Canadian grocer Loblaw announced plans to close stores and trim its non-food product offering after cutting its financial outlook yesterday (17 November) when it revealed its third quarter results.

“There is a lot of work to do at this business,” said executive chairman Galen G. Weston, who succeeded his father in September in a management shake-up ending with the departure of former president John Lederer. “We’ll get to where we need to be in approximately three years.”

Despite posting a 5.7% improvement in third-quarter profits, Canada’s largest supermarket chain said earnings for the full year would come in below previous guidance, which saw a decline of up to 5% from 2005 profits. The company added that would no longer provide any earnings forecasts.

The grocery chain said that it plans to close 19 Provigo stores in Quebec and 24 wholesale tobacco outlets in a bid to improve results.

Although income for the quarter climbed to C$203m (US$177.24m), or C$0.74 per share, from C$192m, or C$0.70 per share, on sales that rose 4.6% to C$9bn, Loblaw described its performance this year as “uncharacteristically poor”. The company said that it anticipates fourth quarter charges of C$40-45m for asset impalement, redundancies and other costs related to the closure of its Provigo banner. Additionally the retailer expects C$12-15m in charges associated with closing its wholesale operations.

Loblaw has forecast C$90m in costs associated with overhauling its warehousing facilities and C$25m for centralising its head office operations. Yesterday, the company added an additional C$18m charge clocked up in the third quarter, associated with clearing excess general merchandise.

Weston Jr. told analysts in a conference call that the company’s new management is formulating a new recovery plan, which will be announced after its fourth quarter earnings release in February. He did indicate the company’s intention to sharpen its focus on food and private label offerings and only offer general merchandise in categories where the retailer could compete effectively with the likes of Wal-Mart.