Loblaw to create 20,000 jobs through $1bn expansion program

Loblaw Companies Limited (TSE:L, Mkt cap 28.63B, P/E 46.11, Div/yield 0.25/1.43, EPS 1.52, Shares 407.42M) says its plans to build 50 new stores and renovate 150 existing ones will create thousands of retail and construction jobs, The Canadian Press reports.

Loblaw jobs expansion program

Loblaw to create 20,000 jobs through $1bn expansion program

This year’s expansion will add around 5,000 new store employees while creating roughly 15,000 construction jobs, said Catherine Thomas, Loblaw’s director of external communications, in an email.

That would see Loblaw’s employee base increase by 2.6%, as per the most recent annual information form which puts staff at the 192,000 mark.

The stores will include both grocery stores of various banners as well as Shoppers Drug Mart locations. However, the largest food retailer in Canada remained tight-lipped on where the new stores will be located.

The Brampton-based company will invest $1 billion in the expansion, while Choice Properties REIT, a real estate investment trust, will contribute $300 million.

“We continue to invest in our business in ways that matter for the Canadian economy and the millions of Canadians who shop with us each week,” Galen G. Weston, the company’s president and executive chairman, said in a statement.

The announcement bears similarities to one made early last year, when it said it would build 50 new stores and improve more than 100 others. It then took the decision in July 2015 to close 52 locations across Canada, with the stores having fallen short of expectations.

In her email, Thomas explained how the completion and success of multiple IT and supply chain investments over the past few years gives Loblaw leverage to direct more of its capital on stores.

It will also direct some of the $1-billion towards its e-commerce, IT infrastructure and supply chain projects, the firm added.

Brampton, Ontario based Loblaw provides grocery, pharmacy, health and beauty, apparel, general merchandise, and financial products and services. The Company operates through three segments: Retail, Financial Services and Choice Properties. The Retail segment consists of retail food and associate-owned drug stores, and also includes in-store pharmacies and other health and beauty products, gas bars and apparel and other general merchandise. The Financial Services segment provides credit card services, loyalty programs, insurance brokerage services, personal banking services, deposit taking services and telecommunication services. The Choice Properties segment owns and leases income-producing commercial properties. Its subsidiaries include Loblaws Inc., Shoppers Drug Mart Corporation, President’s Choice Bank, Choice Properties Real Estate Investment Trust and Choice Properties Limited Partnership. More from Reuters » 

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Canada Stockwatch – Loblaw Shifting Investment In The Direction Of Consumers

Canada Stockwatch – Loblaw to spend $1.2B on 50 new stores in 2015

Canada Stockwatch – Canadian food retailer Loblaw Companies Limited (TSE:L, Mkt cap 25.31B, P/E – , Div/yield 0.25/1.60, EPS -0.02, Shares 412.48M) has announced it will build 50 new stores, under its own banners and that of Shoppers Drug Mart, as part of a $1.2-billion spending plan in 2015.

Canada Stock Watch Loblaw will build 50 new stores Shoppers Drug Mart

Canada Stock Watch – Loblaw will build 50 new stores, under its own banners and that of Shoppers Drug Mart.

As the Financial Post reports, the Brampton-based firm will also renovate more than 100 existing stores, as investment shifts away from heavy infrastructure and IT rollout toward customer-facing retail refurbishments.

Loblaw, which has a network of 2,300 locations across the country, estimates the projects will create around 5,000 jobs at its corporate and independently owned grocery outlets.

Loblaw chief financial officer Richard Dufresne explained that move marks a change in emphasis for the retailer:

“The majority [of 2015 capital expenditures] are going into retail, where the portion [spent] on infrastructure is reducing every year, and it’s continuing to reduce next year,” he told analysts on a conference call last week.

Analysts suggest the decision could prove to be a wise one, with grocery retailers required to refresh their formats regularly every few years in order to stay at the forefront of a hyper-competitive Canadian market.

“Every three to five years you have to tune up your footprint as a retailer. You have to keep evolving. If you don’t do that, you start to lose relevance and your customers will take notice, and you will lose market share,” Edward Winder, senior advisor at retail consultancy J.C. Williams Group, told the Post.

He added that the need to remain relevant is especially important for a retailer such as Loblaw, whose consumers are a little more affluent and have greater expectations of their in-store experience.

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Stockwatch – Loblaw Reaping Immediate Rewards Of Shoppers Drug Mart Acquisition

Stockwatch – Loblaw Companies Limited (TSE:L, Mkt cap 24.24B, P/E 1 year forward 19.61, Div/yield 0.25/1.67, EPS 0.18, Shares 412.70M) has reported better than expected results for the third quarter, with lower net income offset by higher adjusted earnings.

Stockwatch Galen Weston Loblaw president

Stockwatch – Galen Weston, Loblaw’s president happy with the company’s “solid performance”

It represents the first set of results since completing its acquisition of Shoppers Drug Mart Corp., which saw Canada’s largest grocery company join forces with the country’s largest pharmacy retailer.

Loblaw, majority-owned by George Weston Ltd., bought the pharmacy chain last year in an attempt to better compete with the Canadian businesses of U.S.-based rivals such as Wal-Mart Stores Inc. and Target Corp., which have quickly expanded in the country.

Loblaw had 90 cents per share of adjusted basic net earnings, or $371 million, which marks a 23% increase from a year earlier and three cents better than analyst estimates.

Its revenue, too, showed cause for optimism, increasing 35.9% compared with a year earlier, rising to $13.6 billion. Setting aside income from Shoppers, Loblaw’s revenue was up more than 2% to $10.2 billion, an increase of roughly $203 million.

However, the positive news is tempered by the fact that its net income declined by 5.3% to $142 million, from $150 million in the corresponding three-month period last year. The Brampton-based firm attributed this to a decrease in operating income, which fell to $335 million from $375 million, before adjustments.

Excluding Shoppers Drug Mart, adjusted operating income increased 74.2% to $669 million from $384 million.

Galen G. Weston, Loblaw’s president and executive chairman, appeared content with the company’s “solid performance” and said the firm remained on course to meet its deleveraging targets.

“In the third quarter we continued to advance our strategic initiatives and improve our market position,” he added.

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Stock Watch > Loblaw Buys Middle Eastern Grocer Arz Fine Foods

Stock Watch > Loblaw’s transaction allows it to diversify its cultural footprint and respond to Canadians’ growing appetite for international food.

Loblaw Companies Limited (TSE:L, Mkt cap 19.65B, P/E 21.44, Div/yield 0.25/2.06, EPS 2.22, Shares 412.73M), Canada’s largest food retailer, has taken over Middle Eastern grocer Arz Fine Foods in a transaction allowing it to diversify its cultural footprint and respond to Canadians’ growing appetite for international food.

Stock Watch Loblaw Buys Middle Eastern Grocer Arz Fine Foods

Stock Watch > Loblaw Buys Middle Eastern Grocer Arz Fine Foods to respond to Canadians’ growing appetite for international food.

Arz Fine Foods owns a grocery store and bakery in Toronto selling deli items, fresh produce, halal meat, groceries and ready to eat foods. It will now operate as a unique division of the Brampton-based grocer. The deal means that many of Loblaw’s 1,050 stores will soon start selling branded products for which Arz Fine Foods is popular, like its hummus and baba ghanoush dishes. The Arz label baklava is already on the shelves at some Real Canadian Superstore and Loblaw outlets.

The acquisition comes several years after Loblaw bought Canada’s premier Asian supermarket chain T&T as part of its strategy to attract New Canadian clients, adding 58 items to its product range. Food sales aimed at this segment of Canada’s society are forecast to generate an additional $5 billion for local manufacturers alone in four years, market researcher Nielsen predicted in 2013.

Loblaw said it would rely on the same approach it used for the T&T chain, which brought an ethnic taste to its business in an authentic way, its president Vicente Trius said.

Currently, Canada’s Middle Eastern demographic accounts for 2% of the country’s total population and is considered one of the fastest growing market segments.

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