Loblaw to cut 700 head office, admin jobs

Canada’s largest food retail company, citing long-term planning for efficiency, plans to eliminate about 700 management and administrative jobs, most notably at its head office.

Loblaw Companies said Tuesday its changes take effect starting that day and should be complete in the next three weeks, for an estimated one-time fourth-quarter charge of about $60 million on its ledger.

"We’re managing costs where it makes sense by reducing administrative expense. We will continue to invest in driving the business forward by devoting more resources to enhance the customer proposition," Loblaw president Vicente Trius said in a release.

Improving the "customer proposition" refers to investments in "value, assortment and service," the company said.

The cost cuts, Trius said, are part of "a strategic plan to make Loblaw stronger as we evolve to address changing customer needs and ensure we have the flexibility to adjust to the demands of the marketplace."

The company, headquartered at Brampton, Ont., noted in the past 12 months it has opened 14 new stores and added over 2,000 new jobs at the retail level.

Loblaw runs 584 corporate and 462 franchised stores across Canada, employing over 135,000 full-time and part-time staff. Its 22 different store banners include Loblaws, Dominion, Provigo, Superstore, Wholesale Club, Zehrs and T+T Supermarket.

For its second quarter ending June 16, the company booked net earnings of $159 million on $7.38 billion in revenue, down from $197 million on $7.28 billion in the year-earlier period.

The company’s Q2 retail operating income was down by $58 million, a decrease it said was "mainly driven by an increase in labour and other operating costs (and) declines in gross profit and foreign exchange gains."

For its full fiscal 2011, Loblaw saw net earnings of $769 million on $31.25 billion in revenue, up from $675 million on $30.84 billion in 2010.

Related story:
Food prices to bite Canada’s grocers: report, April 29, 2008

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