A distinct problem

Vicente Trius, the new president of Loblaw, is facing some challenges. It appears that the previous president, Allan Leighton, despite his aggressive efforts to fix some of Loblaw’s damaged parts, also managed to create some confusion at head office and even more confusion in the stores themselves. The biggest problem, perhaps, lies in Quebec. In the eyes of many people in that province, the company’s Quebec division, Provigo, is suffering and remains in almost complete disarray.

Quebecers who remember grander days of Provigo are becoming increasingly vocal. In August, one prominent executive published a piece in La Presse entitled “A Disaster Signed Loblaws.” That executive is Gaétan Frigon, executive chairman of Publipage Inc., who formerly worked for Loeb, Co-op stores, Metro-Richelieu and Steinberg.

In the article, Frigon wrote: “History is full of examples of companies that, ignoring the distinct society in Quebec, have tried to ‘Canadianize’ their operations, each time with the disappointing results that have led to their disappearance. Loblaws has foolishly fallen into that trap.”

He went on: “Over the past 13 years hundreds of executives and other non-store employees have left the company, or have literally been shown the door, often with generous severance payments to avoid waves that would have alerted the media about what was happening. The marketing of the Quebec stores, once conceived, managed and implemented by Quebecers in Quebec for Quebec consumers, is now conceived and managed from Toronto. The local input is minimal and the result is sad, almost worth crying over.”

And then he added: “The spirit that motivated the Provigo supermarket owners before Loblaws acquired it is simply not there any more.”

Frigon noted that each new player in the Quebec marketplace “eats the market share of Provigo” far more than that of Metro or IGA. He praised Metro’s current president, Eric La Flèche; and IGA Quebec head, Marc Poulin, both of whom, he says, are worthy successors to Pierre Lessard (at Metro) and Jean-Guy Deaudelin and Pierre Croteau (at IGA). “Provigo should have followed the example of IGA, a company owned by Sobeys in the Maritimes, which has over the years given its Quebec subsidiary the necessary autonomy for its success.”

Frigon said that Loblaw’s actions in Quebec show a “lack of respect” for the founders of Provigo: “Denault, Turmel, Provost and Lamontagne who made the company after its founding in 1969 into a jewel of Quebec entrepreneurship. They certainly deserve more than the current disaster,” he wrote.

Frigon added that Provigo is in a race to the bottom, “and it will have only itself to blame.” He urged Loblaw to reconsider its position, noting that Metro and IGA strategies are far superior. He concluded: “Centralization of operations (in Toronto) are often contrary to local requirements.”

You may not agree with everything Frigon says, but you’re likely to agree on this point–Provigo is going backwards, fast. And it is crying out for its new president, Trius, to make some speedy adjustments.

Frigon is not alone in his opinion. Many Quebec business executives seem to agree with him. And customers in Quebec have been voting with their feet by not supporting Provigo stores.

With many other challenges facing him, Trius may not see the Quebec division as requiring immediate attention. But if he doesn’t get to the matter soon, Provigo may very well find itself on the road to irrelevancy.