“The news: Canadian retailer Loblaw will spend C$2.4 billion ($1.7 billion) to increase and upgrade its store footprint this year. The investment is part of the company’s five-year plan to spend C$10 billion ($7.2 billion) on its store network, supply chain capabilities, and job creation.

• Loblaw will open 70 new stores this year, nearly half of which will be discount grocers under its No Frills and Maxi banners.
• The retailer will also renovate 191 stores and continue construction on an automated distribution center in Ontario.

EMARKETER analyst take: “Loblaw’s store expansion in grocery is solely for its discount banners, No Frills and Maxi,” principal analyst Paul Briggs said. “This reflects a longer-term expectation of consumer affordability pressures from inflation and trade economics.”

Implications for retailers: While Canadian consumer sentiment is currently at the highest level since November 2024, according to the Bloomberg Nanos Canadian Confidence Index, households remain wary in the face of higher grocery prices, a softening labor market, and general uncertainty.

• Grocery inflation reached 4.8% in January, slightly less than the 5% in December 2025 but still a major pressure on consumers’ wallets.
• Two-thirds of Canadians expect to spend less this year by relying on money-saving strategies like making fewer retail purchases (53%), shopping around more (41%), and switching to store brands (39%), according to a TD Bank survey conducted by The Harris Poll.

Those concerns will slow retail sales growth this year to 1.9%, per our forecast.