Canada’s biggest supermarket operator Loblaw posted a decline in second-quarter profits which dropped 8.1 percent due to lower prices and rising costs to consolidate warehouses. Net income went down to C$194 million ($170 million), compared with C$211 million for the same quarter in 2005.

Loblaw, which has been struggling to put back on track its plans to streamline operations, said sales grew by 4.6 percent to C$6.7 billion. Loblaw’s profits have dropped in five of the last six quarters due to rising costs related to the closures of inefficient warehouses. The company

planned to build bigger warehouses in a bid to compete with rivals such as Sobeys and Wal-Mart. Loblaw’s president John Lederer, however, remained optimistic of eventual recovery. “We have the leadership position and we intend to hold it,” Lederer said. “We are very comfortable that over the mid to long term we will be able to take on whatever the competitive landscape brings to bear.”