I owned Loblaws (TSX: L) at one point earlier this year but sold the entire position at a small loss last spring. I had no idea that the troubles at Canada’s largest grocer would worsen and sold simply to increase our exposure to bonds, which was far less than target.
Earlier this year, it was easy to see that Loblaws was in trouble because of empty shelves and high-priced wilted produce. At a store near our home, they even regularly ran out of staples like brown sugar. When I gently mentioned to the girl at the checkout counter that a grocery store should always have basic necessities, she replied that many customers have been saying the same thing and could I please let the store manager know. I did, but got the impression that the manager was annoyed by the complaint and didn’t once promise to look into the issue.
From my recent experience, it seems that Loblaws is a long way from fixing its problems. Yesterday, I dropped into a store near work around lunchtime. The bakery section carried bread that is three days old though I managed to find one loaf that was only one day old. Unfortunately I also purchased an item from the deli counter that had a “best before” date a full two weeks earlier!
Sadly, I will continue to shop at Loblaws because they are the only ones that carry the Jamaican-style ginger beer that I’m addicted to. But I am not at all surprised that the stock has fallen off a cliff and is currently at multi-year lows.
Do you shop at Loblaws? Do you see any evidence that they are starting to fix their problems?