🍁 BEST CANADIAN GROCER investment this decade

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As long as people need to eat, the Canadian grocers will keep making money. But which one was the best investment? What’s the difference between them? What have they been up to all this time?

Although the grocers aren’t the kind of investment that most people think about when looking for ideas, on a defensive level people will always need food and the big grocers will collectively make more money as long as the Canadian population keeps growing.

Especially when just immigration alone brings over 300,000 new permanent residents into Canada every year, which is 1% of the population, we can expect a lot more grocery shoppers over time.

Interestingly, most people would think that there’s not much growth potential in grocers since it’s hard to notice any big changes with your local store, but even with the worst-performing grocer, it was still possible to more than double your investment over the past decade.

Loblaws (L.TO)
They are Canada’s largest grocer and bigger than the size of Metro and Empire combined. They own Shoppers, TNT, No Frills, Real Canadian Super Stores, Value Mart, Provigo, Fortinos banners just to name a few. In their network, they own over 969 stores (half are discount banners), and 1300 Shoppers locations. Loblaws generates roughly $49 billion in annual sales and has 190,000 employees. George Weston Ltd owns more than 50% of the company. The private labels that they own include President’s Choice, No Name, and Life brand. Under their PC Optimum loyalty program, there are more than 3 million people using their MasterCard. That’s ⅓ of the adult population in Canada.

Metro (MRU.TO)
They are Canada’s Quebec-based grocer. They own the Metro, Food Basics, Super C, Premiere Moisson, Marché, Adonis, Brunet, Jean Coutu banners. In terms of Store portfolio, they own 950 stores (25% are discount banner), and 650 drug stores. They generate roughly $17 billion in sales and have 90,000 employees. It’s private label brands are Selections and Irresistibles. In terms of loyalty programs, Metro uses Metro&moi in Quebec, and Airmiles everywhere else.

Empire (EMP-A.TO)
They owns Sobeys and Freshco, Safeway, IGA, Foodland, Thrifty Foods, Lawton's Drug Stores, and Farm boy. They have a total of 1500 store locations of which only 6% are discount format. They generate $26 billion in sales, which is around half of what Loblaws generates, and have 123,000 employees. They have a 41.5% ownership of Crombie REIT, which owns Grocery and Drug store anchored shopping centers and mix-used properties in Canada. As of today, Crombie represents 10% of Empire’s value on the stock market. They have a major ownership in Genstar, which is a property developer with operations in Canada and the US.

Walmart Canada (WMT)
It was established in 1994 from the acquisition of 122 store leases held by Woolco, who was struggling to survive at the time. Walmart retained 16K of their employees, many who were the reason why Walmart expanded very successfully in Canada. Walmart Canada only represents 3.5% of Walmart’s total existing stores. The landlord for Walmart Canada locations are usually SmartCentres, Riocan or First Capital. There are 408 Walmart stores in Canada (15% are discount format). Walmart Canada generates roughly $24 billion in sales, that’s roughly half of what Loblaws generates in sales, and over 91,000 employees, which is similar to Metro.

Costco Canada (COST)
The first Costco location in Canada was in British Columbia back in 1985. The company has over 10 million members across Canada. That’s ⅓ of the Canadian adult population. During the first 8 years of operations in Canada, it’s members needed to be business owners or work for the government to be eligible for membership. This requirement was removed in 1993. It’s private label is the Kirkland Signature brand. They have 100 locations in Canada (which is 13% of their stores around the world). They generate over $25 billion in sales in Canada, which is around half of what Loblaws generates, and have over 39,000 employees, which is only 20% of what Loblaws hires. Costco Canada has roughly 4000 products compared to roughly the 30,000 products found at most supermarkets. Costco has a distinct rule that no item it sells can be priced over 14% above it’s cost

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Very well made video, covered a ton of information in a clear and concise way. I'm looking into Canadian grocers as a defensive/inflation hedge and this had exactly what I'm looking for. Subscribed!

harkatron

If I were American - Costco - is a superb holding /
But being Canadian - i like to benefit from the Canadian dividend tax credit and so - Metro - seems to be the best choice - this was an excellent video - thank you 😊

shirleycrosner

Your vids are amazing man you have a real talent for breaking things down in a logical and easy to follow way 👌

mikhailaquinn

Loblaws has been on my radar for a while. Now it is down to $62, i think it might be a great time to buy. I see it going up close to $70 in a year and their dividends aren't to shabby. Lets see how it does!

lucdo

So happy I found this video! I think with the second wave, grocery stores are worth investing into my portfolio

RyanThomasWoods

Newly subscribed....keep up the good work....just a suggestion....while talking about the stock also mention the tickers of each...👍👍👍

twitchellmartis

Great video/breakdown. You're gonna get a lot more subscribers if you keep producing quality content like this

NorseAztec

well done video. I watch a lot of these....so ya well done.

rogersfamily

great video again. didnt know a lot of the Quebec side and how much sales they were doing

mynameisjeujeu

Holly molly, that's impressive. This almost what me to sell vfv to only by Metro from now own. But, I dont think the stock will be SP500 index every year for 40 years.

mr.xernorus