Loblaw to close 52 stores
Loblaw Companies Ltd. (TSX:L) has put its neighbourhood drug stores and supermarkets under a microscope as it responds to increasing competition and will shutter 52 locations in the coming year after concluding they fell short of expectations.
The company said in its second-quarter earnings report on Thursday that the closures will save $35 million to $40 million in annual operating income, despite the loss of $300 million in sales.
Loblaw president and executive chairman Galen Weston Jr. said that the company is focused on finding efficiencies as growth slows.
In a normal year, he added, the company would close 10 to 15 stores.
“Yes, it's an increase, but it's not radically different,” he said in a conference call with analysts and investors. “It doesn't signal any kind of change from a strategic perspective.”
The closures will be distributed across the country and include previously announced closures of Joe Fresh operations in the U.S., though they would not make a “material change” to the clothing line's Canadian locations, he said.
In its latest annual report, the company had more than 2,300 locations for its many brands including Loblaws, Shoppers Drug Mart, No Frills and Joe Fresh.