Canadian retailer Loblaw announced it has to take a fourth-quarter charge of CAD900mn (US$781mn) which is connected to its undferperforming Provigo supermarkets in the Quebec area. Canada’s market leader is under pressure as this charge will lead to its first quarterly loss in 19 years and its first loss for the full year in 20 years.

“There is a structural weakness in the profitability of our business in Quebec”, executive chairman Galen Weston Jr. told analysts. “But we believe firmly in the potential of that market.” In Quebec, Provigo’s main rivals are Metro and Sobeys (IGA). Wal-Mart Canada however, still focuses its grocery business in Ontaria. Might it also beef up its grocery aisles in Quebec, the problems for Loblaw will further increase.

According to Weston Jr. – who was appointed at the helm of Loblaws since last year September – it will take three years to turn around the business. Optimising its cost base and therewith reducing the pressure on the margins is a priority. Shrinkage reduction and supply chain optimisation also belong to Loblaw’s to-do list.