The ratings on Loblaw Cos. Ltd. (Loblaw) reflect its leading Canadian market position, consistent operating performance and very strong cash flow generation, a high-quality store portfolio, and a powerful controlled-label program. These factors are partially offset by the company's high leverage for the rating given an aggressive capital expenditure program and a very competitive operating environment in Canadian food retailing, exacerbated by the company's recent supply chain problems. Loblaw's strong business risk profile reflects its leading regional market shares and a high-quality store portfolio. Loblaw's LTM sales of C$27.5 billion are sizable by North American standards and more than double those of its two nearest national competitors, Sobeys Inc. (BBB-/Stable/--) and Metro Inc. (BBB/Stable/--). Loblaw operates a multiple-banner portfolio strategy
