Galen Weston is stepping back from day-to-day operations of Loblaw Companies Ltd. in a senior leadership shuffle that will see a European retail executive take over as president and CEO.
Canada’s largest grocer and drugstore chain said Tuesday the chief executive of Denmark’s leading grocery retailer Salling Group A/S, Per Bank, will join the company in early 2024.
The hiring will see Weston step aside from the president role, which he took on in 2021 when Sarah Davis retired from the job. He will remain chairman of Loblaw and chairman and CEO of holding company George Weston Ltd.
“I’m not leaving. I’m stepping back into what I consider to be my natural role as the controlling shareholder,” Weston said during a call with analysts.
“The takeaway here is this is not a sharp left turn,” he said. “This is about evolution and building on the platform that’s been established.”
Weston took on the role of president just as Canada entered a sustained period of high inflation. Food costs have risen at the fastest rate in decades.
Higher grocery prices have largely been attributed to supply chain disruptions, extreme weather, soaring input costs and Russia’s invasion of Ukraine. But some Canadians have questioned whether competition factors or so-called greedflation by grocers have also played a role.
It’s an accusation most often levelled at Loblaw, as the country’s biggest operator, and more specifically at Weston.
Industry experts have noted that while the claims may be unfounded, having the 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 worked his way up through the retail sector ranks over the last 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 more than century-old Salling Group, which operates department stores, supermarkets and discount stores.
Under his tenure, the company has grown its market share by more than 20 per cent, Loblaw said.
“We needed somebody who had deep retail knowledge, retail pedigree and retail excellence,” Weston said. “That’s what we built the success of Loblaw’s performance over the last few years on, and (Bank) rang the bell in every way on that.”
The global search for a new president and CEO was launched last August, which resulted in a shortlist of five candidates, he said.
“We took our time with this process … and (Bank) was the clear standout,” Weston said, noting that the parallels between Loblaw and Salling Group are “quite remarkable.”
“He has extensive experience working for a controlling family, and understands what that relationship needs to be in order for a partnership to be successful,” he said.
“He has been leading an organization that has an outsized cultural and financial place inside his country and that’s the case for Loblaw,” Weston said. “We’re a big company in a small country.”
RBC Dominion Securities Inc. analyst Irene Nattel said Bank is “a strong operator with a deep background in multi-channel food retail across geographies.”
“Bank will be taking the helm of a Loblaw enjoying strong momentum and results, well-positioned against the backdrop of high prices and value-seeking, cash-squeezed consumers,” she said.
Meanwhile, Loblaw chief operating officer Robert Sawyer — who came out of retirement to take on the role in 2021 — plans to retire at the end of the year.
Sawyer worked for grocer Metro Inc. for more than 30 years, including in the role of executive vice-president and chief operating officer, before becoming president and chief executive of Quebec-based home improvement retailer Rona in 2013.
“With Robert’s deserved retirement approaching, his shoes were always going to be hard to fill,” Loblaw chief financial officer Richard Dufresne told analysts.
“However, having spent some time with (Bank), it’s clear that he is a seasoned grocery retailer with a broad and deep skill set, much like a slightly younger version of Robert.”
Weston added: ”If you could find a Robert Sawyer who was 55, that would be an ideal combination for us and here with (Bank) we think we found that.”
—Brett Bundale, The Canadian Press
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