Loblaw Companies


Loblaw Companies
Loblaw Companies Limited
Type Public (TSXL)
Industry Retail
Founded 1919
Headquarters Brampton, Ontario, Canada
Key people Galen G. Weston, Executive Chairman
Products Groceries, General Merchandise, Drugstores, Financial Services
Owner(s) George Weston Limited (63% ownership)[1]
Employees 139,000
Website www.loblaw.ca

Loblaw Companies Limited (TSXL) (LCL) is the largest food retailer in Canada, with over 1,400 supermarkets operating under a variety of regional banners, including the namesake Loblaws. LCL is headquartered in Brampton, Ontario.[2] Loblaw encompasses 1,036 corporate and franchised stores, 376 associate stores and 4,692 independent stores.[3]

It is Canada's largest retailer with sales of more than C$30 billion in 2008.[4] The company is also one of the largest employers in Canada with more than 139,000 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).

Contents

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. In 1955, the company entered the United States with its purchase of the National Tea Company, the largest grocery chain in the Mississippi Valley. Eventually, National, renamed National Supermarkets, was pared down to operations in Missouri, Illinois and Louisiana. It was a major chain in the St. Louis and New Orleans areas until Loblaw sold it off in 1995.

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 has started to bring its Real Canadian Superstore banner to Ontario.[when?] 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 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 in as Deputy Chairman, and Dalton Philips as COO. 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]

2008–2009

In November 2008, Greenpeace alleged that Loblaw was 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.[5] The company denied the allegations,[6] while the accuracy of the redlist itself has been challenged by U.S. government regulators and by the fish industry.[7] Loblaw has since committed to sourcing all of its seafood from sustainable sources by 2013, and now features several Marine Stewardship Council-certified products under its President's Choice product line.[8] Greenpeace's ratings of Loblaw's seafood initiatives have improved over the years and are now above all other national retailers (and second-highest of all retailers ranked), but were still classified as a failing grade in its 2010 report, based on an absence of labelling indicating where or how seafood is fished or farmed, and continued sale of some redlist species.[9]

On July 24, 2009, Loblaw announced its purchase of T & T Supermarket Inc., Canada's largest Asian food retailer, for about $225 million: $191 million in cash, and the rest in preferred shares issued by T&T. The value of the preferred shares will be tied to the future performance of the business.[10]

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 were planned to be converted to either the Superstore or Great Food format between 2006 and 2010, in addition to new construction and existing Superstores.[citation needed]

The banners are listed below based on their format classifications within Loblaw.[11] Some individual locations may not match the specified format.

Superstore

"Great Food"

Primarily franchised

Hard discount

Wholesale / Cash and carry

  • Atlantic Cash & Carry (Atlantic Canada)
  • Entrepôts Presto (Quebec)
  • Club Entrepôt (Quebec - formerly Club Entrepôt Provigo)
  • NG Cash & Carry (Ontario)
  • The Real Canadian Wholesale Club (Ontario, Western Canada and Nova Scotia)

Liquor

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 and Loblaw 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, a clothing, accessories and cosmetics brand
  • President's Choice Financial banking services, operated in association with CIBC.

Corporate governance

Current members of the board of directors are: Galen G. Weston (Executive Chairman), Allan Leighton (Deputy Chairman and President), Stephen E. Bachand, Paul M. Beeston, Gordon A. M. Currie, Anthony S. Fell, Christiane Germain, Anthony R. Graham, John S. Lacey, Nancy H. O. Lockhart, Thomas C. O'Neil, and John D. Wetmore.[12][13]

See also

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References

  1. ^ [1] Retrieved February 19, 2008
  2. ^ "Address." Loblaw Companies Ltd. Retrieved on March 8, 2011. "Loblaw Companies Limited 1 President’s Choice Circle Brampton, Ontario, Canada L6Y 5S5"
  3. ^ Loblaw Companies 2008 Annual Information Form
  4. ^ "Loblaw Companies 2008 Annual report". http://www.loblaw.ca/en/pdf_en/lcl08_arfull_en.pdf. Retrieved 2009-03-28. 
  5. ^ [2]
  6. ^ Greenpeace Claims Endangered Fish Found On Loblaws Shelves, CityNews, November 6, 2008
  7. ^ Melissa Allison, Greenpeace gives grocery chains failing grades on seafood buying practices, The Seattle Times, June 19, 2008
  8. ^ "Loblaw modifies select fresh fish and seafood counters to highlight "at risk" fish and suggested alternatives", Loblaw press release, February 4, 2010. Retrieved July 28, 2010.
  9. ^ "Canadian supermarkets move one step closer to ocean protection: Greenpeace", Greenpeace press release, June 2, 2010. Retrieved July 28, 2010.
  10. ^ Loblaw buying T&T Asian food chain , Canadian Broadcasting Corporation, July 25, 2009
  11. ^ Loblaw Companies 2006 Annual Report
  12. ^ George Weston Limited (2011). REPORT UNDER NATIONAL INSTRUMENT 51-102 REPORT OF VOTING RESULTS (Report). CDS INC. http://sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00001956. Retrieved 2011-05-25. 
  13. ^ Loblaw Companies Limited (2011). Management Proxy Circular (Report). CDS INC. http://sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00001956. Retrieved 2011-05-25. 

External links


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