rwsandiego wrote: ↑September 12th, 2023, 10:52 am
wnetmacman wrote: ↑September 12th, 2023, 9:18 am
storewanderer wrote: ↑September 12th, 2023, 9:11 am
I'd love to see Loblaw and its multi format strategy in the US. But I don't see it coming. T&T entry is suspicious but may be a one off thing.
Loblaw has been here. They never enjoyed success on a large scale, only in some places. Just at the time they built up some momentum (The Real Superstore in New Orleans), the largest competitor in one of the two remaining areas bought them out (Schwegmann), killing both companies in the process, and selling the distant division to their largest competitr (Schnucks).
Loblaws has been in the US several times and each time was a failure. While 1932 is 91 years ago, their inability to gain traction in Chicago prompted them to sell their "groceterias" to Jewel Tea Company (which did not have retail stores at the time) and Jewel was born. Undeterred, they bought National in the 1950's and eventually transferred the Buffalo Loblaws and California stores (whose name escapes me) to National. Starved for capital to develop larger stores (as was Loblaws itself in Canada), National went from being the #1 grocery chain to a distant third or fourth in Chicago and lagged behind Kroger and Marsh in Indy, where they were called "Standard." (I don't know where they ranked in their other markets) They finally injected some capital into National. Too little, too late and they sold several divisions (including their largest, Chicago) and ultimately contracted to St Louis and New Orleans. We know what happened next.
wnetmacman wrote: ↑September 12th, 2023, 9:18 am
Suffice it to say I don't feel like they want to be here.
That sounds about right.
The only reason for T&T division of Loblaws to come over is that it will be cheap for them to direct import foods from Asia to the US with US dollars. The exchange rates and everything else from a tariff perspective on Asian import foods into the US allows for great profits which is why we are seeing accelerated, explosive growth of the two leading chains 99 Ranch and H-Mart. It may also allow for them to source some items with American dollars and then export to Canada at a cost savings; my last company would go back and forth between direct sourcing and export to stock Canadian locations. If that's the case, and I'll bet it is, then opening US stores for this concept basically will save them more in the long run than the stores will cost to operate. And they already know how to turn a profit on these stores in high labor cost areas because that's basically all of Canada.
Loblaw/Provigo/Great Canadian and whatever other banners I'm forgetting about are primarily Canadian sourced products, Canadian produce and so forth. Even American brands are made in Canadian plants if you look on the label. Exporting to the US is unprofitable with the combined exchange rate issue and high transportation costs. There are a few notable exceptions such as manufacturers in Mississauga, ON that is a short drive from the US border and you find a lot of private brand foods made there in the US such as many frozen Signature Select items at Albertsons stores. But it would still be very challenging financially to use Canadian dollars for US stores.
So opening those types of stores in the US means needing to start a completely new supply chain, new headquarters, new vendors, new manufacturing, and so forth basically as if they're starting a new grocery chain from scratch... Much easier when you're direct importing.
There is little to no comparison between Loblaws conventional stores and their T&T division because the difference is entirely in the sourcing and importing of product. Nobody should expect Loblaws to install any conventional store anytime soon, and I think this Kroger-Albertsons deal indicates that there really are few opportunities to acquire chains in the US, merge them together etc. The only strategic fit that I could see set sail decades ago; Loblaw would have been a good fit for acquiring Fred Meyer Co. But as we know Kroger bought them and here we are today.
Appreciate the love for Loblaw (especially those dazzling Provigo stores in Montréal - the big superstores not the weird little ones that resemble an IGA). They're not coming here unless there is a drastic and shocking change to the exchange rates, and you do not want to know what your everyday life would be like if that happened... It would be $20 for a twelve pack of Pepsi, $5 for a Hershey bar, $10 for a head of lettuce and such.
