Finally, we have over 139,000 colleagues in stores, distribution centres and store support centres who are eager for Loblaw to succeed.
A number of key actions taken in 2006 will make an important contribution to getting Loblaw back on track:
- Labour Relations – Loblaw was able to reach a new four-year collective agreement with members of Ontario locals of the United Food and Commercial Workers union in 2006, ensuring stability and providing increased operating efficiencies on a store by store basis.
- Store Closures – As part of a review of store operations, management approved a plan to close underperforming stores.
- Inventory Liquidation – The Company managed inventory levels down to more desirable levels in store backrooms, outside storage as well as in distribution centres. Some success was realized in late 2006 from focused clearance pricing as well as the initiation of a liquidation process for selected general merchandise inventory.
Our plan to Simplify, Innovate, Grow will begin to hit its stride from mid-2007 onwards.
Simplify
Operating a less complicated business is the first crucial step on our journey and it requires a new structure.
Following a thorough review of retail and merchandising functions and processes across the Company, Loblaw took the difficult but necessary decision in January 2007, to eliminate 800 to 1,000 positions in the National Head Office and Store Support Centre and regional offices – but without affecting staffing at store level.
We have started to simplify Loblaw by defining roles more clearly, making individual managers more accountable for performance, and eliminating duplication between the national store support centre and the regions. We are centralizing where centralization counts, such as in purchasing, so that we leverage our national scale advantage. Project Simplify entails centralizing the merchandising and marketing functions, implementing agile, execution-focused store operation functions and creating and designing new business processes to support the new structure.
We have grown control labels in Canada, including President’s Choice, no name and Joe Fresh Style, so that they are now independently strong brands – and growing.
