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10 In the West, 100,000 sq. ft. superstores with 35 percent nonfood items are very successful. In Ontario and Atlantic Canada, the
emphasis is on stores in the range of 50,000 – 80,000 sq. ft.
Loblaw Companies Limited 1997 Annual Report p. 6.
The complexity of category management is illustrated by the fact that there are 150 categories within dairy and frozen foods alone.
For example, “cheese” is one category in that group.
First Marathon Securities Ltd. Loblaw Companies – Company Report, July 22, 1997. 7 n KPMG/University of Illinois
Business Measurement Case Development and Research Program July 1999o tripled in 1997 as a percentage of total supermarket industry sales. In addition, Loblaw has
introduced restaurants (owned by a third party) into some of its Toronto stores.
Loblaw is a strong competitor because
it can respond quickly to consumer
spending patterns by aligning store
banners and formats to changing
range of banners (shown in Box 3)
partly reflects the process of growth
strategically uses its banners to serve
various segments of the market and to
target different consumer categories.
For example, the “No Frills” banner is
a low price, modest-sized option.
“Loblaws” is a larger, competitively
priced format with a greater range of
items in a more up-scale setting.
These different banners and formats
(i.e., size of store, range of products,
and combination of price/service) are
used in different neighborhoods. As
the neighborhoods change, so do the
banners and formats. The ability to
switch banners and alter formats is
provided by the long-standing
preference within Loblaw for owning,
rather than leasing, its real estate sites. Box 3
Banners of Loblaw Companies Ltd ™
Western Canada Total Eastern Canada Total Retail
The Real Canadian
The Real Canadian
Wholesale Club Stores
Zehrs Food Plus
The Super Centre
18 Extra Foods 19
Shop Easy Foods
Lucky Dollar Foods 64
206 Super Valu
Extra Foods 37
61 Competitive Pricing
The ability to reduce distribution costs is critical in the grocery industry because distribution,
shipping, and storage costs can be as high as 20 percent of the value of products.14 Loblaw has
been successful in improving its distribution and warehousing productivity. In the East,
productivity has improved for five consecutive years. Distribution flows are now almost double
the volume achieved ten years ago using the same warehouse space.
Current projects at Loblaw include “cross docking;” where goods delivered to warehouses are
immediately configured into store deliveries and loaded onto store trucks the same day, and
“flow-through;” where store orders are pre-configured by suppliers. Loblaw is testing the use of
three-temperature trucks to combine shipment of groce...
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This note was uploaded on 01/27/2014 for the course ACCY 405 taught by Professor Staff during the Fall '08 term at University of Illinois, Urbana Champaign.
- Fall '08