With surprising speed, Galen G. Weston remade his father’s business in his image.

And that could be good news for Canadian consumers hoping for more price competition across the grocery industry.

It’s true that Weston has effectively managed George Weston Ltd’s $54.7 billion (2020 revenue) for eight years. (GWL) and its subsidiary Loblaw Cos. Ltd., Canada’s largest grocer.

But Weston, great-grandson of the company’s founder, worked until last year in the shadow of his father, Galen W. Weston. The elder Weston died last April aged 80 after a long illness.

Still, Weston was unintimidated by his father’s legacy of pulling off one of the biggest corporate turnarounds in Canadian history at Loblaw, beginning in the 1970s.

Weston had his own legacy in mind.

In the nine months following his father’s death, Weston abruptly abandoned much of the family business to focus on food and drug retailing.

He auctioned off most of GWL’s food processing businesses, including Weston Foods, the Toronto baking division that gave birth to the family business in 1882.

And last month Weston parted ways with his father’s luxury retail empire, selling it for $6.9 billion to Austrian and Thai interests.

Weston Sr. has spent half a century developing this business, with department stores in Britain, Ireland and the Netherlands under the Selfridges Group umbrella.

All that remains of this legacy is Holt Renfrew & Co. Ltd., owned by GWL.

Weston shook up the upper ranks of Loblaw by importing experts from GWL and elsewhere to Loblaw. He then subjected the company to an exhaustive review of Loblaw’s sprawling retail operations.

Weston concluded that the company had lost sight of what he called “retail fundamentals”.

What followed was a mini transformation in the number of stores from industry-leading Loblaw. Several lagging stores were repurposed, some into discount outlets, and three were closed completely.

It’s probably just a dry run for a bigger overhaul to come. More on that later.

Loblaw has led its big three peers in their last fiscal years in revenue growth, at 9.3%, outpacing the gains of Empire Co. Ltd.’s Sobeys Inc. division. (7.9%) and Metro Inc. (2.2%). .

And with its renewed focus on profit margins and cost control, Loblaw posted net profit in the first three quarters of this year equal to last year’s profit.

That momentum continued in Loblaw’s latest quarter, in which it reported a 26% increase in profit to $431 million.

And Loblaw was a hot stock in 2021, gaining 52% in value. Shares of Metro and Empire rose 14% and 5.5%, respectively.

But what happens next will tell whether a fourth-generation CEO can ensure the lasting success of this family business.

Loblaw is still underperforming its peers.

With less than 35% of Loblaw’s revenue of $52.7 billion in 2020, Metro generated profits of $823 million, or nearly 75% of Loblaw’s total profits last year.

Metro achieves its impressive profits with just 1,600 stores for Loblaw’s more than 2,400 outlets. Empire’s Sobey division also makes more profit per store than Loblaw.

Weston was right last year to warn his colleagues against complacency.

Loblaw can boast that approximately 90 percent of Canadians live within 10 kilometers of a Loblaws, No Frills, Shoppers Drug Mart or other store operated by one of Loblaw’s more than 15 banners.

But this ubiquity is not a pure virtue. Many of these stores are lagging behind.

Loblaw still needs to reduce the number of its stores. Entire banners should also disappear. Loblaw’s wholesale clubs, for example, are unlikely to make inroads against Costco Wholesale Canada Ltd.

The company’s flagship Loblaws stores have long had a reputation for charging the highest prices in town.

In its recent survey of Canada’s most respected grocery stores, Dart Insight and Communications found that Loblaws ranks a dismal eighth. On this list, led by Costco, Metro (#3) and Sobeys (#5) also edged out Loblaws.

The current surge in food price inflation will drive consumers to stores that present themselves as inflation fighters. In this contest, rivals like discounters Costco and Walmart Canada, with their vast grocery offerings, are poised to increase market share at Loblaw’s expense.

The Weston dynasty’s greatest strength may be its newfound status as a pure play in food and pharmaceutical retail. With little else to lean on, he must find a way to become the nation’s top grocery store – in terms of price, product selection and marketing – or gradually sink into the lurch. ‘uselessness.

If this is the campaign of reinvention that Galen G. Weston has embarked on – much like his father decades ago – it will force a higher level of competitiveness on the entire industry.