Loblaw shares have taken a battering over the past few days, dropping to C$47.14 (US$42.06) in morning trade today (3 October) following news that unionised workers in Ontario are considering strike action over wages and conditions.

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Members of United Food and Commercial Workers Canada have thus far voted 95% in favour of giving their union a strike mandate, union officials said


While the union said no deadline had been set, it now looks likely that 47,000 workers at the company’s Loblaw, Zehr’s and Real Canadain chains will launch a strike on Friday – the Canadian Thanksgiving weekend.


Wayne Hanley, national director of UFCW Canada, said: “We have asked our members who work at Loblaws, Zehrs and Real Canadian Superstore locations across Ontario to give us a strong strike mandate.”


“These negotiations have been difficult and complicated and they continue,” Hanley added.

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Loblaw’s traditional market is western Canada. The retailer moved into Ontario two-and-a-half years ago to compete with Wal-Mart. With the majority of Loblaw workers unionised the Canadian retailer operates at a competitive disadvantage to Wal-Mart due to higher labour costs – which account for about 19% of Wal-Mart sales compared to 22% at the Real Canadian Superstore banner, 27% at Loblaw and 26% at Zehrs.


Before moving into Ontario, the UFCW agreed to concessions that would see warehouse-style stores paid less than traditional formats.


The retailer’s latest turmoil comes less than two weeks after the departure of president John Lederer, who stepped down after failing to deliver revival after 18-months of dwindling earnings and poor margins.