Editor’s note: An earlier version of this story misattributed Per Bank’s nationality. He is Danish.
Loblaw Co. Ltd. is benefitting from Canada’s rapid population growth, which in turn fuelling an expansion of multicultural products in its stores, the grocery giant’s CEO said in an earnings call Wednesday.
Per Bank, chief executive of Canada’s largest grocer, told analysts on a call Wednesday morning shortly after the company reported its third-quarter earnings that Loblaw is finding success catering to Canadian newcomers.
Stores in the company’s T&T Supermarket chain, which caters to Asian cuisines, “continue to outperform” the rest of Loblaw’s existing network, Bank said.
Loblaw opened three new T&T stores across Ontario and Quebec in recent weeks as part of an expansion push. The company will open its first U.S. location in Bellevue, WA, next month.
Private-label products from the T&T banner are also increasingly making their way into the shelves of the company’s “conventional” stores, Bank said.
The exec hailing from Denmark pointed to Canada’s rapid population growth as supporting demand for more “multicultural” products.
Even with the federal government’s stated plans to stem the flow of immigration into the country in the years ahead, Bank said Loblaw anticipates growth will still be consistent enough to drive sales higher across the grocery industry.
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“We expect that that trend should continue, maybe not at the same pace, but it should be a positive for us going forward,” he said.
“That’s a tailwind that is very positive for grocery players like us.”
Loblaw misses revenue estimates
Meanwhile, Loblaw reported that it missed third-quarter revenue estimates on Wednesday, hurt by a slowdown in the demand for its non-essential goods such as household items and electronics.
Consumers have been holding back on discretionary spending as prices remain relatively high despite inflationary trends declining, hurting demand for higher-end brands offered by retailers such as Loblaw.
However, demand for value deals has helped Loblaw’s discount banners such as No Frills and Maxi.
“Drug front store sales reflected continued strength in the beauty category but were pressured by the Company’s exit from certain low margin electronics categories and lower customer spend on convenience items,” the company said.
Same-store sales in the food retail segment grew 0.5% in the third quarter, compared with 4.5% a year ago.
The company’s quarterly revenue rose to C$18.54 billion ($13.28 billion) from C$18.27 billion a year earlier, compared with analysts’ average estimates of C$18.65 billion, according to data compiled by LSEG.
Loblaw’s adjusted earnings per share was C$2.50 in the third quarter, topping expectations of C$2.45.
— with files from Reuters
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