Canada's largest grocer closing stores

Canada's biggest food retailer Loblaw announced it plans to close 52 unprofitable stores over the next year at the same time the company reported lackluster second quarter financial results.

Loblaw Companies has more than 2,300 stores, including Loblaws, Provigo, and Extra Foods. It also owns Shoppers Drug Mart.

"I am pleased with our overall performance in the second quarter, as we continued to execute well against our strategic framework," reported Galen G. Weston , President and Executive Chairman of Loblaw Companies Limited. "Looking ahead, the grocery industry remains highly competitive and healthcare reform continues to put pressure on our pharmacy business. We are well positioned to achieve earnings growth through a stable trading platform, incremental efficiencies, synergies and a stronger balance sheet."

Loblaw said the closures will cut its annual sales by roughly $300 million a year, but will result in a $35 million to $40 million improvement in its operating income.The closures are expected to cost the company approximately $120 million. Of this amount, a charge of $45 million was taken in the second quarter ended June 20, including $30 million for severance and lease termination costs.

Loblaw reporteda second-quarter profit of $185 million, or 45 cents per share, compared with a loss of $456 million or $1.13 a share a year ago. Consolidated sales rose 2.2% to $10.54 billion from the same quarter last year.