TORONTO -- Loblaw Cos. here said it intends to continue expansion of its general merchandise assortment at units of Maxi & Co. and some larger Loblaw locations in Quebec, vs. expanding The Real Canadian Superstore banner there.
According to Loblaw President John Lederer, "We don't really see ourselves importing that [The Real Canadian Superstore] program into the Quebec market. We do see it coming through the Maxi & Co. business [the expanded version of the company's food-only Maxi stores] and the larger Loblaw stores there. But for now, we are going to simply play the Maxi & Co. general merchandise model while we embellish the offering within our existing Loblaw portfolio."
Lederer made his remarks during a conference call with industry analysts to discuss financial results for the year and fourth quarter ended Jan. 1 -- a 52-week year with a 13-week fourth quarter, compared with a 53-week year with a 13-week fourth quarter in 2003.
Sales for the year rose 3.9% to $21 billion (U.S.), same-store sales rose 1.4%, and net income rose 14.6% to $774.7 million. For the quarter, sales fell 0.7% to $5.1 billion, same-store sales climbed 1.5%, and net income rose 14.7% to $269.7 million.
Results for 2004 included a charge of $17.6 million (U.S.) resulting from the addition of The Real Canadian Superstore banner into Ontario. Results in 2003 included a charge of $20 million from the voluntary early retirement offer accepted by Ontario employees affected by The Real Canadian Superstore labor agreement.
Lederer said the increased emphasis on general merchandise in Ontario has had a positive impact on sales and a neutral impact on margins. It also requires more capital "because we have got to finance the inventory."
Steve Smith, executive vice president, said Loblaw anticipates opening between 10 and 12 Real Canadian Superstores in Ontario this year on top of the 13 it opened last year, ranging in size from 120,000 square feet to 150,000 square feet.
Rick Mavrinac, executive vice president and chief financial officer, said business in Western Canada is evolving "in as powerful a fashion as in past years. Our new large stores -- the 150,000-square-foot model with an enhanced perishables proposition -- are performing very well. We've opened a number of Extra Foods -- in the 43,000 to 55,000-square-foot range -- that are also performing very well."
The company said it plans to relocate its main office to Brampton, Ontario -- a suburb northwest of here -- during the third quarter. The move will allow Loblaw to combine administrative and operating offices from across Ontario and a general merchandise operation from Calgary into one facility.
