Loblaw Companies Ltd. is seeing more participation in its popular PC optimal loyalty program, and more points are reduced at the end of the purchase.
Customers redeemed more than one billion dollars at optimal points in 2024, according to the annual Loblaw report. There are more than 17 million optimal active users.
The strength of the program caused the decent retailerist to take a non -monetary charge of $ 129 million in his fourth quarter that promoted the lowest profits year after year, since the company reevaluated the responsibility of the program for outstanding optimal points to reflect the use of the use higher.
“We increase this responsibility based on our expectation that more clients will exchange more of their … points in the future,” said financial director Richard Durfresne, at a telephone conference, discussing the results.
“What reflects is that more and more consumers like the PC in an optimal way, and, therefore, from our perspective … we are more happy to do so because it reflects what is happening in our stores.”
The parent company of Loblaws and Shoppers Drug Mart says that its net earnings available for common shareholders amounted to $ 462 million or $ 1.52 per action diluted for the quarter that ended on December 28.
The result was for a gain of $ 541 million or $ 1.72 per share diluted in the fourth quarter of 2023.
Loblaw highlighting Canadian products
In the midst of an imminent commercial war with the US, which could see import tariffs on both sides of the border, Loblaw has been highlighting national products in their stores while buyers seek to buy Canadian. He also added a “exchange and store” function to its loyalty application to help buyers find Canadian products more easily.
The efforts seem to be paying off.
“As we continue to expand this function, we are already seeing a significant elevation in sales [of] Products identified as prepared in Canada, “the CEO said by Bank.
Loblaw is also monitoring how tariffs could affect the prices of their American products. If Trump provides rates and reprisals from Canada, he may have to pay more for the items that he brings from the south of the border, which would also exert upward pressure on retail prices.
Less than 10 percent of the company’s supply comes from the US, said the bank, and most of them are products. Canada depends particularly on product imports in the winter.
“If rates are applied to the product, there are where they will affect us mainly,” Bank said.
A CBC news investigation discovered that it was discovered that some Canadian supermarkets were overloading customers, potentially by including the weight of the packaging in the cost of meat, which over time could add millions of profits. One of the supermarkets has apologized and everyone has pledged to address the problem.
The company has some plans to mitigate the effects of tariffs, but the product is the most difficult to replace, Bank said, estimating that Loblaw could mitigate the impact in approximately half of the United States that the company buys.
“We are seeing these rates as a kind of tax on products that will harm consumers on both sides,” he said.
But in other areas, the company is better positioned to offer consumers an alternative, Bank said. For example, home products and the cleaning of Loblaw operators of more than 30 US suppliers, but also has a strong variety of products in that category among its private brand and election brands of the president, he said.
“If the tariffs will apply at home and cleanliness, then, of course, these products will no longer be competitive, and all sales will go to our control brands, and all occur in Canada,” he said.
“So that is good for Canada, it’s good for customers and it’s good for us.”
The weakness of the Canadian dollar is to add more inflationary pressure at a time when Canada depends on the US for fresh products, Dufresne added.
“That is inflation, and we have begun to feel it quite seriously in recent weeks.”
Loonie’s decline is also aggravating the fact that Loblaw continues to see requests for increased higher than normal prices of large global suppliers, he said.
Company to open 50 discount supermarkets this year
On Wednesday, Loblaw announced that he plans to spend $ 2.2 billion in 2025, opening 80 new grocery stores and pharmacy, and approximately 50 of them are discount supermarkets. Bank says that many will be smaller stores, building the company’s network of such types of supermarkets after launching small format sinujos stores for the first time last May.
The investment, which is part of approximately $ 10 billion for five years, will also add 100 pharmacy attention clinics to the company’s network.
The company also plans to open the first phase of its new automated distribution center in East Gwillimbury, Ontario. The increase begins with frozen products, Bank said.
Loblaw opened 52 new stores in 2024, as well as 78 new clinics.
On an adjusted basis, Loblaw says that he won $ 2.20 per share diluted in his last quarter, above an adjusted gain of $ 2 per action diluted a previous year.
Revenue for quarter totaled $ 14.9 billion, compared to $ 14.5 billion, since sales of the same food retailers increased 2.5 percent. Excluding the favorable impact of the moment of Thanksgiving, Loblaw says that sales of the same food retail store increased approximately 1.5 percent.
Consumers continue to favor discount stores in conventional stores, although the gap is stabilizing, Dufresne said.
Retail sales in the same medication store increased 1.3 percent, with pharmacy and medical care services that sales in the same store increased 6.3 percent, partially compensated by 3.1 percent in sales of the same store store.
Loblaw’s shares fell 2.6 percent to $ 174.75 on Thursday in the Toronto Stock Exchange.
