May 22nd, 2024

Loblaw CEO ‘cautiously optimistic’ about grocery code of conduct

By The Canadian Press on May 1, 2024.

Grocery and drugstore retailer Loblaw Cos. Ltd. raised its quarterly dividend by 15 per cent as it reported its first-quarter profit and revenue rose compared with a year ago. A Loblaws store is shown in Toronto on Thursday May 2, 2013. THE CANADIAN PRESS/Aaron Vincent Elkaim

BRAMPTON, Ont. – Loblaw Cos. Ltd.’s new chief executive said he’s “cautiously optimistic” that the company will be able to come to an agreement on the grocery code of conduct.

The grocer has been one of two major holdouts on the code, along with Walmart Canada, which is intended to promote fair dealings in the industry.

President and CEO Per Bank said on a conference call discussing Loblaw’s first-quarter earnings that in recent weeks, the company has been working closely with the committee creating the code.

The code is meant to be industry-led and voluntary, but the government has indicated it’s open to making it law instead if the major players won’t all get on board.

Loblaw and Walmart previously said they couldn’t sign the code as drafted because they were concerned it would raise prices for consumers.

Bank’s comments came as Loblaw raised its quarterly dividend by 15 per cent and reported its first-quarter profit and revenue rose compared with a year ago.

The parent company of Loblaws and Shoppers Drug Mart says it will now pay a quarterly dividend of 51.3 cents per share, up from 44.6 cents per share.

The increased payment to shareholders came as Loblaw says it earned a profit available to common shareholders of $459 million or $1.47 per diluted share for the quarter ended March 23. The result was up from $418 million or $1.29 per diluted share in the same quarter last year.

Revenue for the quarter totalled $13.58 billion, up from $13.00 billion a year earlier.

Food retail same-stores sales rose 3.4 per cent, while drug retail same-store sales increased 4.0 per cent, with front store same-store sales up 0.7 per cent and pharmacy and health-care services same-store sales up 7.3 per cent.

On an adjusted basis, Loblaw says it earned $1.72 per diluted share in its latest quarter, up from an adjusted profit of $1.55 per diluted share a year earlier.

The grocer’s earnings report came on the same day that a month-long boycott of the company is set to start. Though it’s unclear how widespread the boycott will be, more than 60,000 people have joined the Reddit group organizing the boycott of all Loblaw-owned stores as frustration and distrust of Canada’s major grocers intensifies.

In a previous interview about the boycott, Bank acknowledged the company’s reputation is not where it was pre-pandemic, and said it’s something Loblaw is looking to rebuild.

This report by The Canadian Press was first published May 1, 2024.

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