Loblaw Cos. Ltd., Canada’s leading grocery retailer, is poised for aggressive expansion in 2025 as it continues to innovate with its discount offerings. The company is currently on track to open 50 new stores by the end of the fiscal year, a goal established in February. However, with new strategies and under the guidance of CEO Per Bank, Loblaw aims to exceed this number in 2025, focusing on adding more square footage to meet customer demands.

According to chief financial officer Richard Dufresne, Loblaw is committed to replicating successful business models that resonate with consumers. “If we have the right business model that works and resonates with customers, we just replicate it with new stores and in the long term, we win,” Dufresne stated during an investor call. This strategy reflects the company’s emphasis on understanding customer needs and providing value, especially during a time when many shoppers are seeking lower prices.

To achieve this, Loblaw has implemented several value-driven initiatives. Notably, the supermarket chain has eliminated multi-buy pricing at its No Frills stores and is piloting ultra-discount offerings under the No Name label. The leaders at Loblaw recognize the complexity of these changes, as CEO Bank noted the importance of testing new concepts: “It’s still too early to draw meaningful conclusions. We’re still learning and refining our offer. If it works, we will build more. If not, we will pivot, take the learnings and apply them to our discount program.”

Loblaw’s approach isn’t only about opening new stores; it also includes reshaping its existing inventory. Beginning this week, the retailer is reducing prices on 400 items sold at Shoppers Drug Mart, aiming to stimulate food sales through its pharmacy chain. While this tactic may exert short-term pressure on sales numbers, Bank remains optimistic about the long-term benefits it can generate. The company expects that lowering prices will attract more customers, citing the achievement of its best tonnage growth rate in a decade.

Bank anticipates that the demand for value will persist in the coming years. “That’s also why we are building many of the new, small stores in our hard discount sector, because that resonates so well with our customers,” he said. The hard discount segment has performed well, with Loblaw opening 25 new stores in the third quarter alone, including six small-format No Frills outlets. The company plans to launch 20 new Maxi and No Frills stores in the fourth quarter of this year.

In conjunction with expanding its physical presence, Loblaw is also enhancing its distribution capabilities with a new center expected to come online in early 2025. This facility is crucial for supporting the growing needs of the retailer’s vast network, particularly in light of its e-commerce growth — e-commerce sales witnessed an 18.5% increase this past quarter.

The diversification of Loblaw’s offerings is also evident in the rapid expansion of its T&T supermarket banner, which has been well-received in the Canadian market. Recently, T&T has opened new stores in Brossard, Kanata, and London, with plans to unveil its flagship U.S. store in Bellevue, Washington, in December. The success of T&T stores is reflected in their consistent high, single-digit same-store sales growth, making them a vital cog in Loblaw’s broader strategy.

In the company’s third quarter earnings report, Loblaw noted net earnings of CAD $777 million, marking a 25% increase compared to the same period last year. This positive outcome was aided by a reversal of a previous charge linked to a commodity tax matter, which added CAD $125 million to net earnings. Overall revenues reached CAD $18.54 billion, with retail segment sales recorded at CAD $18.26 billion.

While Loblaw credited food retail same-store sales growth of 0.5%, this figure was notably lower than the 4.5% growth seen last year, attributed largely to the timing of the Thanksgiving holiday. Excluding Thanksgiving, food retail same-store sales rose by 1.3%, indicating underlying strength in consumer demand.

In summary, Loblaw’s ambitious plans for 2025 showcase its commitment to both growth and customer value. By implementing robust discount strategies and expanding its store network, Loblaw aims to establish a more significant presence in the competitive grocery marketplace. With the continued focus on delivering value and navigating consumer preferences, the company is strategically positioned to capture market share in an increasingly price-sensitive retail environment.