Loblaws says almost 99 per cent of products are on shelves after improvements

The Canadian Press ~ staff The Guardian
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Atlantic Superstore, Charlottetown

The CEO of Loblaws, which owns the Atlantic Superstore, says a years-long overhaul of the grocery store operator's supply chain is finally paying off, with almost 99 per cent of the grocery store operator's products available on the shelves for customers.

"Product availability is 98.8 per cent," chief executive Vincente Trius told analyst at Loblaw Companies Ltd. (TSX:L) analyst day.

"The product is there," Trius said from Toronto via webcast.

Trius said Canada's largest grocery chain may need to improve its assortment of products, "but the supply chain delivers the product and the product is on our shelves."

Loblaws has said it's still not done with the overhaul - it faces a cash outlay of $70 million this year to bolster its information technology and supply chain and $40 million to continue developing its marketing or "customer proposition."

Spending on the infrastructure overhaul - which should reduce costs and redundancies once completed - is expected to peak in 2012 after more than five years of investment.

The Toronto company doesn't expect profits from operations to be able to cover the expenses it will book in 2012 and as a result expects net earnings per share to be down year-over-year, with more pressure in the first half of the year.

Trius also told analysts how important it is for food to be fresh and he said that goes back to the supply chain and how the food gets to the stores.

"Fresh is about the quality, it's about the experience, it's about what really brings the loyalty. It's about how you source, how fast you deliver at the right speed to ensure freshness. We call it field-to-fork. Sometimes I call it field-to-stomach."

"Fresh is about the quality, it's about the experience, it's about what really brings the loyalty. It's about how you source, how fast you deliver at the right speed to ensure freshness. We call it field-to-fork. Sometimes I call it field-to-stomach," Vincente Trius

Trius said Loblaws has put new transport and warehouse management systems in place, cut the number of distribution centres to 23 from 27, trimmed expenses and improved customer service. He said the company has labour agreements that give it flexibility and a competitive edge.

The grocery chain, which operates across Canada under numerous banners including Loblaws, Real Canadian Superstore, Zeros, Provigo, No Frills and Atlantic Superstore, launched the revamp in 2007 in an attempt to resolve supply difficulties that had resulted in stock not reaching stores efficiently.

Loblaws wants to lead in offering products to new Canadians, Trius said, adding that $1 out of every $3 going forward will be spent by new Canadians.

"This is a country that's a mosaic and this is a huge opportunity when I look at the market. What an opportunity with new Canadians and what an opportunity with all Canadians."

He also said Loblaws wants to build on its success of the Joe Fresh clothing brand in other categories such as children's goods, home essentials and beauty products.

Loblaws will grow by adding more square feet yearly but also by looking opportunities for smaller stores as more Canadians opt for condominiums, he said. Loblaws also wants to grow e-commerce through its Joe Fresh brand by 2013 and have a "best-in-class loyalty card."

"I want to know our customers better. I want to be able to communicate to them better."



Organizations: Loblaw Companies Ltd., TSX

Geographic location: Toronto, Canada

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Recent comments

  • Joseph
    March 07, 2012 - 19:48

    Canno't shop at Atlantic Superstore any longer. They advertise items at special prices and in many cases the items on sale are not on the shelves. or are out of stock. Another thing there prices in many cases are too expensive. I now shop at Sobeys where, when something is on sale there is PLENTY of the item in the store. NO MORE SUPERSTORE FOR ME...

  • ombudsman
    February 29, 2012 - 17:38

    Milk. Yogurt. Soy products as well as soy and almond milk. Eggs. Bread. If you are a consumer and shop at Atlantic Superstore for these products , check the expiry dates on all these products. There seems to be a prevalence to sell product that has already expired or is on the verge of expiring. Buyer beware should not be a catchphrase at grocery stores.

  • Joe Martell
    February 28, 2012 - 22:38

    Here's an improvement idea...start picking up the garbage in your parking lot instead of depending upon mother nature to do it for you!

    February 28, 2012 - 20:27

    You mean no more tripping over goods stocked in the main entrance way??? Take a look, Superstore has managed to defeat the renovations and is a walking disaster for people with vision problems. Yes, buying 'local' is a better deal,,, at least the locals do not put the produce on roller skates and move it up down the aisles! Only a Toronto 'consultant' would think things have improved.

  • Islandwoman
    February 28, 2012 - 16:25

    If you want great quality food at reasonable prices, shop your local co-op. The prices compare favourably and the quality is much better. It's your best value by far.

  • More changes needed
    February 28, 2012 - 13:03

    Your still to expensive know matter how many bells and whistles you put in your stores,compete with COSTCO....you will then see a difference....