Loblaw

Nearly

200,000

employees

More than 18 million

PC OptimumTM members

3 million

PC Financial® Mastercard® cardholders

“We believe this imperative is a key ingredient in Loblaw’s corporate culture. Loblaw is not afraid to experiment, is not slow to take action, but prides itself on above average execution. Let’s face it identifying potential opportunities, or strategies is not that difficult - what typically separates winners from losers is timely excellence in execution. Loblaw has had a long history of successfully applying/adapting industry developments for the Canadian market/consumer. At Loblaw we continue to observe several key behaviours that fuel success i) constant experimentation ii) avoidance of the “not invented here” syndrome iii) excellence of execution – timely and typically very well done. Examples are PC financial, Club Pack, the PC general merchandise program, No Frills- dollar store test.” James Durren, analyst, NBF, Oct 2003

1 Continued focus on administrative cost controls and operating efficiencies, including a focus on controlling retail shrink and retail labor management

2 Have an efficient supply chain

“Loblaw raised the bar on this commitment over the past year. Loblaw intends to re-invest every additional dollar of cost reduction into lower prices to drive sustainable value and sales growth. Some examples are i) Private label margin re-invested into lower national brand prices ii) matching Wal-Mart on like items iii) Ontario labour cost reductions in the general merchandise category will likely be used to reduce prices.” James Durren, analyst, NBF, Oct 2003.

“Slow-moving warehouse: One initiative was the creation of a slow-moving warehouse. The concept was a simple, yet powerful way to use warehouse space more efficiently. Loblaw in Ontario used 7 warehouse distribution points. Traditionally, each warehouse held a full range of products for the geographic area that it covered. Within any given warehouse there were fast-moving items such as Tide and slow-moving items such as ant traps. The problem was that slow-moving items took up significant amounts of space and the low turnover meant that cash was held in inventory longer. Loblaw’s solution to this problem was to create a "Slow-Moving Warehouse" where the traditional slow-moving goods would be consolidated. This solution not only freed up space in existing warehouses but because all stores were sourcing the slow-moving items from a single point; the inventory turn rate increased and cash tied up in inventory dropped significantly.” HBR, Oct 1995