Loblaw Companies

Loblaw Companies Limited, a food and pharmacy company, engages in the grocery, pharmacy, health and beauty, apparel, general merchandise, financial services, and wireless mobile products and services businesses in Canada. It operates in two segments, Retail and Financial Services. The Retail segment operates corporate and franchise-owned retail food, and associate-owned drug stores. This segment also includes in-store pharmacies, other health and beauty product stores, apparel stores, and other general merchandise stores. The Financial Services segment provides credit card and banking services, the PC Optimum program, insurance brokerage services, and telecommunication services. It also offers PC Health app, a health and wellness app that provides Canadians with access to healthcare resources and support. Loblaw Companies Limited provides its products and services under various brands. The company was founded in 1919 and is headquartered in Brampton, Canada. Loblaw Companies Limited operates as a subsidiary of George Weston Limited.

In 1919, Toronto grocers Theodore Pringle Loblaw and J. Milton Cork opened the first Loblaw Groceterias store modelled on a new and radically different retail concept, namely "self serve". The traditional grocery store provided a high level of personal service but was a labour-intensive operation. Customers typically had to wait while a clerk fetched items from behind a counter. Other goods, such as sugar and flour, had to be individually weighed and the order then tallied by hand and added to the customer’s account. Home delivery, by wagon, was usually included free of charge. Loblaw and Cork, friends from the days when both worked as young clerks in the Cork family grocery store, believed they could cut costs by introducing self service combined with cash and carry. While cash stores were not new, the idea of allowing customers to select their own merchandise was a new concept. The pair had heard of the Piggly Wiggly "self serving store" in the United States and travelled to Memphis, Tennessee, to see it in operation first hand. With customers allowed to browse freely, pick up their own goods and then pay cash at a central checkout counter, with no credit or home delivery, operating costs were reduced. The two came away convinced that a similar style of operation could work in Canada. But Loblaw had his sceptics:

In the early days when I started the cash and carry business, I was told that

it could not be done, but my contention was that the people of Toronto and

The first Loblaw Groceterias Co. store opened at 2923 Dundas St. W., Toronto, in June 1919. Months later, a second location, at 528 College Street, followed. The ’groceterias’ name was apparently derived from cafeteria - a popular self serve restaurant format. Along with the Loblaw name, the outlets featured big "We Sell For Less" signs across their storefronts. Inside, the stores were clean and well lit, with items neatly displayed and clearly marked:

From the entry, one passes through a turnstile which permits egress only. Just inside are piles of market baskets from which the customer helps himself and proceeds in his quest for food at lower prices. Out in front, the shelves are packed with bottled and canned goods, whose names are household words, all plainly tagged with price. Further back, one finds teas, coffee fancy biscuits and cheese, all wrapped ready to carry home .... The customer having selected her purchases, carries her basket to one of the counters near the point of exit. Here her purchases are quickly totaled on an adding machine and she receives her slip. While she pays the bill her groceries are neatly packed in a larger bag.."

While produce was limited and fresh meats largely excluded from the early stores, sales proved strong. Within its first 5 months of operation, the chain's second location had expanded its sales room into that part of the store normally reserved for storage. In spite of the success of the new groceteria format, Cork did not feel that traditional, full-service grocery stores were in danger of going out of business since many customers still valued the extension of credit, individual serve and home delivery. A year later, another Toronto grocer, C.B. Shields, joined with Loblaw and Cork.

In addition to being a proponent of self serve, Loblaw was also a firm believer in "the fundamentally sound principle of the chain store system" and its ability to deliver better price and superior quality to through its buying power. Three years after the opening of the first store, there were nine groceterias throughout Toronto. The company had also expanded into the United States with Loblaw Groceterias Inc. outlets in Buffalo, New York.

In 1928, with 69 stores throughout Ontario, the company unveiled its new state-of-the-art head office and warehouse at Fleet and Bathurst streets, along today’s Lake Shore Blvd, in Toronto. At a cost of $1.25 million, the Loblaw warehouse was likened to a "temple of commerce" and hailed as a model of efficiency. One newspaper report described it as, "the most modern warehouse building of its kind in the dominion." The warehouse, which served as a distribution centre and manufacturing depot, included an interior loading dock that could simultaneously accommodate eight railway freight cars and 23 large trucks. It featured its own electric tram railway, four giant ovens for baking a ton of cake and half a ton of cookies a day, huge drums for blending tea, 22 thousand feet of ammonia-filled pipes for refrigeration, and a system of pneumatic tubes for sending messages from department to department. A "punched card" tabulating system, forerunner to today's computer, would be installed for tracking inventory as the first of its kind in the Canadian grocery industry. For Loblaw employees, the warehouse included amenities such as bowling lanes and a billiards room, along with an auditorium for putting on plays. That same year, the American company expanded beyond New York State with the opening of outlets in Chicago, Illinois.

By October 1929, Loblaw Groceterias' rapid expansion had attracted the attention of competitor Dominion Stores Limited, another Toronto-based food store chain. In a letter to its shareholders, Dominion management put forward a plan to purchase a controlling interest in Loblaw, funded by a preferred share offering. Weeks later, though, stock markets around the world collapsed and the

company made a partial retreat from the U.S. market with the sale of its 77

stores in Buffalo, New York, which were profitable operations.In 1933, company co-founder Theodore Pringle Loblaw died suddenly of

philanthropy that benefited local charities such as the Kiwanis Boys Clubs of Toronto and the Stevenson Memorial Hospital of his hometown of Alliston, Ontario. After Loblaw's death, co-founder John Milton Cork took charge of the company.

'self serve' format and the need to cut meats and weigh produce, the new departments proved popular with customers. By 1936, over

half of all Ontario locations had been converted to the new format that expanded sales "without a corresponding increase in store

overhead." The company also began updating the appearance of its stores to the new, modern, streamlined look. In terms of

of 100,000 Class B shares of Loblaw Groceterias Co. Limited by Canadian industrialist W. Garfield Weston. Weston, president of George Weston Limited, whose interests included baking, grocery wholesaling, and paper manufacturing, acquired the block of voting stock from Loblaw co-founder J. Milton Cork. Although the share purchase did not represent majority control of Loblaw, Weston was able to have his old friend and colleague George C. Metcalf appointed to the board of directors, as well as named vice president and general manager. By 1953, though, Garfield Weston had secured majority control through parent company George Weston Limited and Metcalf was appointed

president of Loblaw Groceterias. With Weston in control, a program of rapid expansion, particularly through acquisition, followed as the company extended its holdings beyond Ontario into other regions of Canada and into the United States.

In 1953, Loblaw Groceterias acquired majority control of Loblaw Inc., the former American branch of the company with stores in New York State, Pennsylvania, and

in Chicago-based National Tea Co., a major supermarket chain with some 750 stores in twelve states, three years later. With an ever-increasing array of retail assets, Loblaw Companies Limited was incorporated in 1956 as holding company for Loblaw Groceterias and the recently acquired holdings south of the border. That same year, Loblaw also announced a major new thrust into Western Canada with 32 supermarkets slated for

construction. Other acquisitions followed, including Atlantic Wholesalers in the Maritimes with its associated retail outlets. At its height, Loblaw Companies Limited would represent the third largest grocery retailer in

As large as Loblaw had grown, food retailing remained highly competitive and special promotions and customer loyalty programs were introduced as a way of attracting and retaining consumers. During the 1950s, car giveaways were a popular highlight of many grand openings of new Loblaws supermarkets. In 1959, the company

entered the trading stamp wars with its own Lucky Green Stamps. Loblaw president George Metcalf brought store managers together for an early morning meeting in Toronto to make the surprise announcement, informing them that the

declined. An era of aggressive expansion had paid off in terms of revenue growth but apparently at the expense of profitability. As shareholders complained about a lack of information from the company, frustrated analysts, unsure as to the corporate structure or holdings, became increasingly reluctant to recommend the stock. Loblaw annual meetings were better known for their distribution of cookies, cake and groceries than information on operating performance. While George Metcalf remained head of Loblaw Companies Limited, chairman W. Garfield Weston began making changes to senior executive ranks, including the appointment of Leon Weinstein, former head and son of the founders of Power Supermarkets, as president of Loblaw Groceterias Co. Limited from 1968 to 1970. Weinstein soon indicated his intent to "stop giving away baskets of groceries at annual shareholder meetings and try to raise dividends." To find out what Loblaws shoppers thought about the chain, Weinstein introduced a questionnaire on his personal letterhead, "asking customers to check-off their complaints," and received 65,000 replies, or three times the number expected.In spite of attempts to get a handle on operational issues, Loblaws was still perceived as an "ailing supermarket chain." Meanwhile, pre-tax profits for Loblaw Companies Limited

Between 1968 and 1974, Loblaw sold $164 million in holdings to corporate parent George Weston Limited in an apparent extension of "financial assistance."

Yet Loblaw continued to make acquisitions. In 1969, it bought a controlling interest in Sayvette, a money-losing Toronto-based discount department store chain and went on to spend $8.7 million to acquire 100 percent ownership. But as competition heated up, losses mounted and stores were closed. The last Sayvette shut its doors in late 1977.

debt with millions of dollars of financial obligations coming due over the next few years. At the same time, its stores were badly in need of refurbishing and sales were

in virtual free fall. Within a year, the company’s share of the crucial Ontario market had been

major chains. South of the border, things looked somewhat better but only on the surface, with

and the opening of new ones," in addition to a dividend policy that could not be

take a close look at the chain to see if it could be saved. In February 1972, Galen

a 100 store chain, we looked very good indeed." In addition to dozens of store

innovative product packaging and use of photography, Watt proposed a complete makeover of Loblaw's corporate image and retail space. Although Watt had little

such trouble that if it doesn’t work, it doesn’t matter. If it works - good."

doubled the floor space of the produce department and moved it from the back of the store

convey quality and freshness. Wood panelling covered over old walls and broken mirrors to give the interior a fresh, contemporary feel. Within the first few months of the remodelling,

share in Ontario, it began bleeding red ink when it came to its U.S. operations

and in particular its National supermarket chain. The company initiated a similar program of rationalization and renewal which saw hundreds of

In 1976, Loblaw suspended the dividend on both its Class A and B shares as

and various businesses, Loblaw Companies Limited, as well as George Weston Limited, had returned to profitability. One Canadian business magazine described what W. Galen Weston and team had pulled off as a classic turnaround

By 2019, the company's strategy to increase on-line sales of groceries was well established. In spite of the limited sales in this category, about 10% of the market for all retailers, the company continued to move forward with the concept. "I see online being more relevant and more important to customers going forward. That’s why we’re focused on it", said Greg Ramier president of the market division at Loblaw Cos., in an interview by the Toronto Star.

packaging only for the consumer to discover that the product inside, that had disappointed in the first place, was no better than before. Then, in 1978, the company joined the generics movement with the introduction of 16 "No Name" items, marketed in simple black and yellow packaging. The new line was heavily promoted with advertised savings of between

Since Loblaws introduced its 16 no-name products, it has sold one million units with many repeat purchases. "The suppliers of a number of these products can't keep up with the demand. In several cases, we've sold in two and a half weeks what we originally estimated would be our annual requirements.

When one competing food industry executive was critical of Nichol, noting the irony of heavily advertising No Name when generics typically went unadvertised to hold down costs, Nichol pointed out that Loblaw had not increased its promotional budget but simply redirected its advertising dollars towards the new line. A year later, the number of No

Name products had increased to a hundred different items and represented five percent of Loblaws sales.Within months of the No Name launch, Loblaw opened a prototype No Frills store in East York. Also known as a 'box store,' since items were not individually shelved but left in their cardboard shipping cartons, usually with the front cut away, the new store advertised "the lowest overall prices in Toronto." Though customers had to pack their own groceries, bring their own bags or pay 3

refrigeration units had been removed to cut costs. In spite of the limited selection and minimal service, the first No Frills store proved a success and within months the company converted two more Loblaws locations to the new deep discount format.

While the original No Name line-up was promoted as basic, everyday items at considerable savings, Dave Nichol eventually began experimenting with the product line-up by adding more upscale items. Products such as Gourmet Barbecue Sauce, Escargot and imported jams began appearing in the familiar yellow and black generic packaging. When President’s Blend Gourmet Coffee was launched in time for Christmas 1983, it was soon outselling every other grocery item on Loblaws shelves. Nichol concluded that consumers wanted to go up-market and the decision was made to develop an entire line of upscale products under its own private label brand.Modelled on the Marks & Spencer St. Michael in-house brand, and touted as being equal to or better in quality than competing national brands at less money, President’s Choice was personally endorsed by Nichol as president of Loblaw Supermarkets.

The introduction of the premium line also coincided with the advent of an advertising flyer entitled "Dave Nichol’s Insider’s Report." Based on a California supermarket flyer called "Trader Joe’s Insider’s Report," and referred to as "a mix of Mad magazine and Consumer Reports, zaniness and food tips, wrapped up in a comic book format," the insert proved popular with Ontario households. The flyer also became an important advertising vehicle for President’s Choice, which it came to exclusively promote. One of Nichol's early product development successes was President’s Choice The Decadent Chocolate Chip Cookie, which took over a year to develop. Nichol and

his team insisted on the use of real butter and twice as much chocolate per cookie as the leading national brand. Although The Decadent was sold in only 17 percent of Canadian supermarkets, compared to 98 percent for Nabisco's Chips Ahoy!, "it fast became Canada's best selling cookie."

four times the size of a conventional supermarket with about a third of the space

banners and leasing out the redundant space to other retailers. "Had Loblaw Companies not owned the real estate, the

supermarket retailer. Much of that success could be attributed to the effectiveness of the company's "control label" or private label program. In the case of President's Choice, a key management strategy had been to create a line of unique products at competitive prices, available nowhere else but Loblaw stores.

The company also began extending the brand's market beyond Canada, making international inroads and in particular into the highly competitive American market. By the early 1990s, not only were PC products increasingly available at select U.S. regional supermarket chains, Loblaw was supplying retail giant Wal-Mart, marketing President's Choice products under the brand Sam's American Choice, later shortened to Sam's Choice, named after company founder Sam Walton. All indications were that Loblaw's control label program was starting to pay off south of the border:

President's Choice, the upscale private label at Loblaw's supermarkets, has been a resounding success in the United States - and has fired a rebellion of consumers and retailers against highly advertised, and therefore pricey, national brands. Its products have found their way into more than 1,200 stores in 34 states. The biggest deal is with Wal-Mart, which had $73 billion in sales in 1993. Dave Nichol, the man behind President's Choice, reports that Wal-Mart's volume on Sam's American Choice and Great Value lines, also developed by Loblaw's, was up 300 percent last year.

Meantime, though, Wal-Mart had announced what media reports likened to an "invasion of Canada," namely the acquisition of 120 Woolco stores across the country. Though Wal-mart was barred from selling the private-label line developed by Loblaw in Canada, the two retailers eventually parted company as they increasingly became competitors in the Canadian marketplace.

In November 1993, it was announced that Dave Nichol, who for the past decade had been so closely associated with President's Choice in terms of promotion and product development, was leaving his senior executive post to become a private label consultant. Initially, both he and Loblaw expressed the desire to continue working together, with Nichol remaining on in the role of PC spokesman. But as Nichol moved forward with plans to develop his own Dave Nichol brand of private label products with Cott Corporation of Toronto, presumably in competition with President's Choice, the relationship deteriorated. Nichol hosted a couple more issues of Dave Nichol's Insider's Report but then vanished from the cover. The November 1994 edition dropped his name to become simply The Insider's Report. While media coverage of the Nichol/Loblaw split had been extensive, it seemingly had little or no negative impact on brand equity. News reports later indicated that Loblaw, post-Nichol,was experiencing stronger-than-ever corporate earnings.As Loblaw expanded operations in Canada under an array of

regional and market segment store banners, by the mid 1990s it divested the last of its retail holdings south of the border with the sale of National supermarkets in St. Louis

Atlantic Canada. While other food chains, such as the Oshawa Group, struggled to turn a profit, Loblaw kept adding more stores and more square footage through acquisition and new construction:

Loblaw president Richard Currie laughs at the notion that Canada has too many grocery stores. There's a lot of floor space, he allows, but never enough in the large, modern, well-equipped, one-stop shopping supermarkets that some Canadians like. Loblaw keeps expanding its fleet of 900 stores, adding about 10 percent to its floor space and sales each year, while increasing its profit margin.

1998 also saw Loblaw become the first Canadian food retailer to extend its product mix into the realm of banking with the launch of President's Choice Financial. Promoted as a very basic no-hassle, no-fee form of personal banking, conveniently located where you do your grocery shopping, PC Financial kiosks and automatic tellers began springing-up in supermarkets across the country. While Loblaw provided the branding, the service-end was made possible through a partnership with the Canadian Imperial Bank of Commerce. Loblaw also promised a new loyalty program that would allow customers to redeem 'points' for free groceries - which later became "PC Points." Within a year, Loblaw would have more than a hundred President's Choice Financial kiosks and bank machines.

After almost 25 years at the helm of Loblaw Companies Limited, Richard J. Currie retired as company president in November 2000. John Lederer, a veteran Loblaw executive, took over the top job. As president, Lederer moved forward with a number of strategic initiatives. Administrative functions were consolidated as a new corporate headquarters was unveiled in Brampton, Ontario. Warehouse operations were streamlined with the opening of new distribution centres as the company updated facilities and information technology. And, once again, Loblaw made an effort to offer more general merchandise in its stores in the hope of becoming more of a 'one-stop' shopping destination for consumers – all moves presumably designed to combat the threat posed by a "looming Wal-Mart

But as supply chain problems took root, customers began to complain of empty Loblaw shelves and out-of-stock items, while suppliers expressed their frustration coordinating deliveries to distribution centres. Unsold general merchandise began piling up in warehouses. Meantime, key staff, such as company buyers, had quit rather than relocate to the new corporate headquarters. Loblaw began losing money, quarter after quarter, and by the end of

Galen Weston stepped down as chairman of the board. Weston's son, Galen G. Weston, was appointed executive chairman, while former Canadian Tire retail head Mark Foote became president and Allan Leighton, a prominent UK executive and longtime advisor to the senior Weston, took on the job of deputy chairman. Dalton Philips was later named Loblaw's chief operating officer. Reaction to the management shakeup was mixed, with Richard Currie critical of the move, saying it was unnecessary, while Dave Nichol expressed his personal frustration that it took five quarters of declining earnings before action was finally taken.With the new management team in place, Loblaw completed a 100-day consultation in which senior executives met with store managers and employees to hear their concerns and complaints. Weston subsequently introduced a "simplify, innovate and grow" strategy designed to "fix the basics" by refocusing the company’s attention on food retailing. He also publicly declared that it would take at least three years to turn operations around as the company continued to work out kinks in its supply chain and upgrade computer systems.

Since the departure of Dave Nichol a decade and a half before, Loblaw had been without a spokesman to pitch its brands and supermarkets. In 2007, in a major shift on the promotional side, executive chairman Galen Weston became the new public face of the company and in particular, its in-store private label products. With the 2008 financial crisis and recession, Loblaw began to heavily promote not only President’s Choice but also its generic No Name products as an economical alternative to higher-priced national brands. In a television commercial reminiscent of Nichol from the 1980s, Weston presented two shopping carts, one filled with No Name items and the other with comparable national brands to show how consumers might save on their grocery bills.

But while the company continued to struggle with supply chain issues and its partial retreat from general merchandise, one initiative in particular, in the non-food category, was showing considerable promise. In 2006, Loblaw and Canadian fashion designer Joe Mimran teamed up to launch Joe Fresh.

Promoted as chic but highly affordable clothing, the new line sold in supermarket and superstore aisles. Joe Fresh sales soon exceeded the company's own projections and Loblaw began expanding into children's wear, shoes, lingerie, beauty and bath products. In 2010, the first standalone store opened in Vancouver and Loblaw announced plans for 20 outlets across Canada. More recently, Loblaw unveiled a number of Joe Fresh permanent and pop-up stores in New York City and surrounding region in what one Loblaw executive described as "very much a pilot project." But Mimran, the former co-founder of Club Monaco, spoke less cautiously, envisioning 800 Joe Fresh stores across the United States within five years, with Asia and Europe the next logical international markets to take the brand.

social responsibility, and in particularly on the environment, in issuing annual CSR reports. A line of more environmentally friendly GREEN products was launched . Weston appeared in TV commercials to promote "Canada’s greenest shopping bag," a reusable grocery

the number of disposable bags that ended up in landfill sites by a billion a year.

In November 2008, Greenpeace alleged that Loblaw was selling 14 out of 15 fish species on that organization's "redlist" of those considered to be the most destructively farmed, and staged protests at some Toronto-area locations. The company denied the allegations, while the accuracy of the redlist itself has been challenged by U.S. government regulators and by the fish industry. 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. Greenpeace's ratings of Loblaw's seafood initiatives have improved over the years and are now above all other national retailers , 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.

In July 2009, Loblaw extended its presence in the ethnic retail market with its announced purchase of T & T Supermarket Inc., Canada's largest chain of Asian food stores, for some $225 million - $191 million in cash and the rest in preferred shares. Founded in 1993, the 17 store chain, with outlets in British Columbia, Alberta and Ontario, recorded more than half a billion dollars in annual sales. T&T CEO Cindy Lee noted that some of the supermarket's customers already referred to it as the Asian Loblaws.Loblaw rented a Toronto avant garde art gallery as backdrop to the launch of its new "Black Label" line of gourmet food products. The luxury grocery items, marketed under the President's Choice brand, were showcased via a celebrity chef by-invitation-only dinner party. Promoted as "affordable indulgences," the products range in price from $1.99 to $24.99. "From the smoky bacon marmalade, to the crumbly eight year old cheddar, to the cherry shiraz fruit jelly," the eclectic line-up is designed to compete with specialty stores. Though dubbed "PC Black Label," the brand name doesn't actually appear on any of the items, with its largely black and white packaging and photography the primary clue to the product line's identity:

"It goes back to our first successful controlled brand product in a yellow and black package with No Name on it. It wasn’t until six years later that we actually put "No Name" on the packaging," Ian Gordon, vice president at Loblaw Brands Limited, explained.

Loblaw has published its own book of recipes. "The Epicurean's Companion" lists an eclectic assortment of dishes prepared using Black Label products including Cheddar Bacon Marmalade Toast and Porcini Glazed Mushrooms with Pancetta.

In 2004, Loblaw Companies purchased Maple Leaf Gardens, a former hockey arena in Toronto. In 2009, the company announced a $60 million project, in which it would partner with Ryerson University to construct a flagship Loblaws store at its ground level, as well as a multi-purpose athletics complex for Ryerson in its upper levels, featuring volleyball and basketball courts, and a full-sized hockey rink. These plans had been delayed due to financial concerns, criticism over the purchase by residents, and conditions imposed by MLSE forbidding the purchaser from unduly using the building as a competing sports venue.The location, Loblaws at Maple Leaf Gardens, opened on November 30, 2011; the 85,000 square-foot store features many historical and architectural features of the old Gardens, including the spot where centre ice once stood. It also features artwork honouring notable events and concerts held at the arena, including murals and a blue maple leaf sculpture constructed from its seating. The store also includes an LCBO location, and a Joe Fresh store. Loblaw executive chairman Galen Weston explained that the store was designed to " the urban supermarket".

In December 2012, Loblaw announced that it would spin-off most of its real estate properties into a new publicly listed real estate investment trust. The move would allow Loblaw to monetize the value of its real estate holdings, invest in its grocery business, and take advantage of the tax advantages of the REIT structure. Loblaw shares increased 24% on the news. On July 5, 2013, the new REIT, Choice Properties REIT, held a $400 million IPO.Loblaw retained majority ownership in the new company.

In February 2018, Choice announced that it would acquire Canadian Real Estate Investment Trust , a diversified commercial REIT, for $3.9-billion.

On July 15, 2013, Loblaw announced that it would acquire Canada's largest pharmacy chain, Shoppers Drug Mart , for CA$12.4 billion in a cash and stock deal. Galen G. Weston indicated the possibility for store brands from the two chains to appear in each other's stores following the merger, and that the merger would give Loblaw greater buying power for health and wellness products. The merger received approval by both shareholders and the Competition Bureau, allowing Loblaw to close the deal on March 28, 2014. Shoppers Drug Mart and its administration will continue to work as a separate operating division of Loblaw Companies Limited.Following the purchase, the Shoppers Drug Mart loyalty program Optimum was merged with Loblaw's PC Plus program to form PC Optimum.

Our priorities include giving back to the communities in which we operate, sourcing with integrity and caring for the environment.

Loblaw's purpose – Live Life Well – supports the needs and well-being of Canadians who make one billion visits each year to the company’s stores.