Loblaw CEO sees discount stores growing to more than half of grocery business

TORONTO · Loblaw's discount grocery banners are on track to make up more than half of its food business, the company's chief executive says. Per Bank told Canadian Grocer he has overseen a strategic expansion of small-format stores since taking the helm three years ago. The company had about 43 stores under 20,000 square feet at that time, but today there are more than 75 across the country. Bank said the company now has a clear plan to target both urban and rural communities, including towns with as few as 4,000 people.

"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." Discount banners like No Frills and Maxi currently make up about 40% of Loblaw's grocery footprint. They are designed for a quick shopping experience, lacking deli counters, pizza stations and fresh bakeries found in conventional stores. Bank said this shift toward smaller, discount-focused stores is something he brought from Europe.

The company's continued move into discount comes as household budgets face pressure from economic shocks, including food inflation and geopolitical tensions. Bank said headline inflation hovering around 3% means grocers could again be at the forefront of consumer frustration. "I don't think inflation is in a great place now," Bank said. When asked if Loblaw could bear consumers' wrath over prices again, he replied, "If we will, all will." He added that Loblaw hopes to be in a better position than competitors due to its focus on value.

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Bank believes Loblaw's reputation is "in a good place" despite recent challenges. He referenced meeting with the organizer of the LoblawIsOutofControl Reddit group during the boycott movement, even when advised not to. "We were quite humble about the challenges," Bank said. 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 its image after the bread price-fixing scandal and boycott.

"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 survey that ranked Loblaw last among 130 brands in Canada and labelled it the "most scrutinized" grocer. LaBarge said Loblaw's past behaviour has made it an easy target. "It's compounded and if you need a bad guy, they're an easy bad guy." She said winning back trust depends on shareholder returns and consumer perception, and it will take years.

Bank's job isn't getting easier with a slowing economy and rising geopolitical tensions, LaBarge said. Record-high diesel prices from the war in Iran have led suppliers to propose price hikes. Bank said one of Loblaw's biggest suppliers requested a 15% 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 behind them.

With files from Canadian Grocer