Loblaw prepared for Target's entry into the Canadian retail market in 2013, says chain's president; company plans to bolster core food offerings, strengthen its financial arm, improve customer service, move into e-commerce, focus on smaller store format

LOS ANGELES , February 28, 2012 () – On Feb. 28, Loblaw Cos. Ltd. President Vicente Trius told reporters that the retail chain was ready for Target Corp.’s upcoming entry into the Canadian retail market in 2013, The Globe and Mail reported Feb. 28.

“Let them come,” Trius said, “Let them taste it.”

Trius said that, over the next several years, the company intended to bolster its core food offerings, improve customer service and strengthen its PC Financial arm.

In 2013, Loblaw could potentially introduce a new loyalty card, Trius added.

The company plans to enter the e-commerce market by 2013 with its Joe Fresh Style apparel, Trius said.

Trius said that the company will focus on a smaller store format rather than the giant superstores that it build roughly a decade ago, and may even unveil some new store formats eventually. Loblaw is hoping that its multi-format stores—which include a combination of small, large, conventional and discount—will help it ward off the competition.

In 2013, Trius pledged that the company’s annual margin of earnings before interest, taxes, depreciation and amortization (EBITDA margin) will rise from 6.7% year-over-year to 7% or more.

Trius indicated that Loblaw intends to introduce more products aimed at new Canadians, who are projected to spend C$1 out of every $3 spent on new food sales growth

Over the next several years, Loblaw will build more standalone Joe Fresh stores and expand the fashion brand globally. In the fall of 2011, Joe Fresh opened its first store in New York City. Currently, there are five stores in the New York area, Trius added.

Loblaw’s goal is for its Joe Fresh fashion division to eventually reach $1 billion in annual sales.

During the week of Feb. 20, Loblaw issued a profit warning for 2012. The warning had been prompted by heavy expenditures on revamping stores and improving efficiency.

Loblaw Executive Chairman Galen Weston, said that Loblaw will need to spend $40 million on improving Loblaw’s customer service and product promotions. The company will need to spend an additional $70 million on improving its supply chain and information technology services.

The primary source of this article is The Globe and Mail, Toronto, Ontario, on Feb. 28, 2012.

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