Canadian supermarket retailer Loblaw Companies missed third-quarter revenue estimates on Wednesday, hurt by a slowdown in the demand for its non-essential goods such as household items and electronics.
Consumers have been holding back on discretionary spending as prices remain relatively high despite inflationary trends declining, hurting demand for higher-end brands offered by retailers such as Loblaw.
However, demand for value deals has helped Loblaw’s discount banners such as No Frills and Maxi.
“Drug front store sales reflected continued strength in the beauty category but were pressured by the Company’s exit from certain low margin electronics categories and lower customer spend on convenience items,” the company said.
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Same-store sales in the food retail segment grew 0.5% in the third quarter, compared with 4.5% a year ago.
The company’s quarterly revenue rose to C$18.54 billion ($13.28 billion) from C$18.27 billion a year earlier, compared with analysts’ average estimates of C$18.65 billion, according to data compiled by LSEG.
Loblaw’s adjusted earnings per share was C$2.50 in the third quarter, topping expectations of C$2.45.
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