Loblaw Companies Limited sales, revenue and profit surged in the final two weeks of March because of unprecedented consumer demand and stockpiling. The growth was followed by a ramp-up in spending on protective measures to fight COVID-19.
Revenue in the first quarter 2020 increased almost 11 per cent, reaching $11,800 million compared to the first quarter of 2019, which was $1,141 million. Retail segment sales surged 10.8 per cent. Specifically, food retail same-store sales growth was 9.6 per cent and drug retail same-store sales climbed 10.7 per cent, with pharmacy same-store sales growth of 10.6 per cent and front store same-store sales growth of 10.7 per cent.
"These are unprecedented times and I am incredibly proud of how our colleagues have risen to the challenge of ensuring that Canadians have access to the food and health essentials they need. And we will continue to make significant investments to keep our colleagues and customers safe through the pandemic" says Galen G. Weston, executive chairman, Loblaw Companies Limited. "As we remain focused on long term value creation, and we see signs of fundamental change in consumer behaviour, our conviction around the strategic importance of our leading positions in loyalty, digital retail, and connected healthcare is stronger than ever."
Following the initial surge in March, Loblaw says demand has moderated, with continued strength in essential food categories and pressure on sales in pharmacy and some discretionary areas of the business. The company's response and costs related to COVID-19 have accelerated following the end of the quarter, putting pressure on the business.
In a statement, Loblaw says "uncertainty over the duration and severity of the pandemic make reliable estimates of the second quarter and full-year COVID-19 related impacts on the financial results and operations of the company impossible."
Loblaw, like its competitors, has invested heavily in COVID-19 related measures to protect staff, customers and support vulnerable communities. Loblaw says it will continue to invest in its "strategic initiatives" and has "accelerated some in response to the changing demands of customers."
Specific measures it has taken in the past month:
- Enhancing customer convenience with increased store staff, expanded PC Express e-commerce services and eliminating fees and reducing prices associated with these online services;
- Supporting colleagues in stores and distribution centres with temporary pay premiums and pay protection safeguards;
- Securing operations by increasing store cleaning, hiring security and ambassadors to manage social distancing, introducing new customer protocols, and installing equipment like plexiglass barriers at checkouts and counters; and,
- Providing financial support to communities across the country through large-scale donations to food and wellness programs, and to President's Choice Financial Mastercard customers through new financial hardship programs.