The ratings on Loblaw Companies Ltd. (Loblaw Companies) reflect the company's leading market position in Canadian food retailing, a consistently strong operating performance, a well-regarded and innovative controlled-label program, and an asset base that consists of modern stores that have benefited from the company's traditionally heavy capital expenditure program. These factors are offset by leverage that is high for the current ratings category, somewhat limited organic growth potential given the company's scale, and an increased emphasis on general merchandise offerings that is not without risk. With C$21.5 billion in 2001 revenues, the company is large by global food-retailing standards, and this scale allows for important purchasing economies. The company's fiscal 2001 (year ended Dec. 31) 7.5% operating margin is the
