Executive Summary

• In 2Q19, ended June 15, Loblaw reported a meaningful weakening of comparable sales growth in its food segment. Food retail comp growth of 0.6% compared to 2.0% in the prior quarter and was well below company-measured food-price inflation of 3.6%.
• Drug retail comp growth strengthened to 4.0% in 2Q19, from 2.2% in the prior quarter.
• Management maintained FY19 guidance for positive same-store sales and a stable gross margin in the retail segment.