Loblaw CEO Per Bank says small discount stores are key for winning price-weary shoppers

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Loblaw’s Danish CEO, Per Bank, said small discount stores are among the measures he brought to Canada when he moved to run the retailer about three years ago, arguing they help the company better serve shoppers looking for a quick, value-focused grocery run.

Bank made the comments while sitting in the backroom of a small-scale Toronto No Frills on a brisk October morning, describing how Loblaw’s smaller-format stores dispense with traditional elements such as deli counters, live pizza stations and fresh bakeries. He said that, at the time he took the helm, the company had about 43 small-format stores under 20,000 square feet, and that there are now more than 75 across Canada under an intentional strategy to grow small stores in both urban and rural areas.

Bank said the approach allows Loblaw to expand into smaller communities with as few as 4,000 people where a conventional full-scale grocery may not set up. He also said he expects discount banners to represent more than half of the company’s food business in the years ahead, adding that he did not think that outcome was something anyone had seen prior to his arrival.

Discount banners make up about 40 per cent of Loblaw’s grocery footprint, and Bank said the company is on track for discount banners to outnumber its conventional stores, including Real Canadian Superstore, Loblaws and Fortinos.

The push toward discount comes amid pressure on household budgets from economic shocks that included soaring food inflation after the pandemic, a tariff dispute between the United States and Canada after Donald Trump returned to the White House, and an energy crisis tied to war in the Middle East. Bank said he does not think inflation is “in a great place now,” and when asked about whether Loblaw could again face consumer backlash over prices, he said, “If we will, all will.”

Bank said Loblaw believes it is “in a good place,” adding that it was “quite humble about the challenges” and referencing past controversy including a boycott movement championed by the Reddit group dubbed LoblawIsOutofControl. He said grocers will always face pressure for prices because consumers interact with stores rather than suppliers, and that there will always be some unhappy shoppers.

Consumer well-being researcher Monica LaBarge said Bank took the reins when Loblaw “wasn’t in a good place” and that the work of improving the retailer’s reputation is an “unenviable job.” She pointed to a 2026 Great Canadian Brand Index consumer survey that ranked Loblaw last among 130 brands in Canada and labeled it the “most scrutinized” among all grocers.

LaBarge said Loblaw’s brand image can make it an easy target for consumers compared with other grocers, and she said winning back trust will depend on the balance between shareholders’ desire for returns and how consumers perceive the company. She also said Bank’s job is made harder by a slowing economy and rising geopolitical tensions, including record-high diesel prices linked to war in Iran.

Bank said diesel-related pressures have created fresh challenges for the grocery sector, with suppliers proposing price hikes. He said one of Loblaw’s biggest suppliers came in with a 15 per cent price increase request that Loblaw is pushing back on, and he said, “Who’s going to get the blame? We are.” Bank added that consumers tend to direct their anger at grocers rather than multinational suppliers such as Nestlé, Unilever or P&G.

On trade, Bank said he would like things to “go back where it was before the tariffs,” saying it is “not helpful” to be in the current situation. He also pointed to recent developments involving the United States, Denmark and Greenland: Bank said last month the three signed an agreement about the island’s status that allows Washington to set up its military operations in certain areas, and he said he sees the resolution as a possible sign that other tensions could ease over time.