Galen Weston will step down from the day-to-day operations of Loblaw Companies Ltd. in a senior leadership reshuffle, with the European retail executive taking over as President and Chief Executive Officer.
Canada’s largest grocer and drugstore chain said Tuesday that Per Bank, chief executive of Denmark’s leading grocery retailer Salling Group A/S, will join the company in early 2024.
The hiring will see Weston step down as president, a role he will assume in 2021 following the retirement of Sarah Davis. He will continue as Chairman of Loblaw and Chairman and Chief Executive Officer of George Weston Ltd., the holding company.
“I’m not leaving. I’m stepping back into what I think is my natural role as a controlling shareholder,” Weston said on a conference call with analysts.
“The point here is that it’s not a sharp turn,” he said. “It’s about growing and building on an already established platform.”
Weston became president just as Canada was entering a period of persistently high inflation. Food costs are rising at the fastest rate in decades.
The increase in grocery prices was largely attributed to supply chain disruptions, extreme weather, soaring input costs and the Russian invasion of Ukraine. But some Canadians have questioned whether competitive factors or the grocers’ alleged inflation of greed also played a role.
Such allegations are most often made against Loblaw, the country’s largest operator, and more specifically against Weston.
Industry experts point out that while the claims may be unfounded, having a wealthy scion of a powerful family empire as the face of the grocer — as some Canadians struggle to buy food — is part of the perception problem.
Meanwhile, Bank has climbed the ranks through the retail industry over the past three decades.
He started in supply chain operations and eventually became CEO of Scandinavian retail chain Coop Norden.
In 2012, Bank became the fourth CEO of the century-old Salling Group, which operates department stores, supermarkets and discounters.
During his tenure, the company has grown its market share by more than 20%, Loblaw said.
“We need someone with deep retail knowledge, retail pedigree and retail excellence,” Weston said. “That’s what we’ve built on to build the success of Loblaw’s performance over the past few years, and (Bank) has sounded the alarm on all fronts.”
A global search for a new president and chief executive officer launched last August and resulted in a shortlist of five candidates, he said.
“We spent a lot of time in the process … (Bank) clearly stood out,” said Weston, noting that the similarities between Loblaw and Salling Group were “remarkable.”
“He has a lot of experience working for a controlling family and understands what it takes in that relationship to make the partnership a success,” he said.
“He’s been leading an organization that has outsized cultural and financial standing in his country, which is the case with Loblaw,” Weston said. “We are a big company in a small country.”
RBC Dominion Securities Inc. analyst Irene Nattel said the bank is “a strong operator with a strong background in multi-channel food retailing across geographies.”
“Bank will take the helm of Loblaw, which has strong momentum and results and is well positioned against a backdrop of high prices and value-seeking, cash-strapped consumers,” she said.
Meanwhile, Loblaw chief operating officer Robert Sawyer is scheduled to retire at the end of the year, and he will take over the role when he retires in 2021.
Sawyer spent more than 30 years at grocer Metro Inc., including serving as executive vice president and chief operating officer, before becoming president and CEO of Quebec home improvement retailer Rona in 2013.
“As Robert’s much-deserved retirement looms, his shoes are always going to be hard to fill,” Loblaw Chief Financial Officer Richard Dufresne told analysts.
“However, after spending some time with (Bank), it became clear that he was an experienced grocery retailer with a broad and deep skill set, much like a younger version of Robert.”
“If you could find Robert Sawyer, 55, that would be an ideal combination for us and we think we’ve found (Bank),” Weston added.
—Brett Bondell, Canadian Press