Loblaw Hiring European Retail Executive Per Bank as Company’s Next CEO
Galen Weston is stepping back from day-to-day operations of Loblaw Companies Ltd. in a senior leadership shuffle that will see a European retail executive take over as president and CEO. Canada’s largest grocer and drugstore chain announced that the chief executive of Denmark’s leading grocery retailer Salling Group A/S, Per Bank, will join the company in early 2024.
The hiring will see Weston step aside from the president role, which he took on in 2021 when Sarah Davis retired from the job. He will remain chairman of Loblaw and chairman and CEO of holding company George Weston Ltd.
“I’m not leaving. I’m stepping back into what I consider to be my natural role as the controlling shareholder,” Weston said. “The takeaway here is this is not a sharp left turn,” he said. “This is about evolution and building on the platform that’s been established.”
Per Bank has worked his way up through the retail sector ranks over the last three decades. He started in supply chain operations and eventually became CEO of Scandinavian retail chain Coop Norden.
In 2012, Bank became the fourth CEO of the more than century-old Salling Group, which operates department stores, supermarkets and discount stores. Under his tenure, the company has grown its market share by more than 20%, Loblaw said.
“We needed somebody who had deep retail knowledge, retail pedigree and retail excellence,” Weston said. “That’s what we built the success of Loblaw’s performance over the last few years on, and (Bank) rang the bell in every way on that.”
The global search for a new president and CEO was launched in August 2022, which resulted in a shortlist of five candidates, he said. “We took our time with this process … and (Bank) was the clear standout,” Weston said, noting that the parallels between Loblaw and Salling Group are “quite remarkable.”
“He has extensive experience working for a controlling family, and understands what that relationship needs to be in order for a partnership to be successful,” he said. “He has been leading an organization that has an outsized cultural and financial place inside his country and that’s the case for Loblaw,” Weston said. “We’re a big company in a small country.”
RBC Dominion Securities Inc. analyst Irene Nattel said Bank is “a strong operator with a deep background in multi-channel food retail across geographies… Bank will be taking the helm of a Loblaw enjoying strong momentum and results, well-positioned against the backdrop of high prices and value-seeking, cash-squeezed consumers,” she said.
Meanwhile, Loblaw chief operating officer Robert Sawyer — who came out of retirement to take on the role in 2021 — plans to retire at the end of 2023.
Sawyer worked for grocer Metro Inc. for more than 30 years, including in the role of executive vice-president and chief operating officer, before becoming president and chief executive of Quebec-based home improvement retailer Rona in 2013.
“With Robert’s deserved retirement approaching, his shoes were always going to be hard to fill,” Loblaw chief financial officer Richard Dufresne told analysts. “However, having spent some time with (Bank), it’s clear that he is a seasoned grocery retailer with a broad and deep skill set, much like a slightly younger version of Robert.”
Weston added: “If you could find a Robert Sawyer who was 55, that would be an ideal combination for us and here with (Bank) we think we found that.”
Loblaw to Open 38 New Shoppers Drug Mart and Grocery Store Locations
Loblaw Companies Ltd. announced on April 14 that it would spend $2 billion to expand its business in 2023 and create more than 6,000 new jobs in retail, supply chain, technology and construction in Canada. The Canadian retailer’s investment comes at a time when it is seeing strength in its pharmacy business, as well as a steady demand for groceries amid rising fears of a recession.
Loblaw also expects to use the investment to grow and improve its stores; it said it will open 38 new or relocated stores and renovate or convert nearly 600 others. Two-thirds of the new locations will be Shoppers Drug Mart stores as the company drives toward more pharmacist-led clinics.
Retail analyst Lisa Hutcheson said the scale of the company’s planned renovations — it said it will convert or renovate almost 600 stores — is likely owing in part to hasty changes made to facilitate online orders during the pandemic. “It’s an opportunity for them to refresh that, which was probably quickly put in place, and this is probably (about) properly ensuring its functionality,” said Hutcheson, managing partner at retail consultancy J.C. Williams Group.
Prioritizing discount stores “makes sense” for Loblaw she said, noting that “Dollarama has been really winning market share.” The discount giant said that it plans to open 70 new locations across the country.
And with pharmacists in Ontario now able to prescribe certain common treatments, Hutcheson said she also understands the push to open more drugstores. Shoppers Drug Mart has been a winning business for Loblaw, she added, noting customers often spend on higher-priced food at the locations while waiting for vaccines or prescriptions, paying a premium for that convenience.
Loblaw said 14 new or relocated grocery and drugstore locations are planned for Ontario this year along with renovations to more than 330 existing stores in the province. The company did not disclose specific locations targeted for improvements or store openings. It also plans to open or relocate three stores in Atlantic Canada, three in Quebec and 18 in Western Canada.
“The renovations range from expansions in our fresh hall, to updates to our front end and full refreshes of stores to modernize the look and the experience for customers,” said spokesperson Catherine Thomas in an email. She added that the company is also working on upgrades to increase energy savings and reduce greenhouse-gas emissions through new equipment.