Market News

Loblaw Profit Quadruples

Loblaw Cos. Ltd. said fourth-quarter profit more than quadrupled because higher sales and restructuring expenses were lower than the company expected. Net income climbed to $188 million from $40 million a year earlier, the company said in a statement. In other news, while speculation that George Weston Ltd. will take Loblaw Cos. Ltd. private appears to have subsided, the supermarket chain could do well in an era of belt-tightening despite ongoing restructuring, analysts said. "We think Lobaw is the best-positioned Canadian grocer in this challenging economic environment due to its large discount store network and best-in-class private label offering, including the No 'Name' brand," said analyst David Hartley of BMO Capital Markets. Analyst Winston Lee of Credit Suisse, agreed that value pricing will be key in the months ahead as consumers trade down to less expensive goo! ds. But "general merchandise trends at Loblaw are likely to still weaken," and while it has the "strongest platform" of the grocery players "a growing Wal-Mart threat and organizational transition issues keeps us on the sidelines." http://www.bloomberg.com/apps/news?pid=20601082&sid=aeNknK7ALDno&refer=canada Source: Canadian Grocer E-Newsletter, February 20, 2009