Grocery giant Loblaw Cos. Ltd. is going through another round of job cuts as it races to bolster its operations in the face of intensifying competition.
The country’s largest grocer is reducing its staff of about 134,000 full-time and part-time employees by 275 people, mostly management and administration positions, spokesman Bob Chant confirmed on Wednesday morning. Just over 200 of the cuts are from Loblaw’s Brampton, Ont., head office with “minimal impact at the store level.”
The initiatives come as Loblaw fights off low-cost U.S. discount behemoths Wal-Mart Stores Inc., Target Corp. and Costco Wholesale, while incumbents are moving to consolidate with rivals to gain efficiencies.
In July, Loblaw announced its $12.4-billion deal to buy Shoppers Drug Mart Corp., with expected savings of $300-million annually after three years. About a month earlier, Sobeys unveiled its $5.8-billion agreement to acquire Safeway Canada.
Mr. Chant said the latest cuts will take effect over the next few days, and that the savings will be discussed at the end of the financial quarter. Loblaw is scheduled to release its third-quarter results in mid-November.
Vicente Trius, president of Loblaw, has alluded to growing pressure in Canadian grocery aisles as more players operate in the field. “You have all these additional square foot [space] and …you have a consumer who is spending a little bit less,” he told a recent conference. “My gut feel is this is going to level off, but you will have a very competitive environment [for the next eight months].”
Earlier this year, Loblaw said its fourth-quarter profit was down 18 per cent from a year earlier, hurt in part by a restructuring charge related to job cuts it announced late last year. It took a charge of $61-million, or 16 Canadian cents a share, partly tied to 700 head-office jobs it cut last October, as well as costs totalling $19-million or 5 cents a share. The charge also was related to information-technology and supply chain investments.