Investor Presentation

September 2019

Katie Brine, Director Finance, Investor Relations Phone: 905-238-7124 x2092 Email: katie.brine@.com Disclaimers

Forward-Looking Information

This document contains forward-looking statements which are presented for the purpose of assisting the reader to contextualize Limited’s (“Empire” or the “Company”) financial position and understand management’s expectations regarding the Company’s strategic priorities, objectives and plans. These forward-looking statements may not be appropriate for other purposes. Forward-looking statements are identified by words or phrases such as “estimates”, “plans”, “predicts”, “anticipates” and other similar expressions or the negative of these terms.

These forward-looking statements include, but are not limited to, the following items:

 The Company’s expectations regarding the impact of Project Sunrise, including expected cost savings and efficiencies, the expected timing of the realization of overall and fiscal 2020 in-year incremental benefits, and the expected $50 million overachievement of the initial $500 million target which could be impacted by several factors, including the execution and completion of category resets, time required by the Company to complete the project as well as the factors identified under the heading “Risk Management” in the fiscal 2019 annual Management’s Discussion & Analysis (“MD&A”);  The FreshCo expansion in Western and Farm Boy expansion in , including the Company’s expectations regarding future operating results and profitability, the amount and timing of expenses, and the number, location, feasibility and timing of construction and conversions, all of which may be impacted by construction schedules and permits, the economic environment and labour relations;  The Company’s plans to purchase for cancellation Non-Voting Class A shares under the normal course issuer bid (“NCIB”) which may be impacted by market and economic conditions, and the results of operations; and  The Company’s expectations regarding the implementation of its online grocery home delivery service which may be impacted by the timing of launching the business, the customer response to the service and the performance of its business partner, Ocado. By its nature, forward-looking information requires the Company to make assumptions and is subject to inherent risks, uncertainties and other factors which may cause actual results to differ materially from forward-looking statements made. For more information on risks, uncertainties and assumptions that may impact the Company’s forward-looking statements, please refer to the Company’s materials filed with the Canadian securities regulatory authorities, including the “Risk Management” section of Empire’s fiscal 2019 annual MD&A.

Non-GAAP Financial Measures & Financial Metrics

There are measures and metrics included in this earnings call presentation, such as adjusted EBITDA, adjusted earnings per share, same-store sales, free cash flow, funded debt and total capital that do not have a standardized meaning under generally accepted accounting principles (“GAAP”) and therefore may not be comparable to similarly titled measures and metrics presented by other publicly traded companies. The Company includes these measures and metrics because it believes certain investors use these measures and metrics as a means of assessing financial performance.

For a more complete description of Empire’s non-GAAP measures and metrics, please see Empire’s MD&A for the first quarter ended August 3, 2019. 2 CEO’s Direct Reports

Michael Medline President & Chief Executive Officer

Pierre Vivek Mike Sarah Mike Simon Sandra Doug Vittoria Mohit St-Laurent Sood Venton Joyce Vels Gagné Sanderson Nathanson Varalli Grover

Executive Executive General Senior Vice Chief Executive Senior Vice Senior Vice Vice President, Senior Vice Vice President, Vice Manager, President, Financial Vice President, President, Sustainability, President, Chief Operating President, Discount E-commerce Officer President, Marketing General Counsel Chief of Staff, Innovation & Officer, Full Related & Corporate Service Format Human Office of the Strategy Businesses Resources Secretary CEO

3 Empire Company Limited – Who are we?

• Canadian company headquartered in Stellarton, Quick Facts – Empire* Nova Scotia. Share price (CAN$)** $36.01 • Key businesses include food retailing and related real estate through wholly owned subsidiary Sobeys 52-Week High ** $37.36 Inc. and a 41.5% equity accounted interest in 52-Week Low ** $22.69 Crombie REIT. 30-day Average daily trading volume** 664,379 • Sobeys is a national Canadian grocery retailer, serving the food shopping needs of Canadians under Shares outstanding (diluted) 272.9M retail banners that include Sobeys, , IGA, Quarterly dividend $0.12 , FreshCo, , Farm Boy and Lawtons Drugs. Number of Stores*** > 1,500 • In addition to food retail we are: Number of Retail fuel locations > 350 • Pharmacy retailers with in-store pharmacy Employees ~123,000 banners and free-standing locations through Total Square footage ~40.0 M Lawton’s Drug Stores; • Wholesalers, distributing to our corporate and Communities served > 900 franchised stores and over 8,000 retail stores *As at Q1, Fiscal 2020 (August 3, 2019) unless noted otherwise and independent wholesale accounts; and **As of September 13, 2019 *** See http://corporate.sobeys.com/at-a-glance/ for details of • Owner and operator of fuel and convenience stores per banner and location stores, and liquor operations.

4

Key Achievements – Last twelve months

2018 December • Completed the acquisition of Farm Boy, Ontario’s fastest growing food retailer

2019 January • Announced progress implementing a labour decision provided by a Special Officer appointed by the Government in B.C. • Decision sets terms that provide a framework to improve store profitability and enable conventional Safeway stores to compete on a level playing field in B.C. • Enabled Empire to move forward with Discount expansion strategy in B.C.

April • Opened first Western Canada FreshCo store in in Mission B.C.

May • Unveiled Voilà by Sobeys and Voilà par IGA – the name and brand for the Company’s online grocery home delivery service for the Greater Area, and major cities in the province of Quebec • Announced changes to Executive Committee, as the Company sets its sights on stronger execution, innovation and growth

June • Announced full year results reflecting fourth consecutive quarter of tonnage growth • Project Sunrise exceeded targets for fiscal 2019 – achieved $200 million of incremental savings in fiscal 2019, and increased total savings target to $550 million • Annual dividend per share increased 9% to $0.48 • Capital investment program for fiscal 2020 expected to be $600 million • Announced intent to repurchase approximately $100 million of Non-Voting Class A shares

July • With announcement of additional FreshCo store investments in Western Canada, one-third (22) of Western FreshCo locations confirmed • DBRS Upgrades Ratings on Sobeys Inc. to BBB (low) and changes trend to Stable; S&P revises outlook to Positive

September • Announced first quarter results reflecting increased earnings • Same-store sales excluding fuel increased by 2.4% • Store closure and conversion costs of $21.0 million ($0.06 per share, after tax) included in results • Repurchased 547,300 shares for a total consideration of $18.9 million 5

Strategic Focus

Reset our ​Bolster our Win in our Enhance Fill the Urban Invest in Foundation Brand Stores Discount Gap Innovation

Successful ​Strengthen the Improve service Expand discount Launch home Leverage digital completion of emotional and offering in to Western delivery and and data to Sunrise by end connection to our conventional Canada and rapidly grow the accelerate of fiscal 2020. our banner stores. refine our number of Farm growth. brands. FreshCo model. Boy stores.

6 Project Sunrise Update

In the fourth quarter of fiscal 2017, the Company launched Project Sunrise, a comprehensive, three year transformation initiative intended to simplify organizational structures and reduce costs. The initiative is now expected to generate at least $550 million in annualized benefits by the end of fiscal 2020 and will be achieved through three phases:

1) Organizational realignment – from a regional to a national structure, is complete. 2) Operational efficiencies – store operations, labour standards and other operational process initiatives continue to progress as planned, with increased benefits achieved in fiscal 2019 and planned for 2020. 3) Cost of goods sold – harmonization of costs with suppliers; more competitive net acquisition costs achieved; category resets are providing an improved, simplified and in some cases more innovative assortment for customers. Financial benefits from Phases one and two largely impacted selling and administrative expenses. Phase three financial benefits will be reflected mostly in gross margin expansion. As at Q1 F20, Project Sunrise is on track. Approximate In-Year Year Achieved Through Savings break-down ($M) Organizational design, indirect sourcing cost reductions and improvements in store 1 F2018 (completed) ~100 operations. 2 F2019 (completed) ~200 Initial rollout of category resets, continued cost reductions and operational improvements. Completion of category resets rollout, continued cost reductions and operational 3 F2020 (expected) ~250 improvements. Total ~550

Initial Target (set May 2017) 500 Expected to exceed by ~50 7 Project Sunrise Update

Significant improvement in Empire’s key metrics since the launch of Project Sunrise. Fiscal 2019 2017 Change 52 weeks 52 weeks +/- 4-May-19¹ 6-May-17 Sales $25,142.0 $23,806.2 + 5.6% Same-store sales, excluding fuel 4.3% 3.3% + 100 bps Gross margin 24.2% 24.0% + 20 bps Adjusted EBITDA $1,076.2 $769.9 + 39.8% Adjusted EBITDA margin 4.3% 3.3% + 100 bps Selling and Administrative margin (adjusted)² 22.1% 22.9% - 80 bps Adjusted EPS $1.50 $0.70 + 114.3%

$26 Sales ($B) $1,400 Adjusted EBITDA ($M) $2.00 Adjusted EPS ($/share) $25 $1,200 +11.8% CAGR +28.9% CAGR +1.8% CAGR³ $1,000 $1.50 $25 $800 $1.00 $24 $600 $400 $24 $0.50 $200 $23 $0 $0.00 2017 2018 2019 2017 2018 2019 2017 2018 2019 ¹ Empire’s results for the fiscal year ended May 4, 2019 include Farm Boy operations as of December 10, 2018. ² Selling and Administrative costs, excluding the impact from adjustments made to operating income during the fiscal year. See Empire’s fiscal 2019 MD&A. ³ Compound annual growth rate. 8 Farm Boy Acquisition Advances Ontario Strategy, Accelerating Ontario Presence and GTA Growth

• Farm Boy acquired on December 10th, 2018.

• Farm Boy contributed to Company results for 21 weeks of fiscal 2019; sales of $212.7 million and net earnings of $7.9 million.

• For fiscal 2020, the Company expects to spend approximately $70 million in capital for the expansion of the Farm Boy store network in Ontario.

• Since the acquisition, the Company has opened two new Farm Boy stores in Ontario. Three further stores will open in fiscal 2020 and two more in the first quarter of fiscal 2021.

• Farm Boy Private Label will be part of the Voilà by Sobeys offering when it Farm Boy Stores acquired launches in Spring 2020. Farm Boy Stores opened Farm Boy Stores announced to open Existing Farm Boy Distribution Centre Announced Farm Boy Distribution Centre Opening Note – For further company and transaction information, please see Appendix A 9 Ocado Solutions

With more than 15 years at the forefront of innovation and success in grocery ecommerce, Ocado will partner exclusively in Canada with Sobeys on our end-to-end e-commerce solution.

Key facts:

• Canadian online grocery market is

growing 30%+ per year

• Greater Toronto Area Customer Fulfilment Centre (“CFC”) complete in 2 years • Soft launch in Spring 2020

Ocado by the numbers*: • 99% order accuracy • 95% delivery punctuality • 0.7% product waste • 318,000 orders a week (average) • 741,000 active customers *Per Ocado Group’s 2019 Half Year Report This is a link to a video showing the Ocado’s Andover facility. https://youtu.be/EeMTZd68fOU

10 Financial Results – Annual

Fiscal

F2019 F2018 F2017 F2016 52 weeks 52 weeks 52 weeks 53 weeks

4-May-19¹ 5-May-18 6-May-17 7-May-16

Sales $25,142.0 $24,214.6 $23,806.2 $24,618.8

Same store sales growth (decline), excluding fuel 2.7% 0.5% (2.2)% 0.3%

Inflation (deflation) at quarter end – internal 2.2% 0.8% (1.9)% 2.2%

Gross profit $6,083.6 $5,900.5 $5,707.2 $5,957.6

Gross margin 24.2% 24.4% 24.0% 24.2%

Adjusted EBITDA $1,076.2 $1,014.7 $796.9 $1,161.4

Adjusted EBITDA margin 4.3% 4.2% 3.3% 4.7%

Adjusted earnings per share $1.50 $1.27 $0.70 $1.50 Free cash flow ² $540.7 $808.9 $619.7 $367.3

Capital expenditures $434.6 $288.0 $514.5 $672.0

Dividends per share $0.44 $0.42 $0.41 $0.40

Share price $29.94 $25.01 $21.50 $21.09

¹ Empire’s results for the fiscal year ended May 4, 2019 include Farm Boy operations as of December 10, 2018. All metrics, including same-store sales, include the consolidation of Farm Boy operations ² The Company revised the definition of free cash flow in Q4 F19 as cash flows from operating activities, plus proceeds on disposal of property, equipment and investment property, less acquisitions of property, equipment, investment property and intangibles. All amounts in the chart have been restated to reflect the new definition. 11

Financial Results – 12 Quarter Review

Fiscal Fiscal Fiscal Fiscal 2020(2)(3) 2019 2018 2017

Q1 F20 Q4 F19 Q3 F19(4) Q2 F19 Q1 F19 Q4 F18 Q3 F18 Q2 F18 Q1 F18 Q4 F17 Q3 F17 Q2 F17

Aug. 3 May 4 Feb. 2 Nov. 3 Aug. 4 May 5, Feb. 3, Nov. 4, Aug. 5, May 6, Feb. 4, Nov. 5,

2019 2019 2019 2018 2018 2018 2018 2017 2017 2017 2017 2016

Sales $6,744.1 $6,220.4 $6,247.3 $6,214.0 $6,460.3 $5,886.1 $6,029.2 $6,026.1 $6,273.2 $5,798.9 $5,889.8 $5,930.9

Same store sales, excluding fuel 2.4% 3.8% 3.3% 2.5% 1.3% 0.0% 1.1% 0.4% 0.5% (1.6)% (3.7)% (2.6)% Inflation (deflation) – internal 3.0% 2.2% 1.8% 1.3% 0.0% 0.8% 1.6% 0.7% 0.5% (1.9)% (2.2)% (0.1)% Gross profit $1,660.4 $1,577.5 $1,511.7 $1,482.1 $1,512.3 $1,451.3 $1,444.7 $1,473.5 $1,531.0 $1,420.9 $1,394.8 $1,400.7

Gross margin 24.6% 25.4% 24.2% 23.9% 23.4% 24.7% 24.0% 24.5% 24.4% 24.5% 23.7% 23.6%

Adjusted EBITDA $460.0 $300.1 $218.3 $279.1 $278.7 $240.4 $253.3 $242.2 $278.8 $193.9 $178.7 $181.2

Adjusted EBITDA margin 6.8% 4.8% 3.5% 4.5% 4.3% 4.1% 4.2% 4.0% 4.4% 3.3% 3.0% 3.1% Adjusted EBITDA margin (Pre-IFRS 16) 4.9% 4.8% 3.5% 4.5% 4.3% 4.1% 4.2% 4.0% 4.4% 3.3% 3.0% 3.1%

Adjusted EPS $0.49 $0.46 $0.27 $0.40 $0.37 $0.35 $0.33 $0.27 $0.32 $0.18 $0.13 $0.12 (1) Free cash flow $224.2 $175.6 $179.2 $58.4 $127.5 $342.7 $248.4 $111.2 $106.6 $150.7 $15.5 $6.6

Capital expenditures $91.4 $227.1 $86.5 $73.4 $47.6 $84.0 $70.9 $58.5 $74.6 $111.9 $96.3 $171.3

Dividends per share $0.120 $0.110 $0.110 $0.110 $0.110 $0.105 $0.105 $0.105 $0.105 $0.1025 $0.1025 $0.1025

Share price $35.52 $29.94 $29.75 $23.43 $26.12 $25.01 $23.31 $23.73 $20.39 $21.50 $16.24 $18.51

1 Amounts have been restated to be consistent with the pre-IFRS 16 definitions. See “Non-GAAP Financial Measures & Financial metrics" section of Empire’s News Release for the first quarter ended August 3, 2019. 2 In the first quarter of fiscal 2020, the Company expensed $21 million in closure and conversion costs. These costs relate to the announced conversion of ten Safeway locations to FreshCo stores and the conversion of two Company locations to Farm Boy stores that were announced in the first quarter. 3 Certain financial metrics were impacted by the implementation of IFRS 16 in the first quarter of fiscal 2020. See Appendix B for additional details. 4 Q3 F19 results include $45 million in costs related to the B.C. labour buyouts and FreshCo conversion store closures which impacted selling and administrative costs 12 Appendices A – D Appendix A Farm Boy – Company Overview

. Founded in 1981, Farm Boy Inc., (“Farm Boy”) is an Ontario- based retail grocer that has a focus on high quality and locally- sourced meat and produce and offers a wide range of exceptional private label and prepared foods and renowned customer service

. Farm Boy is led by Jean-Louis Bellemare (founder and co-CEO) and Jeff York (co-CEO), both are continuing their leadership roles with Farm Boy

. Farm Boy operates a unique and compelling brand that resonates with Canadians and has a passionate and loyal customer base

. Scalable platform with infrastructure in place to support future long-term growth

. Over the last 5 years, Farm Boy has approximately doubled store count and delivered strong revenue, EBITDA and free cash flow growth

. Today, Farm Boy has 28 stores with defined plans for continued expansion into the GTA

14 Farm Boy – Key Investment Highlights

1 Aligned with Empire’s Strategic Priorities

2 Leading Specialty Food Retailer with Strong Brand Loyalty

3 Attractive, Scalable Platform Primed for Growth

4 Enhances Presence in Urban Markets with Established, Well-Known Brand in Ontario

5 Exceptional Private Label Offering

6 Retention of Strong and Driven Management Team

15 Farm Boy – Transaction Overview

. Empire, through a subsidiary, signed an agreement on September 24, 2018, to acquire the business of Farm Boy for a total purchase price of $800 million; transaction closed on December 10, 2018 Purchase . Farm Boy is set up as a separate company within Empire’s structure Price & Timing . Farm Boy’s Co-CEOs, together with members of their senior management team, have reinvested for a 12% interest of the continuing Farm Boy business

. Accretive to adjusted earnings per share and operating cash flow per share in the first full fiscal year after closing

. Empire’s fourth quarter of fiscal 2019 was the first full quarter including contributions from Farm Boy

. Empire’s fiscal year 2020 will be the first year including a full year of contributions from Farm Boy Financial . Historical EBITDA CAGR of 21% with compelling EBITDA margin profile(1) Profile . Plan to double store count, sales and EBITDA in the next 5 years

. Free cash flow generation sufficient to self-fund growth

. Three year average same-store sales growth of 5.3%(2)

. The acquisition was financed through a combination of cash on hand and a new $400 million senior, unsecured, non- Financial revolving two-year credit facility Flexibility . Rapid deleveraging profile

(1) For the period from FY2014 through the 52 weeks ended July 14, 2018 (2) FY2015 through FY2017. 16 Appendix B IFRS 16 Update

• IFRS 16 intends to align the presentation of leased assets more closely to owned assets. • Impact of the standard has been reflected in the financial statements for first quarter of 2020 (from May 5, 2019). • This standard will not impact Empire's strategy, business operations, or cash flow generation. • The adoption of IFRS 16 had a material impact on balance sheet classifications. • The Company expects the adoption of IFRS 16 will not have a material impact on fiscal 2020 EPS.

INCOME STATEMENT IMPACT BALANCE SHEET IMPACT

13 Weeks Ended Adjustments to opening balances resulting from the initial adoption of IFRS 16: ($ in millions, except Aug. 3, Aug. 4, Impact of Change Change As at May 5, 2019 ($ in millions) per share amounts) 2019 2018 IFRS 16(1) (excl. IFRS 16) Asset increase (decrease): EBITDA $460.0 $278.7 $181.3 $129.0 $52.3 Prepaid expenses $(43.4) Current loans and other receivables 53.6 Adjusted EBITDA $460.0 $278.7 $181.3 $129.0 $52.3 Non-current loans and other receivables 519.0 Other assets (7.3) Property and equipment (22.3) EBITDA margin 6.8% 4.3% 2.5% 1.9% 0.6% Right-of-use assets 3,800.7 Intangibles (126.7) Finance costs, net $71.7 $23.1 $48.6 $46.3 $2.3 Deferred tax assets 127.3 Total assets $4,300.9 Net earnings $130.6 $95.6 $35.0 $(0.9) $35.9 Liabilities and equity (increase) decrease: Current provisions $7.4 Adjusted net earnings $133.9 $100.2 $33.7 $(2.0) $35.7 Long-term debt due within one year 6.5 Lease liabilities due within one year (424.4) Adjusted EPS (fully diluted) $0.49 $0.37 $0.12 $(0.01) $0.13 Long-term provisions 23.7 Long-term debt 22.6 (1) Reflects the impact of changing accounting standards from IAS 17 to IFRS Long-term lease liabilities (4,569.6) 16 in the first quarter of fiscal 2020, including the add back of $3.5 million Other long-term liabilities 164.4 ($2.5 million after tax) in historical straight-line expense under IAS 17. Deferred tax liabilities 36.5 Retained earnings 432.0 Total liabilities and equity $(4,300.9)

17 Appendix C FreshCo 2.0

18 FreshCo 2.0

19 Appendix D

Voilà – Canada’s best online grocery home delivery service

Voilà by Sobeys promises to help Canadians stay one step ahead of their busy lives.

Key Facts:

• Powered by Ocado’s world-leading online grocery engine, Voilà by Sobeys will offer an expansive product selection of up to 39,000 products, including high quality fresh produce, at prices comparable to Sobeys and IGA.

• Construction of CFC in Vaughan, Ontario is on track to roll out testing and soft launch in the GTA in late Spring 2020. • Ocado is building the grid in the ambient & chilled portions of the warehouse • On-boarding suppliers has begun • Robots are arriving soon for testing • Delivery trucks are ordered • Team on-boarding ongoing

• Second CFC announced to open in Montreal in 2021, serving major cities in Quebec and the Ottawa Area.

• Empire has partnered with Crombie REIT to develop the second CFC in Montreal.

20 Voilà by Sobeys – Vaughan CFC

21 Voilà by Sobeys – Vaughan CFC

Vaughan CFC

Ocado’s live CFC in Erith, UK

22