LOBLAW PLANS FOR QUEBEC ARE OPPOSED

BRIAN DUNN

MONTREAL (FNS) -- Though it has yet to open a supermarket in the province of Quebec, Loblaw Cos. already is a target of opposition among store owners and citizens here.

More than 500 residents of St. Laurent, a Montreal suburb, have signed a petition opposing a zoning change to allow the Toronto-based wholesaler and retailer to set up shop there. The city now must decide whether to hold a referendum on rezoning the proposed site from residential to commercial. St. Laurent can opt to withdraw the rezoning, which would force Loblaw to look for another site in the city.

Loblaw executives remain tight-lipped about expansion into Quebec and could not be reached for comment last week. The company reportedly has targeted 12 prime store sites in and around Montreal -- the second time it has attempted to enter Quebec. Several years ago, Loblaw tried to buy the struggling Steinberg supermarket chain, which eventually was carved up between Metro-Richelieu and Provigo, both based in Montreal.

At Loblaw's annual meeting this spring, officials said the company aims to boost its retail presence in Ontario, Quebec and the Maritime provinces. President Richard J. Currie said expansion into Quebec is "inevitable" but did not specify plans. This year, Loblaw plans about $300 million in capital expenditures and to hike net gross square footage by 5%. Most spending will be in Eastern Canada, primarily for about two dozen new stores, each more than 45,000 square feet.

Loblaw, Canada's biggest supermarket operator, supplies nearly 7,000 stores and operates roughly 400 stores, including about 300 supermarkets.

Bernard Desjardins, owner of a Metro supermarket in Lachute, about 50 miles northwest of Montreal, said he would close if Loblaw opens a store in his town. He has been joined by two other supermarket owners in Lachute who are organizing an anti-Loblaw campaign. According to Lachute mayor Daniel Mayer, Loblaw has not formally applied for a building permit for its proposed site next to a local Wal-Mart. He said he sees no reason for refusing one, since the site is commercially zoned.

Metro-Richelieu and Provigo, which together control about 80% of Quebec's food retail market, have stated publicly that they are not concerned that Loblaw is eyeing Quebec. Both are spending millions to open new, bigger stores and refurbish existing locations. They also are expanding private label to compete with Loblaw's popular President's Choice brand. Provigo has about 400 house brands, and Metro-Richelieu has 1,800.