Loblaw Invests More Than $1 Billion As Canadian Retail Shows Strength

Loblaw Companies Limited, already a major Canadian supermarket and pharmacy operator, is setting its sights on getting even bigger. The retailer is planning on investing $1.3 billion (Canadian) into various aspects of its business in 2016, including:

  • Building approximately 50 new stores;

  • Renovating 150 existing stores;

  • Expanding e-Commerce; and


  • Increasing IT infrastructure and supply chain projects.

The investment is expected to create nearly 20,000 jobs: 5,000 through store staffing and 15,000 through construction. Choice Properties REIT, a real estate investment trust, will contribute $300 million to the project.

Loblaw has not indicated which of its grocery brands will get the new stores or renovations.

With the ambitious plans for 2016, Loblaw is showing its confidence in the expansion of the Canadian economy. On the whole, retail sales throughout the country have performed strongly to start the year, with January’s $34 billion (U.S.) revenue take capping off the best one-month sales performance since March 2010. The 2.1% sales climb far outpaced initial economists’ expectations of 0.6%.

Although the Canadian dollar is expected to drop to the equivalent of $0.59 in U.S. currency in 2016, Canadian retailers may actually see a benefit to the unstable dollar. Whereas Canadian shoppers may often look to U.S. e-Commerce sites to find foreign products, they would be less apt to go through with such an option if these sites’ prices were relatively higher.

Given Loblaw’s reach, which already encompasses more than 2,300 locations throughout Canada, the speed and size of the company’s investments could set the tone for how retailers of all verticals approach expansion in 2016.



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