We review Loblaw’s first quarter results and three of its major initiatives for the current financial year.
Food retail same-store sales up 2.0%
Loblaw’s first quarter revenue increased 3.1% to $10.7bn, with retail segment sales up 2.9% to $10.5bn. Food retail same-store sales increased 2.0%, with drug retail same-store sales up 2.2%. Operating income increased 19.9% to $451m. Within food retail, while store traffic was flat, basket size improved, with the company’s internal food inflation measure slightly lower than the official CPI of 3.3%.
Embedding data across the business
Loblaw continues to make progress with its process and efficiency initiatives. This is a major project for the company with around 400 initiatives being tracked across six different work-streams. The aim is to generate cost savings which enable further investment in technology and innovation. This includes the better use of data. It is being used extensively across the organisation to provide more relevant customer offers, improve promotional decision making and more effectively manage its supply chain. A new leader has been appointed for its data and analytics centre of excellence, with over 400 people working in related roles.
Improving ecommerce efficiency and service
Investment continues in its ecommerce proposition, with a focus on improving service times. New technology has been introduced to help it better track the efficiency of its operation and its ability to meet a five-minute pickup time. With most stores offering two-hour pickup windows, it's testing its ability to offer customers a one-hour cut off. With its PC Express pickup service available at over 700 locations, the focus is on refining the offer before any further significant expansion.
Growing private label penetration
Loblaw is also developing new meal solutions. It has launched a range of ready to eat and ready to heat meals through its delivery and pickup services, while later this month it will be launching a range of meal kits in almost 100 stores in Ontario. This forms part of a renewed push on private label, an area where the business has consistently led in Canada. A new range of meals, under the Summer Shack brand, will launch in the coming weeks. The retailer plans to continue growing the penetration of its key ranges including President’s Choice, No Frills, Farmer’s Market and Life.
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