A Study of Loblaw Companies Limited
Executive Summary
This study was conducted to analyze Loblaw Companies Limited, which has been at the forefront to help Canadians live smoothly and comfortably. Loblaw Companies Limited is the leading group of companies that supplies food and pharmacy-related stuff. They provide apparel, pharmacy, grocery, financial services, health, and beauty products. This report will disseminate important information regarding its different stores distributed all over the world. It will also provide a brief history of how Loblaw grew to be a “giant” in the food and pharmaceutical industry. The report will also display the company’s ethics and the different stakeholders associated with the company. Moreover, the report will provide an in-depth overview of the company explaining its operations, missions, goals, returns, leadership, etc. The report will also analyze both the primary and secondary problems facing the company (Loblaw Companies Limited) and provide a SWOT analysis of the company. Also, the restrictions/constraints faced by the company will be analyzed in detail. Finally, the report will outline alternative courses of action(s) and options for the company to solve its problems and show the company’s restrictions. Eventually, the report will include recommendations that the company can consider and how they can implement those recommendations.
Introduction
Methodology
The study employed a qualitative approach to collect data concerning Loblaw Companies Limited since numerous scholars have researched the company. By the use of secondary data from the official website of Loblaw Companies Limited, other websites talking about Loblaw, and scholarly articles, the report displays a brief overview of the company, problems facing the company, analysis, recommendations, and possible solutions to the problems. Data was analyzed by classifying and grouping the information under the appropriate various sub-sections/themes. Each sub-section/ theme was examined to understand the writers’ perceptions and views. However, the study was faced with problems such as inadequate scholarly articles whereby information from the unlimited verified websites catered for. Also, there was the problem of insufficient research time hence being forced to research vigorously. Also, most of the accessed documents were out of date, focusing mainly on the past. Therefore, we had to rely on the official website, which is updated more frequently primarily.
Objectives
- To have a clear understanding of the company’s evolution to be one of the most outstanding grocery and pharmaceutical retailers in Canada.
- To have an insight into what drives the company.
- To have an understanding of how the company helps Canadians and other people all over the world to live happily.
- To investigate whether the company is profit-oriented or consumer-oriented.
- To understand the different ways that the company uses to ensure maximum profitability.
- To identify the strengths and weaknesses of the company.
- To determine primary problems facing the company.
- To determine the secondary problems facing the company.
- To find ways to help the company solve the challenges facing them.
Ethics under Loblaw
Due to the company’s complexity, Loblaw Companies Limited has set up a robust code of standards and ethics for its employees, suppliers, and customers to avoid friction and conflict, which can negatively affect the company. Some of the set ethics are,
- Loblaw values honesty and encourages all stakeholders to report dishonest or unethical cases. The company strongly urges anyone suspicious of any malicious activity to step forward to report the cases.
- Loblaw has created a Supplier Code that expects all its suppliers, brokers, contractors, and other associates to follow. The Supplier code protects its workers.
- Loblaw allows people who report any form of oppression or any unethical issue to do it anonymously to respect their right to privacy. Moreover, they assure them that they will not share their information only if required by the law.
- Before employing suppliers, Loblaw verifies them to check if they possess the right documents.
- Loblaw also monitors its offshore factories to ensure that they comply with the Workplace Conditions Assessment (WCA) standards.
- Upon non-compliance with WCA, Loblaw can immediately cancel, suspend or terminate their contracts.
Stakeholders
- Employees who help the organization run the various daily activities. They are also involved in promotional activities, and in total, they are over 190,000 full-time and part-time employees across all the stores all over the world.
- Customers in which the company relies on to be able to be in the business and attain profitability. (Canadians form the major market)
- Shareholders- These are companies and people who fund the various companies under Loblaw. Currently, Wittington Investments is the largest shareholder, with a 49% ownership of shares. Second in position is 11040537 Canada Inc, with a common stock of 2.9%. Third in place is Caisse de depot et placement du Quebec with a 2.2 % stock ownership. It is important to note that the top two shareholders own 52% of the total shares, which is considerable. The public owns 25% of Loblaw hence can influence some decisions in the company. https://simplywall.st/stocks/ca/consumer-retailing/tsx-l/loblaw-companies-shares/news/what-kind-of-shareholder-owns-most-loblaw-companies-limited-tsel-stock/#:~:text=Hedge%20funds%20don’t%20have,holding%202.2%25%20of%20the%20stock.Suppliers- Loblaw has to depend on external suppliers to provide them with the various necessities required for their daily operations. Mainly, they rely on Canadian farmers to supply them with fresh agricultural products instead of importing them from overseas. Moreover, Loblaw depends on around 300 domestic stores to provide them with groceries. Moreover, Loblaw depends on Canadian greenhouse and indoor farmers to supply them with fresh produce. https://www.newswire.ca/news-releases/loblaw-to-spend-150-million-more-each-year-supporting-canadian-farmers-686662271.html
- Government- Loblaw cooperates with the Canadian government to ensure a smooth running of its activities. They pay taxes and make sure that they meet the legal requirements imposed by the government. In return, the government provides incentives and subsidiaries to the company to ensure that it expands to be a global company.
- Communities- These include society and people who surround the various Loblaw stores all over the world. Loblaw is a product of social responsibility and does all it can to ensure that it maintains a good atmosphere with the communities.eg. ReportProtection of environment.
- Marine Stewardship council
Overview of the Company
Background Information on the Company
Loblaw Companies limited initially began in 1919 as a grocery store with only four employees and has grown to be one of the most important groceries and pharmaceutical stores in Canada and worldwide. Founded in 1956, Loblaw provides apparel, grocery, pharmacy, financial services, and health and beauty products to Canadians. Loblaw is the greatest shareholder of Choice of Practices Real Estate Investment Trust. Loblaw uses Loblaws, Extra Foods, No Frills, Your Independent Grocer, Zehr Markets Atlantic SaveEasy, Fortinos, and Provigo as examples of its trade names.
Under their primary purpose, “Live Life Well,” Loblaw helps Canadians live comfortably and healthy as it helps Canadians feed and treat their children and families. Today, Loblaw boasts of having more than 2400 stores distributed across Canada, with over 190,000 employees occupying various positions. Loblaw’s top three brands include; President’s choice, no name, and Life Brand. Loblaw operates under three main segments: Financial Services, Retail, and Choice Property Real Estate Investment Trust. Loblaw boasts of over twenty-seven (27) stores that aid in distributing and supplying products to their various stores all over the country.
Additionally, Loblaw possesses 1,142 franchised and corporate grocery stores that provide groceries to the customers. Moreover, Loblaw owns six stores which are run independently. The stores are;
- Shopper Drug Mart, the largest retail dealing with pharmaceuticals, health, beauty, and grocery items.
- Joe Fresh, which provides clothes that are up to date and fashionable.
- Presidents Choice Financials which provides financial services to people. These services include banking, credit, mortgage, investments, and insurance services.
- Real Canadian Store, which provides multicultural foods at a discounted price and hot deals.
- Loblaw’s Market which offers exceptional foods to its consumers.
- There are also other emerging stores, which include; Wholesale Club, Liquor store, Loblaw Optical, etc.
By utilizing PC Plus and Shoppers loyalty programs, about a third of the Canadians get the opportunity to shop for free at the company’s expense.
Nowadays, Loblaw boasts of several achievements whereby three of the most important awards and recognition are; Best Diversity Employers, Top Employers for Young People, and Canada’s Top 100 Employers.
Mission
- Emerge to be Canada’s food and pharmaceutical retailer by meeting all the customer wants.
- To reflect the nation’s diversity, which is; “Be a Great Place to Work.”
- To protect the environment.
SWOT Analysis Of Loblaw Companies Limited
Strengths
- Canada’s largest food and grocery retailer
- Benefits of large economies of scale and vast knowledge of the Canadian market.
- The company’s ability to come up with strategies to manage the different stores without straining in any way.
- Numerous brand banners such as Zehr, Loblaws, Fortinos, No Frills, Atlantic Superstore, etc.
- A well-known brand name, known not only in Canada but all over the world.
- Distributed all over Canada in all provinces.
- Boasts of three private-label brands, which include; President’s choice, no name, and Life Brand
Weaknesses
- Lacks adequate ability to supply globally.
- Weak management due to the high-levels of the complexity of the company.
- Disadvantages associated with large economies of scale.
- High prices of their products as compared to their competitors.
- Too much underutilized facilities and space.
- The problem of underperformance of a number of stores due to lousy management.
- A complex corporate structure
Opportunities
- An expanding market.
- Venture into broader and new geographical markets all over the world.
- Digitalization, which can enable Loblaw to do business with any person no matter their location.
- A better management team, hence new efficient management strategies.
- Availability of joint ventures which can help the company to expand its market
- Opportunity to reduce its prices or offer more discounts on its consumers to increase sales turnover.
- Opportunity to win the market from other competitors who have a small financial capability as compared to them.
Threats
- Competition from other retailers, especially in providing food, grocery, or pharmaceuticals.
- Slow growth of the Canadian food market in recent past years.
- Threat from foreign investors who have a high financial capability.
- Possibility of companies under Loblaw to disengage from the joint company. E.g., Walmart