MONTREAL (FNS) -- Provigo here announced plans to double its market share in Ontario to nearly 20% within five years in order to fend off new competition from Loblaw Cos., Toronto, and Sobey Stores, Stellarton, Nova Scotia.
Both Loblaw and Sobey have announced new store openings in Provigo's traditional stronghold of Quebec where it has a 38.1% share of the estimated $10 billion, ($14 billion Canadian), grocery market vs. 31.8% in 1994.
President and Chief Executive Officer Pierre Mignault told last week's annual meeting that growth will come from the $11 billion ($15.3 billion Canadian) Ontario grocery market where Provigo plans to double its current market share of 9.6% over the next five years.
The 9.6% figure has remained stagnant despite the addition of 2.5 million square feet of new food retailing space over the last three years, indicating the competitive nature of the Ontario market, Mignault noted. He said Provigo plans to chip away at the 60% of the Ontario grocery market that Loblaw doesn't control by adding 20 more stores in that province over the next three years to its existing 104 Ontario outlets under the Loeb, Maxi and Maxi & Co. banners.
The Maxi & Co. banner is a new format introduced to the Quebec market last September that adds 30,000 square feet of frequently-purchased consumer goods, including home accessories, audio, video and computer products, to the 55,000-square-foot Maxi food store. Mignault noted that "several American and European investors" have expressed an interest in the Maxi & Co. concept and said Provigo could enter into some joint-venture program with one or two of them in 1988 or 1989.
The company released its first-quarter results during the annual meeting, including a record profit of $11.6 million, ($16.2 million Canadian) for the period ended April 19, up 8% from the $10.8 million, or ($15 million Canadian) earned a year earlier. Sales rose 2.6% to $964 million, or $1.3 billion Canadian.