Loblaw plans $1 billion enterprise growth investment

Canadian supermarket and pharmacy retailer Loblaw Companies intends to expand in areas including real estate, e-commerce, IT and supply chain during 2016.

Loblaw has announced it will invest approximately $1 billion into its Canadian retail business this year. Another $300 million will be invested by Choice Properties REIT, a Canadian developer of grocery-anchored shopping centers with Loblaw as its principal tenant. The investment includes construction projects for approximately 50 new stores and 150 renovations to existing stores, increased e-commerce expansion, and IT infrastructure and supply chain projects.

In addition, Choice Properties REIT expects to invest in the growth, development and quality of its retail real estate portfolio, which includes the construction of approximately 730,000-sq.-ft. of gross leasable area.

This investment is expected to create nearly 20,000 jobs through store staffing and construction. Loblaw, which operates several grocery banners as well as the Shoppers Drug Mart pharmacy banner, has not specified how the new stores will be branded or where they will be located.

"We continue to invest in our business in ways that matter for the Canadian economy and the millions of Canadians who shop with us each week," said Galen G. Weston, executive chairman and president, Loblaw Companies Ltd. "Our investment will create local jobs and bring nutrition and wellness solutions closer to home.”

In July 2015, Loblaw said it would close 52 unprofitable stores during 2016. While there is no indication the planned investment would alter those plans, the company did post a 6.5% increase in revenue during its recently completed fiscal 2015, even though there was one fewer week than the previous fiscal year. Loblaw has also been expanding its omnichannel click-and-collect offering.