TORONTO -- Loblaw Cos. here plans to continue the expansion of its Real Canadian Super Store format "as long as we can drive topline sales and make the numbers work," John Lederer, president, told financial analysts last week.
Loblaw opened five Real Canadian Super Store locations in Ontario last year, and Lederer said the company is "very confident with the sales those stores have generated that we're right on track."
He said a 148,000-square-foot Real Canadian Super Store the company opened in Calgary, Alberta, last year will serve as a prototype for additional, larger-sized stores of that format, with another similar-sized prototype set to open in Toronto later this year. The original Real Canadian Super Store locations in western Canada were in the 100,000 to 120,000-square-foot range.
Future RCSS growth may include some conversions as well, Lederer said. "Converting stores has been part of our portfolio management for the last decade, and we will continue to do conversions as markets change," he explained.
Lederer also said Loblaw plans to introduce the Extra Foods banner -- its no-frills format that's been operating exclusively in western Canada -- into Ontario later this year. "That banner looks very strong and powerful, and we look for it to drive sales across this country in the years ahead," he said.
In the year and fourth quarter ended Jan. 3, it said its decision to invest in lower prices helped boost sales in all regions of Canada.
Sales for the 53-week year rose 9.3% to $19.3 billion (U.S.), including a positive impact of 2% from the extra week. Same-store sales rose 4.6%, while net income jumped 16.1% to $645.2 million. Sales for the 13-week quarter increased 12.9% to $4.9 billion; same-store sales rose 3.3%, while net income was up 10.9% to $224.5 million.
In conjunction with the introduction of its RCSS format in Ontario, 541 employees accepted the company's offer for voluntary early retirement, which resulted in a $19 million charge to operating income for the fourth quarter; after the quarter ended, another 94 employees accepted the offer, which will result in an additional charge of $1.5 million in the first quarter, Lederer said.
Asked about Loblaw's financial guidance for 2004, Lederer said the company's goal is annual topline growth of 6% to 8% and bottom-line growth "north of 15%."
