Loblaw Said to Close DC, Contract Out Work

TORONTO -- Top Canadian food retailer Loblaw Cos. Ltd. here is closing a distribution center in Mississauga, Ont. in the next two years and will contract out the work at its new DC in Ajax, Ont. to a third party, according to a published report.

The report said 850 full and part-time employees at the Mississauga facility, which distributes food to grocer's stores in the greater Toronto area, will lose their jobs.

Loblaws is closing the DC as part of a bid to slash costs and streamline operations in the wake of tough competition from such rivals as Wal-Mart, which has recently introduced the Supercenter format to Canada.

The affected employees will receive a severance package that is still being hammered out with Local 1000A of the United Food and Commercial Workers Union.

Late in 2006 No. 2 Canadian grocer Sobeys, Inc. said it would open a new DC in Vaughan, Ont. that would be operated by Witron, described by the Toronto Star as "European logistics specialty firm."

Loblaw officials were unavailable for comment about the report at press time.
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