Loblaw Companies

Loblaw Companies Limited

Company type	Public (TSX: L)
Industry	Retail
Founded	1956
Headquarters	Brampton, Ontario, Canada
Key people	Galen G. Weston, Executive Chairman
Products	Groceries, General Merchandise, Drugstores, Financial Services
Owner	W. Galen Weston and George Weston Limited (63% owership)
Number of employees	130,000
Website	www.loblaw.ca

Loblaw Companies Limited (TSX: L) (LCL) is the largest retailer in Canada, with over 1,690 supermarkets operating under a variety of regional banners, including the namesake Loblaws. LCL is headquartered in a new, 37,000 m² office tower located in Brampton, Ontario. Loblaw encompasses 1,100 corporate and franchised stores, 800 associate stores and 9,000 independent stores.

It is Canada's largest retailer with sales of more than C$29 billion in 2007. The company is also one of the largest employers in Canada with more than 130,000 full-time and part-time employees. Employees at Loblaw, with the exception of management and employees at The Real Canadian Wholesale Club in Alberta (who are members of the Christian Labour Association of Canada), are members of the United Food and Commercial Workers labour union.

Loblaw's regional divisions include Westfair Foods Ltd. (western Canada and northern Ontario), National Grocers (southern Ontario), Provigo Inc. (Quebec) and Atlantic Wholesalers Ltd. (Atlantic Canada).

Banners

Loblaw operates under a number of different regional banners throughout Canada. While most of these banners are not likely to be abandoned in the near future, the company's current focus is on developing the large-format Real Canadian Superstore banner - which is gradually replacing some Loblaws and Zehrs locations in Ontario - as a national rival to Wal-Mart.

Additionally, as part of a recent agreement with unionized employees in Ontario, Loblaw announced it would introduce a new food-centred supermarket format originally called the "Great Canadian Food Store" for locations not converted to the Superstore format. This format has since opened under the name "Loblaw Great Food", with new superstores being opened as "Loblaw Superstore". In total, 44 existing Ontario stores are to be converted to either the Superstore or Great Food format between 2006 and 2010, in addition to new construction and existing Superstores.

However, Loblaw has said it plans to keep the "Loblaws" name at some locations.

The banners are listed below based on their format classifications within Loblaw. Some individual locations may not match the specified format.

• Superstore:
  • Atlantic Superstore (Maritimes)
  • Dominion Stores (Newfoundland and Labrador)
  • Loblaw Superstore/Loblaw Real Canadian Superstore (Ontario) (Ontario and Western Canada)
  • Maxi & Cie (Quebec)
• "Great Food":
  • Loblaws / Loblaw Great Food (Toronto and area, London, southeastern Ontario, Ottawa, and Quebec)
  • Provigo (Quebec; some franchised)
  • Zehrs / Zehrs Great Food (Southwestern Ontario excluding London, Sarnia and Collingwood)
  • Primarily franchised:
    • SaveEasy (Atlantic Canada)
    • Fortinos (Hamilton and some Toronto suburbs)
    • SuperValu (Western Canada)
    • Shop Easy Foods (Western Canada)
    • Lucky Dollar Foods (Western Canada)
    • Red & White Food Stores (Atlantic Canada)
    • Valu-mart (Ontario)
    • Freshmart (Rural and Northern Ontario, Nova Scotia)
    • Your Independent Grocer (Ottawa area; northern Ontario)
• Hard discount
  • Extra Foods (Western Canada; some franchised)
  • Maxi / Maxi & Cie (Quebec)
  • No Frills (Ontario, Alberta, and British Columbia; franchised)
• Wholesale / Cash and carry:
  • Atlantic Cash & Carry (Atlantic Canada)
  • Entrepôts Presto / Club Entrepôt Provigo (Quebec)
  • NG Cash & Carry (Ontario)
  • The Real Canadian Wholesale Club (Ontario, Western Canada and Nova Scotia)
• Liquor
  • Real Canadian Liquorstore (Alberta)
• Defunct banners
  • Atlantic SuperValu (Atlantic Canada)
  • Econo-Mart (Western Canada)
  • OK Economy (Western Canada)
  • Mr Grocer (Ontario Canada)
  • Super Centre (Ontario Canada)

In-store brands

Loblaw has a number of common products and services at many of its stores regardless of banner. These include:

• President's Choice and no name private label products
• DRUGStore Pharmacy
• "Upstairs at (store name)", a community room / cooking school. The cooking school offers kids, adults and teen cooking classes. As well, community room space is available for rent, and completely organized cooking birthday parties are available for children ages 5-16.
• Joe Fresh Style, a clothing line
• President's Choice Financial banking services, operated in association with CIBC.

History

Loblaw was started in 1919 by Theodore Pringle Loblaw and Justin Cork at the beginning of the "supermarket" revolution. During the 1930s, it grew to become a chain of more than 80 stores.

In 1947, George Weston Limited acquired a controlling interest in the company, which became Canada's largest grocery retailer and the third largest in North America.

Loblaw Companies Limited was incorporated in 1956. Throughout the 1970s and 1980s, it introduced its private label brands: “no name” for generic products, “President's Choice” for superior quality products, “Too Good to be True” (now "Blue Menu") for nutritious healthy products, and “Green” for environmentally friendly products. Dave Nichol, Loblaw's president at the time, was the company's spokesperson.

From 1961 to 1971, it operated a discount department store, Sayvette.

Loblaw was known in the United States primarily for its National Supermarkets chain that operated in Missouri, Illinois and Louisiana. Originally purchased from the National Tea Company, National Supermarkets was a major supermarket chain in the St. Louis, Missouri area until its 1995 sellout to Schnuck Markets.

Loblaw has started to bring its Real Canadian Superstore banner to Ontario. The 13,000 m² (140,000 ft²) stores, which currently includes a chain of private liquor stores operating in Alberta, are well known in Western Canada for their food and general merchandise offerings. Many of these new stores were originally going to be large Loblaws Market or Zehrs Market stores but now will instead be branded as Superstores. Analysts say that Loblaw made this decision in reaction to Wal-Mart's announcement to open three Supercentres in Canada by the end of 2006.

While several of Loblaws Superstore locations are now open, the most high-profile Real Canadian Superstore location will be in Maple Leaf Gardens in Toronto.

The first Valu-mart was established in Clinton, Ontario and still exists today.

Loblaws' home brand, President's Choice was launched in 1984. The most successful PC product to date is President's Choice The Decadent chocolate-chip cookies.

Management shakeup

In September 2006, following numerous quarters of poor results and the stock's drop in value by a third, Loblaws president John Lederer resigned by mutual agreement and was replaced by former Canadian Tire retail president Mark Foote. Galen Weston, the majority owner of Loblaws' parent company, resigned as chairman and was succeeded by his son Galen Jr.. Allan Leighton, a longtime advisor to the senior Weston, was brought as Deputy Chairman. Lederer's predecessor Richard Currie criticized the move as unnecessary, while Dave Nichol said that management shakeup was overdue.

Much of the results were blamed on Lederer's plan to combat the threat of Wal-Mart Supercentre grocery stores. Consolidating its distribution centres, which supposedly made the supply chain more efficient, resulted in the departure of many of the chain's general merchandise buyers who were unwilling to move. There were numerous delays and coordination problems as suppliers had trouble shipping their goods to stores on time, and Loblaws was forced to mark it down in order to liquidate excess inventory. Expanding its inventory to general merchandise, supposedly to make a one-stop location like Wal-Mart Supercentres, was considered by many customers to be below the standards of Loblaws. [3] [4]

Criticism

In November 2008, Greenpeace alleged that Loblaw is currently selling 14 out of 15 of the fish species on that organization's "redlist" of species considered to be the most destructively farmed, and staged protests at some Toronto-area locations. The company denies the allegations, while the accuracy of the "redlist" itself has been challenged by U.S. government regulators and by the fish industry.

Corporate governance

Current members of the board of directors of Loblaw Companies Limited are: John Cassaday, Camilla Dalglish, Robert Dart, Anthony Fell, Mark Foote, Anne Fraser, Anthony Graham, Pierre Michaud, Thomas O'Neill, G. Joseph Reddington, T. Iain Ronald, Galen G Weston (executive chairman), Allan Leighton, and Joseph Wright.

External links

• Loblaw Companies Limited
• History of National Supermarkets