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.
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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