Loblaw Companies Limited: Rating Report

On May 18, 2023, DBRS Limited (DBRS Morningstar) confirmed the Issuer Rating, the Medium-Term Notes rating, and the Debentures rating of Loblaw Companies Limited (Loblaw or the Company) at BBB (high). DBRS Morningstar also confirmed Loblaw’s Second Preferred Shares rating at Pfd-3 (high). All trends remain Stable. The ratings confirmations and Stable trends reflect DBRS Morningstar's expectation that, given the relatively inelastic nature of Loblaw’s product offering combined with its strong footprint of discount banners and private-label offerings, the Company's earnings profile will remain supportive of the current ratings, despite near-term pressures on operating performance from persistent inflation and consumers' decreasing purchasing power. The BBB (high) ratings also continue to reflect the Company’s strong business risk profile, including its position as Canada’s largest food and drug retailer, and continue to consider the intense competition in Canadian food retail.