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A Loblaws store is seen Monday, March 9, 2015 in Montreal.Ryan Remiorz/The Canadian Press

As an executive at Loblaw Cos. Ltd., Sarah Davis helped steer the company through some of its toughest times. Now she is being rewarded with a promotion to president of Canada's largest grocer and drugstore retailer.

Ms. Davis, 49, becomes the clear second-in-command at the company to Galen G. Weston. He became chief executive officer of Loblaw parent George Weston Ltd. in a wider management shuffle announced Thursday, and is now chairman and CEO of both companies.

Ms. Davis' promotion to Loblaw's president caught the attention of retail industry watchers, as she becomes the most senior woman in the executive ranks of the major grocers in Canada.

Industry insiders describe Ms. Davis as a skilled and intelligent leader in a cutthroat sector that faces mounting pressure from discounters and e-commerce players, including Amazon.com Inc. She is also given credit for helping to integrate Shoppers Drug Mart into Loblaw after a $12.4-billion takeover that closed in 2014.

"She's one of those types that gives off a natural-born-leader aura," said David Kincaid, CEO at retail consultancy Level 5 Strategy, which has advised Loblaw and helped in a leadership training session with Loblaw executives at York University's Schulich School of Business.

"She was very reasoned. She was always very level-headed, not reactionary. She always thought things through."

Still, Ms. Davis will have a full plate. Loblaw will need to focus even more on its high-profile private label lines such as President's Choice as a way to gain an edge in battling Amazon and other low-cost rivals, Mr. Kincaid said.

And it will need to bolster its loyalty programs – PC Plus at Loblaw and Optimum at its Shoppers Drug Mart division – to capitalize on their customer databases and merge them to make them more effective, he said. Ms. Davis will also oversee the expansion of Loblaw's fledgling "click-and-collect" e-commerce business.

And she will need to find ways to iron out the wrinkles in Shoppers' crucial strategy of stocking more food at its stores for urban shoppers, said Kenric Tyghe, retail analyst at Raymond James. Loblaw is still figuring out the right mix of fare to carry at Shoppers, he said. Loblaw acquired the drugstore retailer almost three years ago.

But he said Ms. Davis has been groomed for the president's job and shows strength as both an operator and "a numbers person."

"She knows the business," said Sylvain Charlebois, dean of Dalhousie University's Faculty of Management and a food specialist. "She's very well respected."

But perhaps the biggest win is seeing the first woman take on such a senior position at a grocery retailer in Canada, he said. "It's about time."

Ms. Davis gained experience at Loblaw over the past 10 years in increasingly senior positions, taking on some of its biggest challenges. She joined Loblaw in 2007 and by 2010 was appointed its chief financial officer and, in 2014, chief administrative officer, responsible for strategic direction, supply chain, real estate, information technology and other areas. Previously, she held senior financial positions at Rogers Communications Inc..

She arrived at Loblaw a decade ago when it was suffering from some if its deepest problems after having expanded into more non-grocery categories in more superstores, a strategy that left it with a faltering supply chain, empty shelves and weak financial results.

Loblaw has essentially been fixing the problems over the past decade in a drawn-out project to improve its IT systems, especially introducing SAP back-office software, and turn around its operations. But industry watchers agree that Loblaw is in a much stronger position today – and Ms. Davis was part of that work.

"It certainly gave her a look under the hood of how the grocery company operates," said Jim Danahy, CEO of consultancy CustomerLAB, which has worked with Loblaw. "They've got the tools now and the bumps have been worked out and she oversaw that."

He said Ms. Davis "has the smarts" eventually to be promoted to CEO at Loblaw. "She has proven she can navigate the massive cultural maze that is the Loblaw companies in general. She's come through one of the most difficult periods – the SAP implementation and the integration of Shoppers Drug Mart – as a hero."

Ms. Davis' promotion follows last week's announcement by rival Sobeys Inc., the country's second-largest grocer, that Michael Medline, former CEO of Canadian Tire Corp., is taking on the top position at Sobeys and its parent, Empire Co. Sobeys is mired in its own problems from its takeover of Safeway Canada in late 2013.

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Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 14/03/24 11:59pm EDT.

SymbolName% changeLast
WMT-N
Walmart Inc
+0.3%60.86
L-T
Loblaw CO
-0.53%149.84
WN-T
George Weston Limited
-0.06%180.06
CTC-T
Canadian Tire Corp Ltd
0%250

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