Canada's largest food retailer Well-established controlled-label programs Solid financial flexibility with substantial real estate holdings Declining profit margins Weak credit protection measures for the ratings Significant multiyear restructuring program expected to last up to 2012 Increasingly competitive food retailing industry The ratings on Toronto-based Loblaw Companies Ltd. reflect the company's position as the largest grocer in Canada with the leading market share in most regions, well-established controlled-label programs, and satisfactory operating cash flow generation. These strengths are partially offset by weaknesses in the company's supply chain and IT, contracting profitability margins, weak credit protection measures for the ratings, and challenging market conditions. While the ratings on Loblaw and George Weston Ltd. (BBB/Negative/--), which has a 62% equity interest in Loblaw,
