Loblaw ex­pects food busi­ness to grow de­spite de­cline in prices

The Hamilton Spectator - - BUSINESS - ALEK­SAN­DRA SAGAN

TORONTO — Canada’s largest gro­cery busi­ness de­liv­ered stronger than ex­pected re­sults in the fi­nal quar­ter of last year and an­tic­i­pates its food busi­ness will grow de­spite a de­cline in prices.

Loblaw Com­pa­nies Ltd. re­ported a $201mil­lion net profit or 50 cents per com­mon share in its fourth quar­ter of 2016 — up 57 per cent from the year be­fore — partly due to op­er­a­tional im­prove­ments and spe­cial items in both years. The com­pany low­ered prices dur­ing the quar­ter, mostly for pro­duce, meat and baked goods, Galen G. We­ston, chair and CEO, said dur­ing a con­fer­ence call.

“Cus­tomers are re­spond­ing to those lower prices,” he said, adding it’s pre­ma­ture to say whether that trend will con­tinue.

The Bramp­ton-based com­pany will con­tinue ex­pand­ing its Click & Col­lect pro­gram, which is at 100 lo­ca­tions and al­lows cus­tomers to or­der gro­ceries on­line and pick them up at the store. He also said home de­liv­ery is a pos­si­bil­ity in the fu­ture.

There are few op­tions for gro­cery home de­liv­ery in Canada. Some com­pa­nies, like Gro­cery Gate­way, which part­ners with Longo’s in the Toronto area, de­liver boxes of gro­ceries to the doorsteps of cus­tomers. IGA, Thrifty Foods and Costco also of­fer some de­liv­ery ser­vices.

But it’s not a move shop­pers should ex­pect soon, We­ston said, adding that Loblaw cus­tomers ap­pear to pre­fer pick­ing up gro­ceries on their sched­ule in­stead of wait­ing at home at a des­ig­nated de­liv­ery time.

Rev­enue for the quar­ter was $11.13 bil­lion, up $265 mil­lion.

On an ad­justed ba­sis, Loblaw earned 97 cents per share in quar­ter, up from 87 cents per share in the fourth quar­ter of 2015.

Loblaw’s rev­enue was above an­a­lyst es­ti­mates of $10.98 bil­lion and ad­justed earn­ings were in line with es­ti­mates com­piled by Thom­son Reuters.

In the fourth quar­ter of 2015, Loblaw had $10.87 bil­lion of rev­enue and $128 mil­lion of net profit, or 31 cents per share.

The food re­tail seg­ment, ex­clud­ing rev­enue from ga­so­line sales, saw same-store sales at Loblaw rise 1.1 per cent and same-store sales at Shop­pers up 3.4 per cent — re­flect­ing sales growth at lo­ca­tions open at least a year.

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