A Look at Loblaws Companies

Topics: Supermarket, Loblaw Companies, Balance sheet Pages: 10 (3475 words) Published: March 29, 2011
In 1919 the first Loblaw grocery store opened in Toronto. Theodore Pringle Loblaw and J. Milton Cork had a new idea of a grocery store, one which would be fully self- serve and would offer better quality foods at lower prices. In 1978, ‘No Name’ products were introduced into Loblaw stores. These products had distinct yellow packaging, and Loblaw stores experienced an outstanding customer feedback. In 1984, ‘President’s Choice’, one of Loblaw’s own brands made its first debut in stores. Consumer feedback and satisfaction for President’s Choice products was superb and “everything from toasters to train sets” were made. Loblaw Companies has now grown to over seventy locations in Ontario alone. (Loblaw Website, Main Page)

The years 2005 to 2008 were very important for Loblaw, the company underwent expansion to ultimately ensure their mission to be “Canada’s best food, (Loblaw: First Store)
health and home retailer by exceeding customer expectations through innovative products at great prices.” These expansions are still taking place today.
“In 2005, Loblaw Companies Limited moved closer to completing one of the largest transformations in its history. [They] were challenged by the size and impact of the short term costs associated with executing certain elements of the transformation.” Working facilities merged, and there were major store renovations. A new head office and Store Support Centre was established in Brampton, Ontario; which now employs 2,000 Ontarians. However, these expansions caused some setbacks. Loblaw made changes to their national systems platform and supply chain. This change disrupted the flow of its inventory and had an overall negative effect on the sales and earnings for 2005. This simplified their distribution network which made the movement of inventory much less time consuming and lead to lower costs. A capital investment program exceeding $1 billion was used to continue the expansion of “The Real Canadian Superstore” in Ontario. This money was also used to convert specific conventional stores into much larger superstores, strategically choosing the stores that reflected a growing market. A new general merchandise warehouse and distribution centre for Eastern Canada was also established. This improved the overall speed of inventory and stock from the warehouse to grocery stores. As of 2005, the Company “believe that [they] are taking the significant steps required to ensure that Loblaw continue to grow, to succeed and to provide sustainable value in a changing landscape” (Annual Report 2005, pp. 5-6).

The year 2008 was not as eventful as 2005. They struggled with more setbacks, and had the ideal thought of “Making Loblaw the Best Again”. As stated in their Annual Report, “[They] continue [their] efforts to simplify and sharpen Loblaw, fix the basics that matter to customers, restore innovation, and grow Loblaw through [their] ‘Formula for Growth’”. Strategies for success continued to be built upon from the past, including finding ways to make employees’ jobs easier. This implemented more cost-effective decisions, allowing Loblaw to introduce a more diverse product line, and ultimately managed their cash more effectively. However, Loblaw underwent some new expansions in 2008, such as revamping their supply chain and IT infrastructure. They also opened four new distribution centres which made service levels greater than the past. Loblaw had noticed this new IT infrastructure system cut-down and simplified high workloads and many errors. Loblaw adopted a new and improved pricing index management system, which is currently an important component of the organization. Overall, Loblaw is having a hard time being a consistent high performing company, however they have challenged themselves and are still “making Loblaw worth switching supermarkets for” (Annual Report 2008, pp. 3-8).


The above diagram represents the corporate structure of Loblaw...
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