retail news in context, analysis with attitude

In Toronto, the Globe and Mail reports that Loblaw’s parent company, George Weston Ltd., is selling its US bakery business to Mexican manufacturer Grupo Bimbo for $2.4 billion (US).

The paper suggests that this could be a prelude to Weston deciding to make some acquisitions, with speculation centering on Safeway’s Canadian operations or the Overwaitea chain in British Columbia.

The sale of the bakery business is part of a broader move on the part of Weston to sell of non-core businesses and put more of a focus on its retail operations. The story says that Weston is becoming cash-rich, which puts it in a position to make purchases during a recessionary period during which prices may be coming down.

KC's View: