Loblaw Cos. Ltd. (TSE:L) has reported a rise in profit and revenue for the third quarter, driven by increased traffic at its discount stores. The company is actively expanding its footprint of discount stores to meet consumer demand amid high food inflation.
Chairman Galen Weston highlighted the success of Maxi and No Frills stores, which experienced double-digit growth in the quarter. Loblaw has opened 23 discount stores this year, including new locations and converted stores. Plans for the coming year involve converting 30 more stores and opening 40 new locations nationwide. Most conversions will occur in Quebec, with around 60% of the new stores being Shoppers Drug Marts and the rest primarily discount grocery stores.
Sales of in-house brands like No Name and President’s Choice continued to outpace national brands, reflecting a preference for lower-priced products among shoppers. Weston emphasized that the shift toward discount stores shows no signs of slowing down, and the company anticipates this trend to continue for the foreseeable future.
Loblaw’s parent company reported a profit available to common shareholders of $621 million or $1.95 per diluted share for the 16-week period ended Oct. 7, compared to $556 million or $1.69 per diluted share in the same quarter the previous year. Revenue for the quarter totaled $18.27 billion, up from $17.39 billion in the same quarter last year.
Food retail same-store sales rose by 4.5%, and drug retail same-store sales increased by 4.6%, driven by front-store same-store sales growth of 1.8% and pharmacy same-store sales growth of 7.4%. The company noted a decline in retail gross margin due to promotions and increased shrink (theft), with its internal food inflation metric lower than Canada’s overall food inflation rate. On an adjusted basis, Loblaw reported earnings of $2.26 per diluted share, up from $2.01 per diluted share in the same quarter a year earlier.
Featured Image: Unsplash @ Scott Evans
Author Faith Yakubu 
