Galen Weston - Retrenchment

Retrenchment

In 2006, Loblaw recorded its first loss in almost two decades as a program to centralize administrative functions and consolidate warehouse operations resulted in chronic supply chains problems and customer complaints of empty shelves. Costs from integrating Provigo stores in Quebec and the unprofitable introduction of general merchandise in Ontario added to losses. In September, Loblaw President John Lederer and Chairman W. Galen Weston resigned. Galen G. Weston, Weston's son, became the new Executive Chairman with Allen Leighton appointed Deputy Chairman and later President. W. Galen Weston retained the post of Chairman and President of parent George Weston Limited. With the introduction of a ‘fix the basics’ program, designed to re-focus on food retailing, and a drive to resolve logistical problems, Loblaw returned to profitability in 2007.

In 2008, several major assets were sold, namely Neilson Dairy to Saputo for (CAN) $465 million and George Weston Bakeries and Stroehmann Bakeries in the United States to Mexican conglomerate Grupo Bimbo for (US) $2.5 billion. W. Galen Weston noted the sale of the American assets represented the company’s biggest deal ever and that these transactions left Weston and Loblaw with a combined $5 billion in cash to for future acquisitions. In 2009, Loblaw acquired T&T Supermarkets, a chain of Chinese grocery stores with operations in British Columbia and Ontario.