Pandemic Demand Lifts Comps at Loblaw
The pandemic is driving demand at Canada's Loblaw Companies, as the grocery chain said same-store sales both in-store and online rose impressively during the fourth quarter.
“In stores and online, our network met the challenge of outsized sales growth, keeping Canadians fed and well,” said Galen G. Weston, Executive Chairman, Loblaw . “Our purpose – helping Canadians live life well – has inspired ongoing commitments to colleague safety, lower prices, and strategic services that matter to customers. Looking ahead, we have financial momentum, our strategy has advanced, and our core business is well positioned.”
The company’s e-commerce sales increased 160% compared to the fourth quarter of 2019. But the increase in e-commerce is proving to be an expensive headwind to profitability in the longer term, the company said in its annual report Thursday.
For the quarter ended Jan. 2, Loblaw reported revenue of $9.8 billion. This represented an increase of $818 million, or 7.1% when compared to the fourth quarter of 2019.
Retail segment sales were $9.6 billion. This represented an increase of $844 million, or 7.5% when compared to the fourth quarter of 2019.
Food Retail (Loblaw) same-stores sales growth was 8.6%, continuing at elevated levels, with the company’s Market division delivering strong growth of 10.6% and the Discount division delivering 7.4% growth.
Drug Retail (Shoppers Drug Mart) same-store sales growth was 3.7%, with pharmacy same-store sales growth of 5% and front store same-store sales growth of 2.8%.
The company said it incurred approximately $42 million in COVID-19 related costs to ensure the safety and security of customers and colleagues.
Operating income was $635 million. This represented an increase of $94 million, or 17.4% when compared to the fourth quarter of 2019.
Net earnings available to common shareholders of the company were $310 million. This represented an increase of $56 million, or 22% when compared to the fourth quarter of 2019. Diluted net earnings per common share were 88 cents. This represented an increase of 18 cents, or 25.7% when compared to the fourth quarter of 2019.
Loblaw Cos. Ltd. operates 2,431 stores in Canada. The Brampton, Ontario-based company is No. 13 on The PG 100, Progressive Grocer’s 2020 list of the top food and consumables retailers in North America.
