Loblaw to open 38 new Shoppers Drug Mart and grocery store locations — will convert or renovate almost 600 more
Loblaw, the country's largest grocer, says it plans a huge increase in spending this year as it renovates hundreds of locations and looks to open 38 new or relocated grocery and Shoppers Drug Mart stores.
Two-thirds of the new locations will be Shoppers Drug Mart stores as the company drives toward more pharmacist-led clinics.
As Canadians continue to struggle with soaring food costs, Loblaw said it will prioritize discount grocery locations (the company owns the No Frills chain).
The company said it will spend more than $2 billion on capital investments in 2023. Loblaw previously disclosed that figure (which will be a record amount) in its annual report but announced details for the investments Friday.
Loblaw, which has continued to report strong profit growth, is increasing its investments by more than a fifth from the $1.6 billion it spent in 2022.
Retail analyst Lisa Hutcheson said the scale of the company's planned renovations - it said it will convert or renovate almost 600 stores - is likely owing in part to hasty changes made to facilitate online orders during the pandemic.
It's an opportunity for them to refresh that, which was probably quickly put in place, and this is probably (about) properly ensuring its functionality," said Hutcheson, managing partner at retail consultancy J.C. Williams Group.
They haven't done any kind of refreshes or modernizing of their stores that I can think of," she said, adding that the newest Ontario store she can recall Loblaw opening is the redeveloped warehouse at Lake Shore Boulevard West and Bathurst Street, which opened in 2020.
Prioritizing discount stores makes sense" for Loblaw she said, noting that Dollarama has been really winning market share." The discount giant said last week it plans to open 70 new locations across the country.
And with pharmacists in Ontario now able to prescribe certain common treatments, Hutcheson said she also understands the push to open more drugstores.
Shoppers Drug Mart has been a winning business for Loblaw, she added, noting customers often spend on higher-priced food at the locations while waiting for vaccines or prescriptions, paying a premium for that convenience.
Loblaw, which employs about 220,000 workers, said the investments will create 6,000 jobs. Hutcheson said it could be a challenge for the company to fill those roles amid an ongoing labour shortage for retail workers.
Loblaw opens new stores regularly (it opened 13 last year while it closed 10) but does not always announce its plans for the year in connection with its capital spending. It last made such an announcement in 2017, when it said it would open 30 stores and renovate 500.
It has lately been in the news for its association with food inflation, an issue the company denies it is profiting from.
Last week, the company made headlines when it was disclosed in a corporate filing that Galen Weston (chairman and president of Loblaw Cos. and chairman and CEO of the family-controlled holding company George Weston Ltd.) received a $1.2 million raise in 2022, bringing his total pay to $11.79 million.
Loblaw said 14 new or relocated grocery and drugstore locations are planned for Ontario this year along with renovations to more than 330 existing stores in the province. The company did not disclose specific locations targeted for improvements or store openings.
It also plans to open or relocate three stores in Atlantic Canada, three in Quebec and 18 in Western Canada.
The renovations range from expansions in our fresh hall, to updates to our front end and full refreshes of stores to modernize the look and the experience for customers," said spokesperson Catherine Thomas in an email.
She added that the company is also working on upgrades to increase energy savings and reduce greenhouse-gas emissions through new equipment.