Loblaw revenue up in Q2 despite May boycott calls

Article content

Loblaw Cos. Ltd. reported increased revenue and sales for the second quarter of 2024, indicating little impact from a month-long boycott of its stores in May.

The grocery giant’s revenue grew to $13.9 billion in the quarter ended June 15, a 1.5 per cent year-over-year increase. Its retail segment sales were up 1.4 per cent to almost $13.7 billion from the same period last year.

Article content

Same-store food retail sales went up by 0.2 per cent to $9.65 million, while same-store drug-retail sales increased by 1.5 per cent to $4 million. It said its 5.4 per cent same-store sales growth in pharmacy and health-care services was partially offset by a decline in front-store same-store sales of 2.4 per cent. E-commerce sales increased by 14.2 per cent in the second quarter compared to last year.

“Food retail sales reflected increased customer visits in the quarter, despite lapping very strong sales growth last year,” the retailer said in a press release.

The company’s operating income declined 6.4 per cent to $868 million, including an 11.9 per cent dip in retail operating income to $815 million in the second quarter.

It attributed the decrease primarily to charges related to the settlement of bread price-fixing class actions commenced in 2017, which negatively affected net earnings by $121 million.

Loblaw and parent company George Weston Ltd., which owned wholesaler and distributor Weston Bakeries until 2021, on Thursday announced they had agreed to pay a settlement of $500 million in relation to the nationwide class-action suits. George Weston will pay $247.5 million in cash and Loblaw will pay $252.5 million in both cash and credit previously paid to customers under its loyalty card program.

Article content

The companies had previously admitted their role in a multi-year scheme involving wholesale and retail competitors in the sale of fresh bread products. The companies received immunity from prosecution in exchange for co-operating.

The alleged industry-wide co-ordinated price setting became public in 2017, and in early 2018, the Competition Bureau filed documents in court alleging that at least $1.50 had been artificially baked into the price of a loaf of bread between 2001 and 2016 as a result of the scheme.

“On behalf of the Weston group of companies, we are sorry for the price-fixing behaviour we discovered and self-reported in 2015,” Galen Weston, chief executive of George Weston and chairman of Loblaw, said in a press release. “This behaviour should never have happened.”

• Email: dpaglinawan@postmedia.com

Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.

Share this article in your social network