CORRECTED-UPDATE 1-Canadian grocer Loblaw to close 52 unprofitable stores
(Corrects title of Karabus in paragraph 6)
July 23 (Reuters) - Loblaw Cos Ltd, Canada's largest food retailer, said it would close 52 unprofitable stores following a review of its 2,300 grocery and other locations launched last year.
Loblaw's shares rose as much as 4 percent to C$70.42 on the Toronto Stock Exchange on Thursday after the company also reported a slightly better-than-expected profit on cost savings from its acquisition of Shoppers Drug Mart in 2014.
Despite the closures, Loblaw will increase its network this year, President and Executive Chairman Galen Weston said on a post-earnings call.
Apart from its namesake stores, Loblaw's banners include No Frills and Wholesale Club as well as Shoppers Drug Mart.
Loblaw said in March it would invest more than C$1.2 billion ($920 million) in Canada this year to open more than 50 stores and renovate more than 100.
"It's better to cut your losses and move on, and I suspect that's what they've done," said Antony Karabus, chief executive officer at HRC Advisory.
Loblaw is facing increasing competition in its grocery business from Wal-Mart Stores Inc as well from as domestic rivals such as Sobeys Inc, owned by Empire Co Ltd, and Metro Inc.
Its pharmacy business has also been hurt by price-controls imposed on generic drugs, aimed at cutting costs for government and private health programs. Continued...