Loblaw Companies
Loblaw Companies Limited is a Canadian retailer encompassing corporate and franchise supermarkets operating under 22 regional and market-segment banners, as well as pharmacies, banking and apparel. Loblaw operates a private label program that includes grocery and household items, clothing, baby products, pharmaceuticals, cellular phones, general merchandise and financial services. Loblaw is the largest Canadian food retailer, and [|its brands] include President's Choice, No Name and Joe Fresh. It is controlled by George Weston Limited, a holding company controlled by the Weston family; Galen G. Weston is the chair of the Loblaw board of directors, as well as chair of the board of directors and CEO of Canada-based holding company George Weston.
Most of Loblaw's 220,000 full-time and part-time employees are members of the United Food and Commercial Workers, with the exception of workers at The Real Canadian Wholesale Club in Alberta, who are members of the Christian Labour Association of Canada.
Loblaw's regional food distribution divisions include Westfair Foods Ltd. in Western Canada and Northern Ontario, National Grocers Co. Ltd. in Ontario, Provigo Inc. in Quebec, and Atlantic Wholesalers Ltd. in Atlantic Canada.
History
"We Sell for Less"
In 1919, Toronto grocers Theodore Pringle Loblaw and J. Milton Cork opened the first Loblaw Groceterias store modelled on a new and radically different retail concept, namely "self serve". The traditional grocery store provided a high level of personal service but was a labour-intensive operation. Customers typically had to wait while a clerk fetched items from behind a counter. Other goods, such as sugar and flour, had to be individually weighed and the order was then tallied by hand and added to the customer’s account. Home delivery, by wagon, was usually included free of charge. Loblaw and Cork, friends from the days when both worked as young clerks in the Cork family grocery store, believed they could cut costs by introducing self service combined with cash and carry. While cash stores were not new, the idea of allowing customers to select their own merchandise was a new concept. The pair had heard of the Piggly Wiggly "self-serving store" in the United States and travelled to Memphis, Tennessee, to see it in operation first hand. With customers allowed to browse freely, pick up their own goods and then pay cash at a central checkout counter, with no credit or home delivery, operating costs were reduced. The two came away convinced that a similar style of operation could work in Canada. But Loblaw was met with scepticism:
In the early days when I started the cash and carry business, I was told that it could not be done, but my contention was that the people of Toronto and Ontario would welcome the opportunity to carry their groceries home,
providing I could offer them higher qualities at a much lower price than they were used to paying.
The first Loblaw Groceterias Co. store opened at 2923 Dundas St. W., Toronto, in June 1919. Months later, a second location, at 528 College Street, followed. The ’groceterias’ name was apparently derived from cafeteria – a popular self serve restaurant format. Along with the Loblaw name, the outlets featured big "We Sell For Less" signs across their storefronts. Inside, the stores were clean and well lit, with items neatly displayed and clearly marked:
From the entry, one passes through a turnstile which permits egress only. Just inside are piles of market baskets from which the customer helps himself and proceeds in his quest for food at lower prices. Out in front, the shelves are packed with bottled and canned goods, whose names are household words, all plainly tagged with price. Further back, one finds teas, coffee fancy biscuits and cheese, all wrapped ready to carry home.... The customer having selected her purchases, carries her basket to one of the counters near the point of exit. Here her purchases are quickly totaled on an adding machine and she receives her slip. While she pays the bill her groceries are neatly packed in a larger bag.."
While produce was limited and fresh meats largely excluded from the early stores, sales proved strong. Within its first five months of operation, the chain's second location had expanded its sales room into that part of the store normally reserved for storage. In spite of the success of the new groceteria format, Cork did not feel that traditional, full-service grocery stores were in danger of going out of business since many customers still valued the extension of credit, individual serve and home delivery. A year later, another Toronto grocer, C.B. Shields, joined with Loblaw and Cork.
In addition to being a proponent of self serve, Loblaw was also a firm believer in "the fundamentally sound principle of the chain store system" and its ability to deliver better price and superior quality to through its buying power. Three years after the opening of the first store, there were nine groceterias throughout Toronto. The company had also expanded into the United States with Loblaw Groceterias Inc. outlets in Buffalo, New York.
In 1928, with 69 stores throughout Ontario, the company unveiled its new state-of-the-art head office and warehouse at Fleet and Bathurst streets, along today's Lake Shore Blvd, in Toronto. At a cost of million, the Loblaw warehouse was likened to a "temple of commerce" and hailed as a model of efficiency. One newspaper report described it as, "the most modern warehouse building of its kind in the dominion." The warehouse, which served as a distribution centre and manufacturing depot, included an interior loading dock that could simultaneously accommodate eight railway freight cars and 23 large trucks. It featured its own electric tram railway, four giant ovens for baking a ton of cake and half a ton of cookies a day, huge drums for blending tea, 22 thousand feet of ammonia-filled pipes for refrigeration, and a system of pneumatic tubes for sending messages from department to department. A "punched card" tabulating system, forerunner to today's computer, would be installed for tracking inventory as the first of its kind in the Canadian grocery industry. For Loblaw employees, the warehouse included amenities such as bowling lanes and a billiards room, along with an auditorium for putting on plays. That same year, the American company expanded beyond New York State with the opening of outlets in Chicago, Illinois.
Depression and war
By October 1929, Loblaw Groceterias' rapid expansion had attracted the attention of competitor Dominion Stores Limited, another Toronto-based food store chain. In a letter to its shareholders, Dominion management put forward a plan to purchase a controlling interest in Loblaw, funded by a preferred share offering. Weeks later, though, stock markets around the world collapsed and theproposed acquisition never took place.
In spite of the onset of the Great Depression, Loblaw continued to expand,
albeit at a slower pace. By 1930, the chain boasted of 97 "spotlessly clean
Groceterias" in Ontario. By 1936, that number had grown to 111, but press reports
indicated the company had curtailed further expansion in order to increase
the scope of its product offerings at the chain's existing outlets. Meanwhile, the
company made a partial retreat from the U.S. market with the sale of its 77
Loblaw Groceterias Inc. stores in Chicago, Illinois, to the Jewel Tea
Company. The stores had never shown a profit, although they had largely
been turned around by the time of the sale. The company retained its 50
stores in Buffalo, New York, which were profitable operations.
In 1933, company co-founder Theodore Pringle Loblaw died suddenly of complications from minor surgery. Eulogized as "the Merchant Prince" by the press, Loblaw was remembered not only for his accomplishments in business but also his religious conviction and personal philanthropy that benefited local charities such as the Kiwanis Boys Clubs of Toronto and the Stevenson Memorial Hospital of his hometown of Alliston, Ontario. After Loblaw's death, co-founder John Milton Cork took charge of the company.
During the early 1930s, Loblaw Groceterias began converting many of its outlets to "Market Stores" that featured full-service meat and produce departments for the first time. Previously excluded because of the chain's 'self serve' format and the need to cut meats and weigh produce, the new departments proved popular with customers. By 1936, over half of all Ontario locations had been converted to the new format that expanded sales "without a corresponding increase in store overhead." The company also began updating the appearance of its stores to the new, modern, streamlined look. In terms of branding, while the chain often promoted itself as "Loblaw's" in newspaper ads, it was not until 1939 that the first "Loblaws" signs went up on store facades – replacing the Loblaw Groceterias Co. Limited signage. In addition to the new meat and produce departments, frozen food sections were also featured – a first in Canada. Loblaw also began introducing other modern amenities such as "electronic eye" automatic doors and mechanical ventilation systems for the comfort of shoppers.