In Today's Star:
Loblaw unveils Gardens plan
Struggling supermarket chain says 22-month redevelopment of vacant hockey shrine will begin this summer with a cleanup
Feb 21, 2007 04:30 AM
Dana Flavelle
business reporter
Three years after Loblaw Cos. Ltd. won a hard-fought battle to get its hands on Maple Leaf Gardens, the beleaguered supermarket chain says it is ready to begin redeveloping the hockey shrine.
Details of the company's plans for the storied former arena, which has played host to Stanley Cup victories as well as rock stars and royalty, remained sketchy yesterday.
But the company said it has received all the necessary permits and approvals and is ready to begin the interior cleanup this summer, which could be followed by 22 months of construction.
In the meantime, Loblaw said, it planned to get the ball rolling with a "symbolic gesture" by hosting its annual analyst meeting today in the historic rink.
"It's a nice nod to the future. (Loblaw executive chair) Galen (G. Weston) has always said it's a great combination of two Canadian icons," company spokesperson Elizabeth Margles said of the decision to hold the meeting in the College St. arena.
Under the heading "Making Loblaw Great Again," the 34-year-old heir to the Weston fortune is expected to explain in more detail his new management team's plans for restoring the business to its former glory.
Analysts said they were expecting few surprises.
In a recent report to investors, Perry Caicco of CIBC World Markets said investors hoping the company will do something dramatic to boost its stock price would be disappointed.
Caicco ruled out aggressive moves such as selling the company's financial-services business, the trucking fleet or real estate.
Loblaw's share price has fallen 35 per cent in the past two years as its efforts to compete with lower-cost rivals, such as Wal-Mart Canada Corp., hit some major stumbling blocks. The grocer has been opening larger stores that also carry non-food merchandise while closing less-efficient warehouses and opening new ones.
"They didn't execute that well, and, while they were doing so, they took their eye off the ball," said Gavin Graham, chief investment officer at Toronto-based Guardian Group of Funds Ltd., which holds shares of Loblaw's parent company, George Weston Ltd.
At the same time, Loblaw's rivals Metro, Sobeys and Safeway Inc. were "revitalizing" stores, improving fresh produce and service and developing their own store-brand lines of products, Graham said.
Loblaw's new executive team has already hinted at some of the company's future plans, including focusing more sharply on its customers and the in-store experience.
The company recently began re-emphasizing its PC Blue Menu brand, a line of "healthier for you" products available only in Loblaw-owned stores, with additional in-store signage, TV advertising and its quarterly flyer, the Insider's Report.
Such proprietary brands of-ten are more profitable for retailers.
The company operates 1,000 stores across Canada under a variety of names, including No Frills, Fortinos, Loblaws, Real Canadian SuperStore, and in Quebec, Maxi and Provigo.
Since taking over as head of the firm last fall, the younger Weston has announced plans to cut up to 20 per cent of head-office jobs, and taken massive writedowns on unsold merchandise and its struggling Provigo chain in Quebec, leading to its first annual loss in two decades.
Loblaw's biggest challenge is Wal-Mart, said Karl Moore, a professor at McGill University's Desautels Faculty of Management.
"Loblaw is trying reduce their internal costs to be more competitive, while stressing their Presidents' Choice brands and other things that differentiate them in a way that Canadians respond to," Moore said. "I don't think they've done a bad job. Clearly, there's some things they need to clean up."
But they're going to lose some ground to the newest entrant into Canada's grocery market, Moore said.
"It's just a fact of life."