Loblaw closing 22 unprofitable stores, launching home delivery in Toronto, Vancouver

Loblaw closing 22 unprofitable stores, launching home delivery in Toronto, Vancouver
Canadian Press
November 15, 2017
November 15, 2017 10:30 AM EST
Loblaw Companies Ltd. announced Wednesday, Nov. 15, 2017 it is planning to close 22 unprofitable stores. (Ryan Remiorz/The Canadian Press/Files)
BRAMPTON, Ont. — Loblaw Companies Ltd. says it has finalized a plan that will result in the closure of 22 unprofitable stores across a range of its banners and formats.
The decision comes as the retailer plans to bring home delivery services to two of the country’s biggest cities in the next several months.
Loblaw is partnering with California-based Instacart to deliver food and other pantry staples from Loblaws, Real Canadian Superstore, and T&T locations to customers in Toronto starting Dec. 6 and Vancouver starting in January.
“We are a customer-led company adding new ways to make shopping easier,” said Galen G. Weston, Loblaw CEO, in a statement.
Both moves come as retailers face increasing pressure on several fronts, including discount retailers such as Walmart, online retailers such as Amazon and pending minimum wage increases in some provinces.
Amazon’s recent acquisition of Whole Foods, including its 13 Canadian locations, increased speculation that Canada’s grocers would have to step up on home delivery offerings.
The announcement came Wednesday as Loblaw reported that it more than doubled its third-quarter profit compared with a year ago as its results were boosted by the sale of its gas bar business.
The retailer said its profit attributable to common shareholders totalled $883 million or $2.24 per diluted share for the 16 weeks ended Oct. 7. That compared with a profit of $419 million or $1.03 per diluted share for the same period last year.
Revenue totalled $14.19 billion, up from $14.14 in the third quarter of 2016.
The results included a $432-million gain on the sale of the company’s gas station business to Brookfield Business Partners. Excluding the deal and other one-time item, Loblaw says it earned an adjusted profit attributable to common shareholders of $549 million or $1.39 per share for the quarter, up from $512 million or $1.26 per share a year ago.
The store closures, which are expected to be mostly complete by the end of the first quarter next year, follow an announcement last month that Loblaw would cut 500 corporate and store-support jobs.
The company expects to record $155 million in charges, the majority of which are expected in the fourth quarter, and to realize approximately $85 million in annualized savings.
To date, Canadians have few options for grocery deliveries with companies like Grocery Gateway and select large chains offering the service in limited locations.
Walmart announced in March it would start delivering groceries to customers living in certain parts of Toronto and the surrounding area. Shoppers must purchase at least $50 worth of food before taxes and pay a $9.97 fee.
Most grocers, including Loblaw and Walmart, have opted to focus on in-store pick-up for online orders instead. Loblaw launched its click-and-collect offering in 2014 and it’s now available at nearly 200 locations.
Loblaw closing 22 unprofitable stores, launching home delivery in Toronto, Vancouver | Toronto Sun
Beginning of the end for Loblaws.
The marketplace is changing. I think Loblaws has the right idea. You have to evolve and do what the consumer wants.

Walmart is doing a similar thing. You can grocery shop online at Walmart (select stores only right now). Even though it's not available where I live, I tried it out. I got $50 worth of food - the minimum for this service - this includes anything you can get at the grocery store. It won't be long until it's everywhere though. Shop. Pay. Pick up.

If you're going to visit friends or relatives, and they live where this service is available, you can order groceries and pick them up just prior to arrival. Or you can send food to friends or relatives and have them pick it up. A nice Christmas present. Unique for this year anyway.

That might be the job for Cliffy. He can earn money and get exercise walking the aisles. Walmart employees shop for customers. You tell them when you'll be picking it up, and your order will be ready when you arrive at the store.

I believe this is where Sears made their fatal mistake. Unlike similar businesses, Sears continued doing things the old fashioned way and they are now paying the price for not keeping up with the times. Their web site was a mess too.

Canadian Tire is heading down the same road. They'd better smarten up or they will be closing their doors as well. Their website is clunky - difficult to maneuver. While they have a rudimentary "pay and pick up" thing in place, it isn't very good. Wait times are too long. I've ordered several things for pick up. Average wait is two weeks.

For example, I ordered an item on the 4 Nov. They will send an email when it's ready to pick up. I haven't got a notice yet. It's been 12 days. Had I ordered the same item from Amazon, it would be in my hands already.
Home delivery was a staple of the business back in the old days before they decided to try to get everyone into the store for merchandising reasons. The store I worked at even used to build orders that were then put on a boat and trucked up to cottage country on the lakes. A HUGE business sideline.

That old store is still there and the owner owns half the whole town at this point.

I guess that's the end
Quote: Originally Posted by Angstrom View Post

Beginning of the end for Loblaws.

They just had a very profitable quarter.
And they're opening new stores as well, just closing unprofitable ones.
Curious Cdn
Quote: Originally Posted by Walter View Post

They just had a very profitable quarter.

They had a very profitable quarter because they sold off one of their operations. The food store operation is probably running at a list.
Hell, we've been using home delivery for groceries for years now. And with the $10 delivery charge it's still cheaper than cabbing it to and from the grocery store.
Hoof Hearted
Part of the problem?

Loblaws built these giant stores the length of football fields. A little old lady like my Mom who just needs milk and bread would say forget it, I ain't walking 2 miles just for that, and go somewhere else...and the seniors got lotsa money.

The product line is great, but overpriced I find. We shop at Walmart for staple items...paper towels, toothpaste,...etc...and get our meats at M&M's or Price Club.
bill barilko
Quote: Originally Posted by Jinentonix View Post

....the $10 delivery charge it's still cheaper than cabbing it to and from the grocery store.

I thought only poor people took cabs to shop-what's wrong with driving yourself?
Quote: Originally Posted by bill barilko View Post

I thought only poor people took cabs to shop-what's wrong with driving yourself?

If you don't have a drivers licence, then driving yourself is probably not a good idea.

But hey, I'll tell my 85 year old mother in law that you think she should be driving around town.
Do they still have OK Economy?
No the Ok is at the Circle K, where the old ladies buy milk.
What happened to Cow Palace?