Galen Weston is stepping down from running the day-to-day operations of George Weston Limited and Loblaw Companies Limited.
Weston will remain Chair of the Loblaw Board of Directors, as well as Chair of the Board of Directors and Chief Executive Officer of parent company, George Weston Limited – where he will play an active role setting the strategy for the group, it was announced Tuesday in a news release.
Per Bank will become President and Chief Executive Officer of Loblaw by Q1 2024. The appointment follows a global talent search initiated in August 2022 in anticipation of Robert Sawyer’s planned retirement as Loblaw’s Chief Operating Officer at the end of 2023, said the company.
“I was not surprised by this change. Galen Weston faced an incredible amount of backlash on social media and in other media and became the poster boy for high grocery prices and for the oligopoly industry structure that is frequent in Canada,” said retail analyst and author Bruce Winder.
“I think his recent compensation increase at a time of economic stresses on many Canadians left people feeling negative toward Mr. Weston and he became a symbol for the differences between the haves and have nots in this country. As Galen has been the face of the Loblaw brand over the last several years it made sense to distance himself somewhat from the grocer so as to reshape perceptions of Loblaw as a more accessible brand in Canada”
With more than 2,400 corporate, franchised and Associate-owned locations, Loblaw, its franchisees and Associate-owners employ more than 221,000 full- and part-time employees, making it one of Canada’s largest private sector employers. Its brands include President’s Choice, T&T, No Name, Loblaws, Real Canadian Superstore, No Frills, Fortinos, Provigo and Shoppers Drug Mart.
Weston has come under heavy criticism recently including by federal NDP leader Jagmeet Singh who criticized the grocery executive for high profits during a Parliamentary committee.
Sylvain Charlebois, Senior Director, Agri-Foods Analytics Lab, Dalhousie University and a Professor in food distribution and policy in the Faculties of Management and Agriculture, said the decision for Weston to step aside from the day-to-day operations is a good decision.
“It’s good to pause and allow someone else to run the day-to-day shop for a while. The scapegoating just became a distraction really. I think it’s going to calm things down a little bit,” said Charlebois. “So I think it was actually a good move and I think it should have happened a long time ago but now is the right time. It’s going to happen early 2024 not now but still knowing that he will be leaving for a while is something that probably makes him less of a target and making him a target was truly unfair I thought.
“First of all, I thought his company was and is well managed. He hasn’t really done anything wrong in recent years at least. Loblaw is a well-run company and he’s not necessarily responsible for higher food prices. I mean, we are looking at a global phenomena. I was hoping that people would have appreciated that but most people don’t just look at financial statements. They don’t look at the data. So they’re often quick at blaming just one person they actually see every single day on television.”
Charlebois said Weston made himself a target and stepping back is the right thing to do.
“Separating the CEO from the board is a good governance move. As for the issues related to Galen Weston’s compensation and the profits that Loblaw has been making, I do not believe current events have driven this change,” said George Minakakis, a retail expert/analyst and CEO of Inception Retail Group.
“Politics and business are two different spirit animals with the same objective: to justify their existence to the public. It is good for the corporation to remove the Weston name from the operations role. Canada is not a large country, and the Westons are well known; less visibility is also good for their brand.
“Arm’s length is the right decision. However, Weston remains the chair of the board. Hopefully, there is an opportunity for him to see the humans that struggle daily and not just the consumer from his adjusted new role. Bringing in an outsider with experience running grocery chains and working with families with controlling interests is good to ease the transition.
Galen Weston is the face of Grocery in Canada. Thanks to their marketing and his high profile. Now they have to work on rebuilding relationships with consumers. In fact, all grocers do.”
Bank will be responsible for Loblaw’s day-to-day operations, and he will report to Loblaw’s Board of Directors. Richard Dufresne will continue as Loblaw’s Chief Financial Officer and President and Chief Financial Officer of George Weston Limited. Robert Sawyer will remain as Chief Operating Officer until the end of the year.
In a news release, the company said Bank is a 30-year career retailer with deep expertise in retail operations and supply chain. He is the outgoing Chief Executive Officer of Salling Group A/S, the largest retailer in Denmark, with 1,700 multi-banner supermarkets across three countries, supported by strong e-commerce, loyalty, and private-brand programs, and having one of Denmark’s largest private-sector workforces.
“Over the past two years, we have strengthened the foundations of the company. Our management team is exceptional, and our 220,000 colleagues continue to deliver for our customers every day,” said Galen G. Weston. “In Per we have found a world-class retail executive to help us build from that position of leadership and strength, and to continue on that journey.”
Recently Loblaw Companies Limited announced it plans to invest more than $2 billion dollars into the Canadian economy in 2023. The company’s capital investments this year are expected to create thousands of jobs and see it grow and improve its store network, opening 38 new and/or relocated stores and converting or renovating nearly 600 others, it said.
Over the past five years, Loblaw’s capital investments have evolved with the grocery landscape, driven by digital innovation and technology. This year, it will increase its investment level focusing on its core retail experience, expanding its presence in communities, modernizing its supply chain, and making food and healthcare more accessible, said the company.
“For decades, Loblaw has made significant investments in the Canadian economy – creating jobs and opportunities in our company and others,” said Weston, at the time of the announcement. “By growing and innovating, we are advancing the priorities that matter to customers: outstanding shopping experiences, affordable options, and support for their health and wellness. This investment lives up to our purpose of helping Canadians live life well.”
The company said its network of corporate and independent operations already employs approximately 220,000 Canadians – the nation’s largest private workforce. The company’s increased investments are expected to create more than 6,000 new jobs, in retail, supply chain, technology, and construction.
Highlights of Loblaw’s capital investments in 2023 include new discount-format supermarkets in underserved communities, an increase in pharmacist-led health clinics, hundreds of carbon reduction initiatives across its business, and continued development of a modern distribution centre in the Greater Toronto Area, it said.
In 2022, Loblaw had annual revenue of $56.5 billion which was up $3.3 billion from the previous year for a 6.3 per cent increase.
Net earnings available to common shareholders was $1.9 billion, up $46 million and 2.5 per cent from the previous year.