Loblaw Companies Limited, Canada’s food and pharmacy retail leader, announced Tuesday it expects to invest more than $2 billion into the Canadian economy in 2024.
That includes the creation of more than 7,500 jobs, more than 40 new stores, expansion or relocation of another 10 and renovation of more than 700 others.
“This year, we are investing where Canadians need it most. We will introduce more than 40 new discount stores and 140 new pharmacy care clinics in communities across the country – making healthcare and affordable food more accessible to more people,” said Per Bank, President and CEO, Loblaw Companies Limited, in a statement. “These investments in Canada are a catalyst for job growth and the creation of countless opportunities, in our stores, in our company and with the many partners who work with us.”
The company said this year’s investment is in addition to more than $10 billion the company has invested since 2016.
In an email response to questions, the company said: “This is our 2024 Capex plan and we’re investing where Canadians need it most. This announcement demonstrates our commitment to helping Canadians live life well by improving our store network, creating jobs, and increasing accessibility to affordable food and healthcare services nationwide.
“We’re opening both grocery and pharmacy stores across the country, but at this point aren’t breaking down locations. We are happy to provide more details as the stores open.”
Loblaw Companies Limited is Canada’s food and pharmacy leader, as well as its largest retailer and private sector employer. With approximately two billion transactions each year in its network of 2,500 stores and national e-commerce options, Loblaw brings food, pharmacy, beauty, apparel and financial services to customers through many brands: President’s Choice, No Name, Loblaws, Shoppers Drug Mart, No Frills, Real Canadian Superstore, T&T, Joe Fresh, PC Express and PC Financial. The company’s loyalty program, PC Optimum, has more than 18 million members.
“That Loblaw is growing comes as no surprise, given their profitability. What is interesting however is how Loblaw is using this announcement to frame themselves as a champion of the Canadian economy. Clearly part of a broader charm offensive on Loblaw’s part, aimed at countering what has been several years of scathingly negative media and public sentiment over the company’s behaviour. Perceived price gouging, shrink-flation, and heavy-handed vendor relations have all taken a toll on the brand’s image,” said Doug Stephens, Founder of Retail Prophet.
George Minakakis, CEO of Inception Retail Group, said Loblaw has garnered negative publicity over the last two years.
“There is no question the company is a significant contributor to the retail, grocery sectors and the overall economy. How do you prove your commitment to consumers and a nation struggling with inflation and difficult financial hardships? Announcing store growth, redevelopment plans means more work is being created. The 7,500 new jobs is a good news story for the nation,” he said.
“They mention healthcare and food affordability, unless the global economy settles down affordability will remain a challenge. On the other hand the news from Walmart says that consumers are putting less in their carts and shopping more frequently. Canadian Tire had a very challenging fourth quarter which speaks to consumers looking after their households first. Loblaw will have to change consumer perceptions and prove that they are that trusted source of affordability. This is a significant opportunity for them that should not be misplaced.”
Bruce Winder, President of Bruce Winder Retail, said this is good news for Canada’s economy.
“It is nice to see Loblaw investing capital back into Canada which will create jobs and invest in communities. I also think that focusing on the discount segment will offer Canadians greater reach of value priced product in this tough economy. Hopefully we see other companies doing the same. Hats off to Loblaw,” he said.
Michael Kehoe, Broker/Owner of Fairfield Commercial Real Estate, said the Loblaw food and pharmacy juggernaut with over two billion transactions each year and a network of 2,500 stores is a critical part of Canada’s retail infrastructure.
“The announcement of a $2 billion investment in the firm’s store network is a significant event on the national retail and consumer real estate scene. The anticipated employment spinoffs and construction activity building new stores and pharmacy care clinics, store renovations, expansions and relocations will have a positive impact on the Canadian economy in the years ahead. I found it interesting that 40 new discount stores are in the mix recognizing the significance of the value end of the grocery retailing spectrum,” he said.
“This is great news for Canada and the workforce but this doesn’t solve for what customers need most. Better pricing on grocery and essentials. Canadian customers don’t want the same four grocery stores to continue to monopolize the market – they need more choices and better prices,” added Liza Amlani, Principal and Founder of the Retail Strategy Group.
David Ian Gray, Founder and Strategist of DIG360 Consulting, said Loblaw is in a fantastic fiscal position, perfectly suited to make these expansion moves to try to further boost market share.
“The news is how it is packaged; it is notable this is not positioned as an investment in Loblaw, but an investment in Canada. Why? To attempt to blunt the mounting pressure from politicians and the public image that their strong finances are creating for budget crunched shoppers. I doubt it will change public and lawmaker perception, one way or another. However, this does signal a strong move and I will await response from Empire, Metro and Walmart Canada.”
Again? They already announced this. Is this actually new $$ or just an attempt to distract from a grocery oligopoly shaking Canadians down while they just get richer and richer?
You guys know where that 2 billion is going to come from right? They are putting the money where Canadians need it most? Really…. Can I get a 30% markup on my produce so you can build a bunch more stores that aren’t going to cost me more at the till….can I get a side of everything else costing double please.? Thanks.
Since the profits have vastly increased and they have money to spend could they repay the hard earned taxpayers money given to replace freezer units even though they were making good profits then