Loblaw Companies Limited (TSX:L) is Canada's largest grocery retailer which has had a very interesting end to 2017 and beginning of 2018. The company recently announced it had been overcharging customers for years on bread products sold under a range of brands in a price-fixing scheme which cost Canadians considerably, leading to a of nearly 2% since the beginning of the year.
As part of an initiative to regain the public's trust in the company, Loblaw recently started a program offering customers who had purchased bread at a Loblaw location a $25 gift card redeemable at any Loblaw owned location.
This program has been widely covered of late, with shoppers able to see all the details by visiting the website www.loblawcard.ca.
With a number of other headwinds playing into the negative sentiment surrounding Loblaw of late, including long-term threats from e-commerce and deflationary pressures on food prices, Loblaw has seen its valuation multiple decline in the midst of what has been relatively solid growth for the grocery retailer.
With marijuana set to be legalized mid-2018, and the company's Shoppers Drug Mart division set to potentially ride the wave of marijuana legalization higher, depending on how various Canadian provinces decide to roll out marijuana, Loblaw could see a number of near-term catalysts turn the majority of negative press into positive press in the near-term.
Given the current uncertainty with respect to the grocery retail landscape, however, I will remain on the sidelines.
Invest wisely, my friends.
