“Based on our expectations, we add this responsibility to bring more clients to their perspectives based on our expectations,” Chief Financial Officer Richard Durfresne said on a conference call to discuss the results.
“It reflects that more and more consumers like the best results of PCs and are using it, so from our perspective… we’re happy to do that because it reflects what’s going on in our store. ”
Loblaws and the parent company of Shopper Drug MART said net shareholders could receive $462 million or $1.52 for the quarter as of December 28.
The result is a decline in profits of $541 million or $1.72 per share in the fourth quarter of 2023.
In an imminent trade war with the United States, where import tariffs on both sides of the border can be seen, Loblaw has been emphasizing household products in his stores as shops wanting to buy Canadians. It also added a “Swap and Store” feature to its loyalty app to help shoppers find Canadian products easier.
The effort seems to pay off.
CEO Per Bank said: “As we continue to expand this feature, we have seen a significant increase in sales of products identified in products developed in Canada.”
Loblaw is also monitoring how tariffs affect the prices of its U.S. products. If Trump brings tariffs and Canadian retaliation, it may have to pay more for the items it brings from the southern border, which will also put pressure on retail prices.
Banks say less than 10% of the company’s supply comes from the United States, most of which are produced. Canada relies particularly on imports of agricultural products in winter.
“If tariffs are imposed on agricultural products, we will be affected in some places,” Bank said.
The bank said the company had some plans to mitigate the impact of tariffs, but agricultural products were the hardest to replace, and Loblaw was estimated to mitigate the impact on about half of the U.S. companies’ purchases.
“We see these tariffs as a tax on products that both parties will harm consumers,” he said.
But in other areas, the company can better offer consumers another option. He said, for example, Loblaw operators’ home and cleaning products from more than 30 suppliers in the U.S., but also have strong products in its private label brands, without a name and presidential choice.
“If the tariffs will be used for homes and cleaning, then of course, these products will no longer be competitive and all sales will be transferred to our control brands, which are all made in Canada,” he said.
“So it’s good for Canada, it’s good for customers, it’s good for us.”
Dufresne added that the weakness of the Canadian dollar is increasing inflationary pressures as Canada relies on the United States to buy fresh produce.
“That’s inflation, and we’ve been taking it seriously for the past few weeks.”
He said Loonie’s decline also allowed Loblaw to continue to see the fact that prices for large global suppliers are demanding higher.
Loblaw announced Wednesday that it plans to spend $2.2 billion in 2025 to open 80 new grocery stores and drugstores, about 50 of which are discount grocery stores. Many will be smaller stores, and after the company’s first launch of small grocery stores last May, the bank said, building a network of these types of grocery stores.
The investment will be about $10 billion over five years and will also add 100 pharmacy clinics to the company’s network.
The company also plans to open the first phase of its new automated distribution center in East Gillimbury, Ontario. Bank said that growing products start with frozen products.
Loblaw opened 52 new stores and 78 new clinics in 2024.
Loblaw said it made $2.20 per share in the latest quarter, up from adjusted profit of $2 a year ago, according to an adjusted basis.
Revenue totaled $14.9 billion for the quarter, up from $14.5 billion as food retail sales rose 2.5%. Loblaw does not include the favorable impact of Thanksgiving time, saying same-store sales in food retail stores increased by about 1.5%.
Dufresne said that despite the stable gap, consumers are still favoring discount stores over traditional stores.
Pharmaceutical retail store same-store sales rose 1.3%, while pharmacy and medical services same-store sales rose 6.3%, partially offsetting the 3.1% decline in former store same-store sales.
Loblaw shares fell 2.6% to $174.75 on the Toronto Stock Exchange on Thursday.
