Loblaw Companies

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Loblaw Companies Limited (TSX: L) is the largest food retailer in Canada, with over 1,690 supermarkets operating under a variety of regional banners, including the namesake Loblaws. Headquartered in Brampton, it is Canada's largest retailer with sales of more than 23 billion Canadian dollars in 2002.

The company is also one of the largest employers in Canada with more than 130,000 full- and part-time employees. Employees at Loblaw, excluding management, and employees at The Real Canadian Wholesale Club(s) in Alberta, who are members of the Christian Labour Association of Canada are members of the United Food and Commercial Workers labor union. Loblaw encompasses 1,100 corporate and franchised stores, 800 associate stores and 9,000 independent stores.

Loblaw owns the private label brands President's Choice and No Name, with more than 5,000 products. The President's Choice, or PC brand, is innovative as it was amongst the first private labels to be marketed as a higher-quality product, as opposed to other stores' generic brands. Frequent print and television advertising is used to pitch new PC products.

The company provides financial services under the PC Financial name.

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

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[edit] Banners

Loblaw operates under a number of different regional banners throughout Canada, including the following. 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 is expected to introduce a new, food-centric supermarket format tentatively called "Great Canadian Food Store" for locations not converted to the Superstore format. The name is subject to change; converted locations may simply use their existing banners. In total, 44 existing Ontario stores are to be converted to either the Superstore or Food Store format between 2006 and 2010, in addition to new constructions and existing Superstores. [1]

    • Econo-Mart (Western Canada)

[edit] History

Loblaw was started in 1919 by Theodore P. 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” for nutritious healthy products and “Green” for environmentally friendly products. Dave Nichol, Loblaws 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, which currently inlcudes a chain of private liquor stores operating in Alberta. The 13,000 m² (140,000 ft²) stores are well known in Western Canada, with 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 Loblaw's 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 in Clinton, Ontario and still exists today.

[edit] Management shakeup

In September 2006, Loblaws president John Lederer resigned by mutual agreement, following numerous quarters of poor results and the stock's drop in value by a third, being 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's Supercenter 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 markdown it in order to liquidate excess inventory. Expanded its inventory to general merchandise, supposedly to make a one-stop location like Wal-Mart Supercenters, was considered by many customers to be below the standards of Loblaws. [2] [3]

[edit] Controversy

In 1990, there was a workers' strike in Windsor, Ontario, regarding pay wage increases. Loblaws' closed the doors to the Loblaw store in Windsor, Ontario (Now its east-end Zehrs Food Plus Market). The strike quickly got out of hand and with both sides unwilling to negotiate, the City of Windsor and Essex County barred Loblaws from operating any stores under that name. They converted the remaining Loblaws stores to the Zehrs brand, and to the Real Canadian Superstore brand.

[edit] 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), and Joseph Wright.

[edit] External links

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