Loblaw Companies Ltd has announced a better-than-expected result after its first financial quarter of 2018. At food retail, same-store sales growth, excluding gas operations, was up 1.9 per cent.
“As the retail landscape changes, we are now rapidly scaling our e-commerce pick-up and home delivery services to blanket Canada this year,” said CEO Galen Weston said in a news release on May 2.
“In 2018, the company plans a national roll-out of its on-line grocery business, including the rapid expansion of PC Express pick-up sites and the complementary option of home delivery. PC Express will be introduced to 500 new pick-up sites, bringing the total to more than 700, including more grocery stores, GO Train commuter stations, and the first of many Shoppers Drug Mart stores.”
“Home delivery is currently offered in 11 major markets -- including Toronto, Vancouver and Calgary -- through Instacart. Five more are to follow this year including Montreal, Halifax and Regina. Nationally, almost half of Canadians already have access to PC Express or home delivery. By year end, 70 per cent of Canadians, from coast-to-coast, will have both options. In major urban markets, the company aims for more than 90 per cent coverage, providing customers the option to grocery shop in-person, in their car, or from the comfort of their home.”
Also stated in the news release, CEO Galen Weston mentioned that headwinds from minimum wage increases and healthcare reform will negatively impact the company's financial performance in 2018.
For additional perspective, Frank Gambioli, responsible for national produce procurement, Loblaw, was in Vancouver last week for the Canadian Produce Marketing Association trade show and convention. He noted that 55 per cent of Loblaw’s business is in Ontario and that Loblaw is the country’s largest purchaser of fresh produce.
“We’re looking at any technology to help us – robots that scan the warehouse aisles – anything that is not customer-facing,” said Gabioli. “We’re working on the backroom at distribution centres and figuring out how much automation we can adopt.”
When asked about the ongoing role of Reusable Plastic Containers (RPCs) to transport produce from farm to distribution centres, he said: “We’ve gone back and forth with RPCs. The sanitation piece is critical. For our business, RPCs are on the downside. They have lost momentum.”