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Veronika Papyrina wrote this case under the supervision of Professor Kenneth G. Hardy solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.
Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of
Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail
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Version: (A) 2009-05-15

In early February of 2007, Loblaw Companies Limited (Loblaw), the market share leader among Canadian supermarket operators, announced that it would write down its earnings by about $900 million. This revaluation was related to the company’s decision to close 19 of its Provigo grocery stores in Quebec in
2007. Retail analysts suggested that poor operations at Provigo stores as well as stiff competition from
Metro Inc. and Sobeys had negatively affected Loblaw’s performance. These analysts also speculated that
Loblaw’s executives had diverted their attention from problems at Provigo because they were concerned with competition from three Wal-Mart Supercenters that had opened in Ontario in the fall of 2006.
“Fundamentally, there is a structural weakness in the profitability of our business in Quebec, and the impairment reflects that,” said Loblaw’s executive…...

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