conservative acquisition financing with the majority of funds expected to be from an Empire equity issue and asset sales ‹ Effective acquisition multiple of 7.4x after giving effect to synergies, assumed capital leases and the Sale-Leaseback Transaction ‹ Positions Sobeys as a leading grocer in Western Canada and solidifies Sobeys’ #2 position nationally ‹ Canada Safeway has an exceptional store network in sought-after locations and $1.8 billion (2) in owned real estate ‹ Aligned corporate strategy – both companies have complementary offerings, are focused on food, represent an excellent cultural fit and have strong management teams ‹ Identified cost synergies of approximately $200 million annually ‹ Management expects the Acquisition to be immediately accretive to adjusted net earnings per share and in excess of 25% accretive once synergies are fully realized ‹ Significant free cash flow generation and rapid de-leveraging ‹ Continues Empire’s focus on food retail and related real estate

(1) Subject to a working capital adjustment, plus the assumption of certain liabilities 15 (2) Based on a third-party valuation completed on March 30, 2013, including grocery stores, gas stations, liquor stores, office space, manufacturing assets, distribution assets and other real estate