Forget all that hand-wringing about the arrival of stiff competition from Target and Wal-Mart.
Loblaws and Sobeys used that to their considerable advantage, squeezing suppliers for lower prices, including across-the-board cuts of two per cent on invoices early last year.
Loblaws fourth-quarter profits more than doubled to $247-million, or 60 cents per share, for the 13-week period ended Jan. 3, up from $114-million, or 41 cents per share, for the same quarter a year earlier.
But that didn't stop the drum-beat of dire warnings about stiff competition. Galen Weston is quoted in the Globe and Mail saying the store-closing sales by Target will hurt Loblaws sales in the short term.
Ah, but in the long term, he also said Loblaws would be better off. No doubt! But what about the suppliers, especially farmers who don't have supply management?
Loblaws revenue was $11.4-billion, which included $3-billion from Shoppers Drug Mart chain which it bought last year. That was up by nearly 50 per cent from $7.6 billion a year earlier.
Loblaw’s adjusted earnings soared to $396-million from $161-million last year.
Loblaws is by far the largest supermarket chain in Canada.
It sells under a number of names including Zehrs, Loblaws, No Frills, Real Canadian Superstore, T&T Supermarket, Fortinos and Provigo.