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Loblaw to axe stores

Loblaw Canada will close 52 stores across its banner groups as it seeks to boost profitability.

Loblaw, Canada’s largest grocer, also owns the Joe Fresh apparel chain, and the Shoppers Drug Mart which it took over last year.

The closures of the loss-making stores, including supermarkets, drug stores and clothing stores, will cost the retailer about C$300 million annually in sales but boost its bottom line by up to $40 million. The stores are spread across Canada and represent less than one per cent of its total store square footage in its 2300-store network.

But the company says it will build a further 50 stores and renovate another 100 to maintain its market leadership.

Galen G. Weston, president and executive chairman told an analysts conference call the closures were not unusual.

“It doesn’t signal any kind of change from a strategic perspective in any of our businesses,” he said. “We continue to plan to invest and grow in our network”.

Perry Caicco, retailer analyst at CIBC World Markets, said in a client briefing note that Loblaw’s decision “maintains calmness and improves productivity for the whole industry”.

Loblaw reported a second-quarter profit of C$186 million, compared with a loss of $456-million a year earlier.

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