Loblaw CEO says discount stores will soon be more than half its grocery business
Per Bank says the grocer now has over 75 small-format stores and is targeting communities with as few as 4,000 people.
TORONTO · Loblaw Companies Ltd. is accelerating its expansion of small-format discount grocery stores, with its chief executive predicting they will soon make up more than half of its food business. Per Bank, who took the helm of Canada's largest grocery chain three years ago, said the company now has more than 75 stores under 20,000 square feet across the country, up from about 43 when he started. "Now we have a plan to go for the small stores. And it's both urban and it's rural," Bank said in an interview at a Toronto No Frills. He said the strategy opens room to grow in smaller communities with as few as 4,000 people, where a full-scale conventional grocer may not set up shop.
Discount banners like No Frills and Maxi currently make up about 40 per cent of Loblaw's grocery footprint and are on track to outnumber its conventional stores, which include Real Canadian Superstore, Loblaws and Fortinos. In these smaller stores, which carry about 5,000 products, the company has eliminated deli counters, live pizza stations and fresh bakeries to create a quick in-and-out shopping experience. "Not many years ahead, I believe that discount will be more than half of our food business," Bank said. "I don't think that was something anyone had seen prior to my arrival."
The continued move into discount comes as household budgets remain strained. Bank acknowledged that inflation, while lower, is still a concern. "I don't think inflation is in a great place now," he said. When asked if Loblaw could bear consumers' wrath over prices again, Bank said, "If we will, all will." He added that the company is focused on staying competitive through its value offerings. Bank believes Loblaw's reputation is "in a good place" and pointed to his decision to meet with the organizer of the Reddit group LoblawIsOutofControl during a recent boycott movement as an example of being humble about challenges.
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Consumer well-being researcher Monica LaBarge said Bank took over when the company wasn't in a good place and still holds an "unenviable job" trying to improve Loblaw's reputation following the bread price-fixing scandal and boycotts. "While its (brand image) may have recovered a little, Loblaw is still at the bottom of the list in terms of Canadian grocers," said LaBarge, an assistant professor at Queen's University. She cited a 2026 Great Canadian Brand Index consumer survey that ranked Loblaw last among 130 brands in Canada and labelled it the "most scrutinized" among all grocers. LaBarge said Loblaw may have become an easy target for consumers because of its past behaviour, while other grocers have flown under the radar. "It's compounded and if you need a bad guy, they're an easy bad guy," she said. Winning back consumer trust will take years and depends on the interplay between shareholders' desire for returns and consumer perception, she added. Meanwhile, Bank's job isn't getting easier with a slowing economy and rising geopolitical tensions creating new challenges.
Record-high diesel prices stemming from war in the Middle East have led suppliers to propose price hikes. Bank said one of Loblaw's biggest suppliers recently requested a 15 per cent price increase, which the retailer is pushing back on. "This is just something that made me really angry," he said. "Who's going to get the blame? We are." Bank said grocers face consumers' anger over price increases, not the multinational suppliers like Nestlé, Unilever or P&G who are behind them.
With files from The Canadian Press and BNN Bloomberg