The ratings on Loblaw Companies Ltd. (Loblaw) reflect its leading Canadian market position, consistent strength in financial results, a high-quality store portfolio that has benefited from a very aggressive capital program, and a powerful controlled label program. These factors are offset by leverage that is high for the current ratings category, somewhat limited growth potential in Canada, and a long-term threat to profitability posed by the continued expansion of Wal-Mart Stores Inc. into Canada. Loblaw's above-average business risk profile reflects its leading regional market shares, as well as its scale. Fiscal 2003 sales of C$25.2 billion are sizable by North American standards and more than double those of the company's nearest national competitor, Sobeys Inc. Loblaw operates a multiple-banner portfolio
