Loblaw Companies Limited saw an increase in retail segment sales in its second quarter, but the results reflect the continuing impact of the pandemic with food retail and e-commerce sales seeing slight declines and drug retail sales increasing.
Food retail same-store sales saw a slight decline of 0.1 per cent while drug retail (Shoppers Drug Mart) same-store sales grew 9.6 per cent, same-store sales in the segment increased 17.2 per cent and front same-store sales increased 3.6 per cent. E-commerce sales declined by 0.5 per cent when compared to 2020, which saw a 280 per cent surge, reflecting the ongoing shift in consumer shopping behaviours.
Revenue climbed 4.5 per cent to $12,491 million when compared to the same quarter in 2020 and retail segment sales reached $12,282 million, a 4.4 per cent increase to the second quarter 2020.
"In the second quarter, Loblaw delivered strong financial performance while lapping the heightened sales and significant COVID-related costs experienced at the beginning of the pandemic," says Galen G. Weston, president and chairman, Loblaw Companies Limited. "We maintained our focus on delivering value and quality to Canadians while providing a safe shopping experience, and are well-positioned to meet the evolving needs of customers as the pandemic restrictions begin to lift."
Grocery demand continued to benefit from elevated eat-at-home trends in the quarter. Across Loblaw's grocery stores, it continued to deliver what it calls “superior value” through its unmatched network of stores and online pick-up or delivery options, reflected by recorded volume share gains in the second quarter, continuing its positive momentum in the grocery business.
The drug store division continued to see variability in its prescription business and reduced consumer demand for high-value items like cosmetics in its front-store business due to lockdowns. Loblaw says it has experienced higher food and convenience sales during the pandemic, with muted acute-prescription and beauty sales. This trend is showing signs of rebalancing as economies re-open across Canada. With a heightened focus on its core retail businesses, including improved promotional effectiveness and cost control, Loblaw delivered another quarter of operational and financial improvements.
Loblaw says it expects grocery sales to remain elevated due to the continued impact of the pandemic and states that core retail segment earnings will grow faster than sales.
The company also plans to invest $1.2 billion in capital expenditures.