Provigo continues to lose ground to Maxi. Around thirty stores will be converted in Quebec in 2024. They will display the yellow and blue of the discount sign replacing the colors of Provigo, which will now have just under 20 stores across the province.
The brand will not disappear from the landscape, however, said Johanne Héroux, senior director, corporate affairs and communications at Loblaw, while recognizing that Maxi “was more in line with new consumer habits.”
The success of discount store brands pushes the company to want to increase Maxi’s presence across Quebec, explained Richard Dufresne, chief financial officer, during a conference with analysts on Thursday at occasion of the publication of the company’s annual report and its fourth quarter results ended December 30, 2023. “Our teams are working on it,” he added.
This strategy will be adopted across the country. “The Escompte store division will be highlighted in particular, while Loblaw intends to extend the presence of the No Frills and Maxi brands to more communities and neighborhoods across the country,” we could read in a press release published by Loblaw.
Consumers who are used to doing their grocery shopping at Provigo will nevertheless be able to maintain this habit. But “the future of the brand is set to change,” warned Mme Heroux. A shift already underway, notably with the renovation of its Kirkland store, Provigo will become a “more niche” brand focused in particular on ready-to-eat products.
The company said earlier this week that it would invest two billion in “the construction of more than 40 new stores, the expansion or relocation of 10 others and the renovation of more than 700 of them.”
A slap on the wrist
All these announcements come at a time when Loblaw is being slapped on the wrist by the House of Commons Standing Committee on Agriculture. He has in fact given a warning to the retailer, as well as to Walmart, because he judges that the two brands are recalcitrant in signing the code of conduct put forward in the industry.
Read “Loblaw and Walmart get slapped on the wrist”
Last week, the Committee sent a letter to the two companies who do not seem to want to join forces. In the eyes of the Committee, they should change course and sign the code of conduct aimed at cleaning up relations between grocers and suppliers. Otherwise, membership could become compulsory, the Committee suggests.
Results
Canadian food and pharmacy giant Loblaw announces earnings attributable to common shareholders of $541 million in the fourth quarter of 2023, or $1.72 per diluted share, compared to earnings of $529 million, or $1. $62 per diluted share in the last three months of fiscal 2022. Revenues totaled 14.53 billion, compared to 14.01 billion a year earlier.
Same-store grocery retail sales increased 2%, while drug store sales increased 4.6%. On an adjusted basis, Loblaw reports earning $2 per share in its most recent quarter, compared to adjusted earnings of $1.76 per share a year earlier.
With the collaboration of The Canadian Press
