Loblaw is seeing more sales at its discount grocery stores such as No Frills rather than at its full-priced stores.Chris Young/The Canadian Press
Loblaw Companies Ltd. L-T reported increased sales and profits in the third quarter, as shoppers still stinging from high food inflation in recent years visited its discount grocery stores looking for savings.
Canada’s largest grocer reported on Wednesday that its revenue grew by 4.6 per cent to $19.4-billion in the quarter ended Oct. 4.
Discount stores such as No Frills, Maxi and Real Canadian Superstore continued to outperform the company’s full-price grocery stores. Loblaw has been expanding its offerings in that space, opening 19 new discount stores in the quarter.
The number of visits to Loblaw stores grew, as did the size of shoppers’ purchases during each visit. Same-store sales – an important metric in the industry, which tracks sales growth at locations open for more than a year to show growth not tied to new store openings – grew by 2 per cent in the quarter at Loblaw grocery stores, and 4 per cent at Shoppers Drug Mart.
Pharmacy and healthcare services contributed to growth at Loblaw-owned drugstores. The company opened 55 new pharmacy clinics in the quarter, part of a larger strategy to expand its healthcare business within Shoppers Drug Mart stores.
E-commerce sales increased by 18 per cent in the quarter.
Loblaw’s net earnings available to common shareholders grew to $794-million or 66 cents in diluted earnings per share, compared to $777-million or 63 cents per share in the same period last year.
During the quarter, the company wound down its Theodore & Pringle optical business, after striking an agreement with Specsavers Canada inc. to open a number of its eyewear locations in grocery stores across the country.
The closure of the Theodore & Pringle business led to one-time expenses of $22-million. Not including that impact, and other adjustments, adjusted net earnings grew to $828-mllion or 69 cents in diluted net earnings per share.