Latest news with #JohnZamparo
Yahoo
03-07-2025
- Business
- Yahoo
Canadian grocers bet big on new stores – but can the market keep up?
Canada's largest grocers are ramping up store openings after years of slow growth, but simultaneous expansion across the industry could strain earnings. 'Acceleration across the industry will be problematic,' said John Zamparo, equity research analyst at Scotiabank, in a report. He predicts the move will result in one or more of lower returns on invested capital or margins, lower price-to-earnings multiples, higher lease costs or altered plans. 'It seems highly implausible to us that all five of the major grocers in Canada can concurrently accelerate square footage growth, particularly in a flat/declining population scenario with no downside,' he added. In the first quarter of 2025, Statistics Canada reported that population growth was so small it amounted to 0.0 per cent growth. While major grocers like Loblaw, Empire and Metro are investing in new store openings and renovations to meet shifting consumer preferences for discount and fresh-food formats, flat population growth, and therefore fewer new customers, could limit sales growth. Retail expert Bruce Winder says this likely accounts for the grocers' specific short-term expansion plans. 'They've left quite a bit of room for manoeuvring in subsequent years,' he said. Zamparo expects industry-wide square footage growth won't become topical for at least a few more quarters as projects get underway. Loblaw ( plans to open 80 new stores in 2025 as part of a $10 billion, five-year investment, with about 50 of those being hard discount locations like No Frills. It also plans to renovate over 300 grocery and pharmacy locations. Sobeys' parent Empire ( will add 24 new locations in fiscal 2025, including Farm Boy and FreshCo banners. Metro ( is expanding its discount banners in 2025, with seven new Food Basics stores planned in Ontario—three already open—and five new Super C locations launched in Quebec over the past year, a spokesperson told Yahoo Finance Canada. Both banners are set to continue growing into 2026 with more store openings planned. The company has also added a new Metro store in Ontario and will open a new Adonis specialty store. Metro is consistently renovating existing locations, though not all renovations will result in an increase in store size, the spokesperson says. Walmart Canada (WMT) is investing $6.5 billion to build dozens of new stores and expand its supply chain, starting with five new supercentres in Ontario and Alberta by 2027. Costco (COST), meanwhile, plans to open 27 new warehouses in fiscal 2025, at least two of which will be in Canada. Winder says major Canadian grocers are 'reading the room,' and see that many consumers are value-focused right now, and changing their store mix accordingly. And, since Costco and Walmart have gained greater market share over the past decade, the best way for grocers like Empire, Metro and Loblaw to fight back is through discount channels, he adds. Some of these new formats will also be high-end type grocers, like Farm Boy, adds Matthew Smith, executive vice-president of national retail investment at JLL. Over the past decade, major grocers 'took their foot off the gas' on building traditional suburban grocery stores, Smith says. And then Covid-19 happened, which also slowed expansions, and grocers pivoted to pickup and home delivery options. Now, they're catching up. Currently, there's a big push for grocers to open more traditional grocery stores, and also for developers to build more retail space to meet that demand, he says. However, the biggest challenge will be the cost, Smith says. 'Grocery in general is a margin business so rents can only be so high to make the business sense of operating a grocery store,' he said. And costs for land and construction have all climbed in the last 15 years, Smith says. There's likely more demand from the grocers than there is development going on, and since the grocers can only pay so much, it's going to be a struggle to develop at the pace they need. 'Unfortunately, the only way to be able to afford more rent is if they're making more money, and the only way to make more money is if they're charging more to the consumer,' he said. 'It's a razor's edge in terms of trying to develop these stores at the rents grocers can pay.' One way grocers may get around the high cost of building new stores is by moving into former box stores, while making their own modifications, Smith says, such as a former Bed, Bath and Beyond or Toys R Us. That's opening up new opportunities where they don't have to build a new store at their expense. Expansion in the form of new stores will ultimately lead to greater convenience, he says, adding: "More grocery stores closer to more people is a benefit for everyone." Sign in to access your portfolio
Business Insider
28-06-2025
- Business
- Business Insider
Scotiabank Sticks to Their Buy Rating for Alimentation Couche-Tard Inc (ATD)
Scotiabank analyst John Zamparo maintained a Buy rating on Alimentation Couche-Tard Inc (ATD – Research Report) today and set a price target of C$78.00. The company's shares closed today at C$67.64. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter According to TipRanks, Zamparo is a 2-star analyst with an average return of 0.9% and a 42.45% success rate. Alimentation Couche-Tard Inc has an analyst consensus of Strong Buy, with a price target consensus of C$82.82, a 22.44% upside from current levels. In a report released today, CIBC also maintained a Buy rating on the stock with a C$84.00 price target. Based on Alimentation Couche-Tard Inc's latest earnings release for the quarter ending January 31, the company reported a quarterly revenue of C$20.9 billion and a net profit of C$641.4 million. In comparison, last year the company earned a revenue of C$19.62 billion and had a net profit of C$623.4 million
