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Lob Law Case

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1) The Canadian grocery retail industry is a very competitive market with very low margins. Although is grew at an impressive 4% still the Canadians paid the lowest food prices in the world. This was made possible by a stiff competition within the industry, which forced the retailers to keep prices low to maintain their competitive edge. It is mentioned in the case that Canadian grocery market is the most advanced grocery market in the world. These factors make this market somewhat less attractive to enter especially for a new entrant.
Loblaw as a retailer was able to maintain a leadership position in this industry by a combination of various activities. It owned majority of real estate of the stores, which gave the company more flexibility as compared to its competitors. They were able to change the setup of the store more frequently to provide a different experience to the consumer as compared to their competitors. They also focused on serving the daily needs of the customer and did it in a flawless fashion. Loblaw used multi-brand approach to maximize its share and invested the cash flow from the business to fuel future growth. This gave them the financial muscle required to capture most of the Canadian grocery market. They worked hard on developing customer loyalty through superior label control program and by developing their in house brands such as president’s choice. They also laid lot of emphasis on improving value proposition to maintain a competitive edge in the minds of the consumer. Several customer loyalty programs were developed to attract consumers. Special discounts were given on everyday items, which became an instant hit among the users. These were the core strength of Loblaw through which they were able to maintain a competitive edge over their competitors. The company also provided financial services under the same roof to increase its

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