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TORONTO — The parent company of grocery retailer Sobeys Inc. has a lingering, severe case of indigestion in the wake of its acquisition of the Western Canadian Safeway chain three years ago, posting a huge quarterly loss Wednesday, taking a $1.3-billion impairment charge and sending its stock into a tailspin.

At the end of the day, Empire Co. Ltd. shares plunged nearly 10 per cent as executives admitted there is much work to be done in order to remedy problems in its supply chain, tweak its house-branded private label products and find the right pricing mix at its stores.

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“It’s not simple promotional fixes that will get the job done,” said Empire’s CEO Marc Poulin on a morning conference call with analysts. “It’s more fundamental changes that will adapt the business for our customers.”

Canada’s second largest grocer has suffered amid stiff competition from lower-priced discount chains, such as No Frills and Walmart, particularly in areas of the country where consumers are feeling the oil industry downturn.