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Loblaw Cos. Ltd., Canada's largest grocer, has revealed its plans to close 52 unprofitable stores, including "select pharmacies and grocery stores," over the next 12 months.
"On an annualized basis, the closures will decrease sales by approximately $300 million [US $392 million] but will result in a favorable impact to operating income of approximately $35 million to $40 million, [US $45.7 million to US $52.3 million]," the Brampton, Ontario-based grocer noted in its latest financials.
In an analyst conference call, Loblaws President Galen G. Weston said he expected the move would enable the leaner company to boost its operating income and increase the number of jobs in its stores, The Toronto Globe and Mail reported.
Other Canadian retailers that have shuttered stores in response to stiff retail competition from e-grocers and foreign rivals like Walmart include Sobeys Inc., the country's No. 2 grocer; and Target Canada, which closed all of its locations in the wake of filing for bankruptcy protection.
Loblaws reported a second-quarter profit of $186 million [US $243 million], versus a $456 million loss [US $595.9 million] in the year-ago period, which included costs related to the company’s acquisition of Shoppers Drug Mart. The company’s revenue rose to $10.54 billion [US $13.8 million] from $10.3 billion [US $13.5 million] last year, aided by strong food retail sales, and it posted higher same-store sales.