Empire : Quarterly Report to Shareholders - February 3, 2024

Quarterly

Report

For the Third Quarter Ended February 3, 2024

QUARTERLY REPORT TO SHAREHOLDERS

Empire Company Limited ("Empire" or the "Company") is a Canadian company headquartered in Stellarton, Nova Scotia. Empire's key businesses are food retailing and related real estate. With approximately $30.7 billion in annual sales and $16.6 billion in assets, Empire and its subsidiaries, franchisees and affiliates employ approximately 131,000 people.

The Company operates and reports on two business segments: (i) Food retailing and (ii) Investments and other operations. Empire's food retailing segment is carried out through its wholly-owned subsidiary, Sobeys Inc. ("Sobeys"), which as of February 3, 2024, owns, affiliates or franchises more than 1,600 stores in all 10 provinces under retail banners that include Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods, Farm Boy, Longo's and Lawtons Drugs, and operates grocery e-commerce under banners Voilà, IGA.net and ThriftyFoods.com, and more than 350 retail fuel locations. Investments and other operations segment, which as of February 3, 2024, included:

1. a 41.5% equity accounted interest in Crombie Real Estate Investment Trust ("Crombie REIT"), an Ontario registered, unincorporated, open-ended real estate investment trust. Crombie REIT is one of the country's leading national retail property landlords with a strategy to own, operate and develop a portfolio of high-quality grocery and drug store anchored shopping centres, freestanding stores and mixed-use developments primarily in Canada's top urban and suburban markets; and ii) various equity accounted interests in real estate partnerships (collectively referred to as "Genstar"). Genstar is a residential property developer with operations in select markets in Ontario, Western Canada and the United States.

Copies of this report are available on the Company's website (www.empireco.ca) or by contacting Investor Relations at (902) 752-8371. A copy has also been filed on SEDAR+.

The Company provided additional details concerning its second quarter results in a conference call held on Thursday, March 14, 2024. Replay of the call is available on the Company's website (www.empireco.ca).

Forward-Looking Statements

This document contains forward-looking statements which are presented for the purpose of assisting the reader to contextualize the Company's 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 "anticipates", "expects", "believes", "estimates", "intends", "could", "may", "plans", "predicts", "projects", "will", "would", "foresees" and other similar expressions or the negative of these terms.

For additional information and a caution on the use of forward-looking information, see the section in the Management's Discussion and Analysis ("MD&A") entitled "Forward-Looking Information".

1

LETTER TO SHAREHOLDERS

Empire Reports Fiscal 2024 Third Quarter Results

Third Quarter Summary:

• Earnings per share ("EPS") and adjusted EPS(1) of $0.54 and $0.62 respectively
• Prior year EPS of $0.49 and adjusted EPS of $0.64
• Same-storesales, excluding fuel, increased by 1.9%
• Gross margin, excluding fuel, increased by 87 basis points, partially due to impact of the Cybersecurity Event(2) in the prior year
• Strong free cash flow generation of $349 million
• Share buyback program on track; Repurchased $340 million of shares to date in fiscal 2024

Stellarton, NS - Empire Company Limited ("Empire" or the "Company") (TSX: EMP.A) today announced its financial results for the quarter ended February 3, 2024. For the quarter, the Company recorded net earnings of $134.2 million ($0.54 per share) compared to $125.7 million ($0.49 per share) last year. For the quarter, the Company recorded adjusted net earnings of $153.1 million ($0.62 per share) compared to $164.8 million ($0.64 per share) last year.

"Our team delivered solid results, in line with our expectations, given a cautious consumer navigating the impacts of higher interest rates," said Michael Medline, President & CEO, Empire. "We are a different Empire Company now, with the capabilities, processes, and disciplines in place to stay strong through tougher times as shown in our quarterly results. More than ever, we are focused on identifying novel ways to provide ongoing value to our customers, including through the recent launch of a new 11-week program that lowered or locked prices on approximately 1,000 items across many of our banners."

• Adjusted Metrics include adjusted operating income, adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted net earnings, and adjusted earnings per share ("EPS"). The Company is excluding from its Adjusted Metrics: costs incurred to plan and implement strategies to optimize the organization and improve efficiencies and expenses related to the Cybersecurity Event. See "Non-GAAP Financial Measures & Financial Metrics" section of this News Release.
• On November 4, 2022, Empire experienced IT system issues related to a cybersecurity event (the "Cybersecurity Event").

Sincerely,

(Signed) "Michael Medline"

Michael Medline

President and Chief Executive Officer

March 14, 2024

2

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE THIRD QUARTER AND YEAR-TO-DATE ENDED FEBRUARY 3, 2024

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following is Management's Discussion and Analysis ("MD&A") of the consolidated financial results of Empire Company Limited ("Empire" or the "Company") (TSX: EMP.A) and its subsidiaries, including wholly- owned Sobeys Inc. ("Sobeys") for the quarter and year-to-date ended February 3, 2024 compared to the quarter and year-to-date ended February 4, 2023. The MD&A should be read in conjunction with the Company's unaudited interim condensed consolidated financial statements and notes thereto for the quarter and year-to-date ended February 3, 2024 and the audited annual consolidated financial statements and the related MD&A for the fiscal year ended May 6, 2023. Additional information about the Company can be found on SEDAR+ at www.sedarplus.ca or on the Company's website at www.empireco.ca.

The unaudited interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34, "Interim financial reporting" as issued by the International Accounting Standards Board ("IASB") and are reported in Canadian dollars. The unaudited interim condensed consolidated financial statements should be read in conjunction with the Company's annual consolidated financial statements for the year ended May 6, 2023, which have been prepared in accordance with International Financial Reporting Standards as issued by the IASB ("IFRS Accounting Standards"). The unaudited interim condensed consolidated financial statements include the accounts of Empire and its subsidiaries and structured entities which the Company is required to consolidate.

The information contained in this MD&A is current to March 13, 2024 unless otherwise noted. There have been no material changes to disclosures as contained in the "Critical Accounting Estimates", "Contingencies" or "Risk Management" sections of the Company's MD&A for the fiscal year ended May 6, 2023 other than as noted in this MD&A.

FORWARD-LOOKINGINFORMATION

This document contains forward-looking statements which are presented for the purpose of assisting the reader to contextualize the Company's 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 "anticipates", "expects", "believes", "estimates", "intends", "could", "may", "plans", "predicts", "projects", "will", "would", "foresees" 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 aim to increase total adjusted earnings per share ("EPS") through net earnings, growth, and share repurchases, as well as its intention to continue improving sales, gross margin (excluding fuel) and adjusted earnings before interest, taxes, depreciation, and amortization ("EBITDA") margin, all of which could be impacted by several factors including a prolonged unfavourable macro-economic environment and unforeseen business challenges, as well as the factors identified in the "Risk Management" section of the fiscal 2023 annual MD&A;
• The Company's plans to further grow and enhance the Own Brands portfolio, which may be impacted by future operating costs and customer response;
• The Company's expectation that the transaction to purchase a parcel of land will close in the fourth quarter of fiscal 2024, which may be impacted by due diligence procedures;
• The Company's plan to invest $775 million capital in its network in fiscal 2024, (excluding the parcel of land it intends to purchase in the fourth quarter of fiscal 2024) including store expansions and renovations and renovate approximately 20% to 25% of the network over the next three years which could be impacted by cost of materials, availability of contractors, operating results, and other macro- economic impacts;
• The Company's expectation that it will continue its e-commerce expansion with Voilà, which may be impacted by future operating and capital costs, customer response and the performance of its technology provider, Ocado Group plc ("Ocado");

4

• The Company's expectation that it will continue to focus on driving efficiency and cost effectiveness initiatives which could be impacted by supplier relationships, labour relations, and other macro- economic impacts;
• The Company's expectations regarding the amount and timing of expenses relating to the completion of the future Customer Fulfilment Centre ("CFC"), which may be impacted by supply of materials and equipment, construction schedules and capacity of construction contractors;
• The Company's expectations regarding the impact of the Cybersecurity Event (as defined under the heading "Business Updates - Cybersecurity Event"), and the estimate of the impact on its financial results in fiscal 2024. These statements and expectations may be impacted by several factors including the nature, amount and timing of the insurance outcome;
• The Company's expectations related to the timing and amount of expenses relating to voluntary buyouts, which may be impacted by employee participation and labour relations;
• The Company's expectation of the impacts of cost inflationary pressures, which may be impacted by supplier relationships and negotiations and the macro-economic environment;
• The Company's expected contributions to its registered defined benefit plans, which could be impacted by fluctuations in capital markets;
• The Company's expectation that its cash and cash equivalents on hand, together with unutilized aggregate credit facilities and cash generated from operating activities will enable the Company to fund future capital investments, pension plan contributions, working capital, current funded debt obligations and ongoing business requirements, and its belief that it has sufficient funding in place to meet these requirements and other short and long-term obligations, all of which could be impacted by changes in the macro-economic environment, operating results; and
• The Company's plans to purchase for cancellation Non-Voting Class A shares ("Class A shares") under the normal course issuer bid, which may be impacted by market and macro-economic conditions, availability of sellers, changes in laws and regulations, and the results of operations.

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 the fiscal 2023 annual MD&A.

Although the Company believes the predictions, forecasts, expectations or conclusions reflected in the forward- looking information are reasonable, it can provide no assurance that such matters will prove correct. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such forward-looking information. The forward- looking information in this document reflects the Company's current expectations and is subject to change. The Company does not undertake to update any forward-looking statements that may be made by or on behalf of the Company other than as required by applicable securities laws.

5

OVERVIEW OF THE BUSINESS

Empire's key businesses and financial results are segmented into two reportable segments: (i) Food retailing; and (ii) Investments and other operations. With approximately $30.7 billion in annual sales and $16.6 billion in assets, Empire and its subsidiaries, franchisees and affiliates employ approximately 131,000 people.

Empire's Food retailing segment is carried out through Sobeys, a wholly-owned subsidiary. Proudly Canadian, with headquarters in Stellarton, Nova Scotia, Sobeys has been serving the food shopping needs of Canadians since 1907. Sobeys owns, affiliates or franchises more than 1,600 stores in all 10 provinces under retail banners that include Sobeys, Safeway, IGA, Foodland, FreshCo, Thrifty Foods, Farm Boy, Longo's and Lawtons Drugs, operates grocery e-commerce under the banners Voilà, IGA.net and ThriftyFoods.com, and operates more than 350 retail fuel locations.

Company Priorities

Over the last six years, the Company has successfully completed two transformation strategies, Project Sunrise and Project Horizon. These strategies have comprehensively reset Empire's foundation, enhanced the Company's data capabilities, deepened the understanding of customers, and prepared the business to effectively capture emerging trends. With these transformation strategies now accomplished and the turnaround complete, the Company aims to grow total adjusted EPS over the long-term through net earnings growth and share repurchases. The Company intends to continue improving sales, gross margin (excluding fuel) and adjusted EBITDA margin by focusing on priorities such as:

Continued Focus on Stores:

Over recent years, the Company has accelerated investments in renovations, conversions, and new stores along with store processes, communications, training, technology and tools. Investing in the store network will remain a priority, demonstrated by a sustained emphasis on renovations and continued store expansion in discount. The Own Brands program enhancement will remain a priority through increased distribution, shelf placement and product innovation.

The Company intends to invest capital in its store network and is planning to renovate approximately 20% to 25% of the network over the next three years. This capital investment includes important sustainability initiatives such as refrigeration system upgrades, heating, ventilation and air conditioning ("HVAC") system upgrades and other energy efficiency initiatives.

Enhanced Focus on Digital and Data:

The focus on digital and data will include continued e-commerce expansion with Voilà, loyalty, through Scene+ (see "Business Updates - Voilà" and "Business Updates - Scene+" for more information), personalization, improved space productivity and the continued improvement of promotional optimization. Space productivity will further enhance the customer experience by improving store layouts, optimizing category and product adjacencies and tailoring product assortment for each store. The advanced analytics tools built for promotional optimization will continue to be refined through the partnership between the advanced analytics team and category merchants.

Efficiency and Cost Control:

The Company has significantly improved its efficiency and cost effectiveness through sourcing efficiencies, optimizing supply chain productivity and improving systems and processes. The Company will continue to focus on driving efficiency and cost effectiveness through initiatives related to sourcing of goods not for resale, supply chain productivity and the organizational structure.

6

Business Updates

Scene+

In June 2022, the Company launched a new loyalty strategy through Scene+, one of Canada's leading loyalty programs. Along with Scotiabank and Cineplex, the Company is now a co-owner of Scene+. With its final launch in Quebec and Thrifty Foods in March 2023, the new loyalty program was successfully launched nationally. Scene+ has now grown to over 15 million members.

The Company's key priority with Scene+ is to accelerate program engagement by focusing on scaling personalization. By using machine learning and Artificial Intelligence algorithms, personalization recommendations will be improved, delivering the right message to the right customer at the right time, through the right channels.

FreshCo

In fiscal 2018, the Company announced plans to expand its FreshCo discount format to Western Canada with expectations of converting up to 25% of the 255 Safeway and Sobeys full-service format stores in Western Canada to the FreshCo banner.

Through the FreshCo expansion program, the discount business in Western Canada has grown significantly, driven by store conversions and regional expansion. The value proposition and strong multicultural assortment, along with the addition of the Scene+ loyalty program, has supported the growth and expansion of the discount format.

As at March 13, 2024, FreshCo has 47 stores operating in Western Canada, which completes the openings planned for fiscal 2024.

Voilà

In fiscal 2021, the Company introduced its new e-commerce platform, Voilà, which is the future of online grocery home delivery in Canada. Voilà is powered by industry-leading technology provided by Ocado through its automated CFCs. The Company will operate four CFCs across Canada with supporting spokes and curbside pickup. The Company will be able to serve approximately 75% of Canadian households representing approximately 90% of Canadians' projected e-commerce spend.

The Company has three active CFCs located in Toronto, Montreal and Calgary. The fourth CFC in Vancouver will service customers in British Columbia ("B.C.") starting in calendar year 2025. To service the remaining Canadian households located outside of the core CFC service areas, the Company also launched Voilà curbside pickup, which currently services 98 stores in locations across Canada and is also powered by Ocado technology.

In the first quarter of fiscal 2024, the Company completed its merger of Longo's e-commerce business, Grocery Gateway, into Voilà, thereby capturing logistics and delivery synergies. Operating as a 'shop in shop' has increased the reach of Longo's within Ontario and increased Voilà's product count. The Company now offers products from Sobeys, Farm Boy and Longo's through the Voilà platform.

In the quarter ended February 3, 2024, Voilà experienced a sales increase of 16.0% compared to the same quarter in the prior year. According to third-party market data, Voilà's national market share within the e- commerce channel continues to be higher versus the same quarter in the prior year.

Voilà's future earnings will primarily be impacted by the rate of sales growth, with operational efficiencies, strong margins, and cost discipline serving as important drivers to manage financial performance.

7

Cybersecurity Event

On November 4, 2022, Empire experienced IT system issues related to a cybersecurity event (the "Cybersecurity Event"). Upon discovery, the Company immediately activated its incident response and business continuity plans, including the engagement of world-class experts, isolated the source and implemented measures to prevent further spread.

The Company maintains a variety of insurance coverages, including cyber insurance. Empire is in the process of working with its insurance providers to finalize claims under its policies. Due to the complexity of the cyber insurance coverage and related claims, there is a time lag between the initial incurrence of costs and the recognition of anticipated insurance proceeds. While the operational impact of the Cybersecurity Event is behind the Company, management expects that there will be insurance recoveries recognized throughout fiscal 2024.

The financial impact of insurance recoveries on net earnings in the quarter and year-to-date ended February 3, 2024 was an expense of ($0.1) million and a recovery of $15.5 million, respectively. Impacts of the Cybersecurity Event, including the related insurance proceeds, are excluded from adjusted operating income(1), adjusted EBITDA(1), adjusted net earnings(1) and adjusted EPS(1) (collectively the "Adjusted Metrics"). The Company expects to recognize additional insurance recoveries throughout fiscal 2024, which will continue to be excluded from the Adjusted Metrics. Please refer to the "Summary Results - Third Quarter" section of this document for a more detailed discussion, including a reconciliation of these non-generally accepted accounting principles ("GAAP") financial measures.

Empire estimates, based on available information, that the final impact of the Cybersecurity Event on net earnings over fiscal 2023 and fiscal 2024 remains unchanged at approximately ($32.0) million, net of estimated insurance recoveries.

Sustainable Business Reporting

Environmental, Social and Governance ("ESG") has deep roots in the Company's history, and the principles of ESG have been a part of the organization since the Company started 116 years ago.

The Company published its 2023 Sustainable Business Report in July 2023 which outlines the Company's steady and tangible progress in achieving its ESG goals. The fiscal 2023 report presents key results in areas where the Company has the greatest impact across the three pillars of its ESG framework: People, Planet, and Products. Highlights of the progress made this year include: becoming the first grocery retailer in Canada to have science-based climate targets validated by the Science Based Targets initiative; donating more than 23 million pounds of surplus food to local charities from stores and warehouses through the Company's partnership with Second Harvest; raising and donating close to $19.0 million across Canada to support the Healthier Tomorrows Community Investment strategy; and continued progress on embedding Diversity, Equity

• Inclusion ("DE&I") more broadly across the organization, with over 90% of Directors and above having set DE&I performance and accountability goals. In addition, the Company also recently conducted the first climate scenario risk assessment on its operational footprint and published its inaugural Taskforce on Climate-Related Financial Disclosures-aligned report.

The Company is focused on several initiatives as part of a continuing ESG journey such as carbon reduction projects to achieve its Scope 1 and 2 climate targets, reducing or eliminating avoidable and hard-to-recycle plastics, expanding the Company's efforts to cultivate a fair, equitable and inclusive environment for all, and embedding sustainable business mandates within the Company's performance management goals.

(1) See "Non-GAAP Financial Measures & Financial Metrics" section of this MD&A.

8

Other Items

Farm Boy - acquisition of remaining interest

As part of the Farm Boy acquisition, members of the Farm Boy senior management team (the "Stakeholders"), retained a 12% interest in Farm Boy, resulting in a non-controlling interest. The parties entered into put and call options such that the Stakeholders could put, and Sobeys could call, the remaining 12% at any time after five years following the acquisition date. Since the date of acquisition, the Company recorded a financial put liability based on the present value of the amount payable on exercise of the put option in accordance with IFRS 9. On January 6, 2024 the Company received formal notice from the Stakeholders exercising their put options.

Subsequent to the quarter ended February 3, 2024, the Company acquired the remaining 12% non-controlling interest in Farm Boy for $77.1 million and the put option liability was settled in cash. Farm Boy's key management team will remain unchanged following this transaction.

Labour Buyouts

On October 20, 2023, United Food and Commercial Workers ("UFCW") 1518 and UFCW 247 ratified new agreements with the Company. The new agreements allow the Company to offer voluntary buyouts to senior B.C. Safeway unionized employees. Employee buyouts provide flexibility and stability for the Company to better manage labour and operational costs. During the quarter ended February 3, 2024, the Company initiated the buyout process, and has offered the impacted employees the ability to elect to accept the buyout packages. As a result, the Company expensed $3.8 million in the quarter ended February 3, 2024 and expects to record additional amounts of $5.6 million in the fourth quarter of fiscal 2024.

Distribution Centre Strike

On October 14, 2023, teammates at a distribution centre in Ontario went on strike after negotiations between the union and the Company were unsuccessful in agreeing on the terms of a new collective bargaining agreement. The strike ended on January 13, 2024, after an agreement was reached. The impact of the strike on net earnings for the quarter ended February 3, 2024 was not material.

Western Canada Fuel Sale

On December 13, 2022, the Company signed a definitive agreement between a wholly-owned subsidiary of Sobeys and Canadian Mobility Services Limited, a wholly-owned subsidiary of Shell Canada, to sell all 56 retail fuel sites in Western Canada for approximately $100.0 million. Following regulatory review and approval, the sale ("Western Canada Fuel Sale") was completed on July 30, 2023.

9