George Weston Limited (WN) Earnings Call Transcript & Summary

Good morning, and welcome to the George Weston 95th Annual Meeting of Shareholders. I'm Galen Weston, the Chairman and Chief Executive Officer of George Weston. Each year, we look forward to this meeting and the opportunity that it provides to speak and to visit in person with our shareholders. At the same time, we are broadcasting this meeting virtually as we have for the past 3 years. This hybrid format provides all shareholders an opportunity to participate regardless of the location. Joining me on stage are Richard Dufresne, our President and Chief Financial Officer; and Andrew Bunston, our Vice President, General Counsel and Secretary. Several director nominees, representatives of the auditor and other members of our senior management team are also here, along with senior executives from Loblaw and Choice Properties. I'd now like to call to order this Annual Meeting of Shareholders. I'll begin by outlining how voting and questions will be addressed. Usually, and this year is no exception, the majority of shareholders have submitted their proxies or voting instructions in advance of the meeting. The hybrid format allows shareholders to vote in person or through an online portal. If you requested to vote in person, please use the ballot that was given to you when you registered. If you have voted in person with a ballot, please raise it in the air at the end of voting on all matters and a representative from the scrutineer will collect it at that time. To vote online, please use the webcast. When we are ready to table an item of business for vote, you will see voting options appear on your screen. And if you have voted in advance of the meeting and you do not wish to revoke your previously submitted proxies, then you don't need to do anything. Scrutineers will tabulate all of the votes cast during the meeting, and we will report on the results of each resolution towards the end of the meeting. Questions will be accepted in person and through the online platform. To ask a question in person, please line up in front of one of the microphones at the front to submit a question online, click on the messaging icon at the top of the online platform window. And when asking a question, please identify whether it relates to a motion being considered as part of the formal business of the meeting or whether it is general in nature. We will address questions directly related to a particular motion at the appropriate time of the meeting and save general questions until the end of the meeting. We will first answer questions posed from those in person, followed by those questions submitted through the online platform. If you are attending the meeting virtually and logged in as a guest, you will not be able to ask a question as only registered shareholders and duly registered proxy holders may do so. Andrew Bunston will read the questions submitted online allowed, when requested, and either I, Richard or Andrew will respond. We'll make every effort to answer all of your questions during today's question-and-answer period. Today's remarks may include forward-looking statements. Details regarding forward-looking statements can be found in the company's 2022 Annual Report and First Quarter 2023 report to shareholders. Before we commence with the business of the meeting, please join me in extending a warm welcome to the Grade 12 accounting class from Bloor Collegiate Institute . Please stand to be recognized. I hope you guys enjoy the meeting and that you will take the opportunity to ask any questions that you have as long as they're not too difficult. Before proceeding with the formal part of today's meeting, I'd like to take a moment just to reflect a little bit on 2022. First and foremost, I'm pleased with the performance of George Weston Limited and its businesses. We maintained an unrelenting focus on the needs of our customers and tenants grounded in 3 priorities: enhancing our core business through exceptional operating performance, driving growth through compelling strategic initiatives and leading our industries in environmental, social and governance programs. Delivering against our strategy to find 2022 as we faced 2 compounding forces as COVID lockdowns persisted in the early part of the year and then tapered Canadians began to settle into a new post-pandemic reality. Then global inflation and interest rates accelerated, impacting our retail and real estate businesses and their customers. These circumstances were a reminder that our businesses have a unique opportunity to serve our communities, providing them with spaces to work, live and shop as the building blocks to live life well. At Loblaw, we entered the year with momentum and a keen focus on the fundamentals. For 2 years, retail excellence has been our focus, and the team continued to deliver against it in 2022. Today, we have the right banners in the right communities. Our services have expanded and improved. We are delivering value when customers need it most. We are living our purpose, helping Canadians live life well. In a year marked by a historic global cost of living crisis, providing value was our most important priority. As the costs we pay suppliers for food hit record highs, we invested as our retail prices rose slower than our costs and our food gross margins declined below pre-inflation levels. This made a difference. Canada continued to have one of the lowest food inflation rates in the world, and Loblaw contributed to that, stopping $500 million in unjustified cost increases from vendors, freezing the price of 1,500 no-name items, helping customers save $1 billion with PC Optimum points and $1 billion more as they switched to our discount stores from other chains, all while selling many key essentials below our cost. In response, Canadians have recognized Loblaw as the grocer doing the most to help battle food inflation. Early in the year, lockdowns ended and the return to schools, offices and social settings brought more customers to Shoppers Drug Mart. This meant significantly higher beauty sales and year-long traffic in our cough and cold aisles. As the health system struggled to recover from the pandemic, provinces turned to pharmacists to fill the essential primary care gaps. Pharmacy services expanded nationwide and the stage was set for our first ever pharmacist-led clinic. Today, we have 12 with active plans for 70 more this year. And Shoppers Drug Mart acquired Lifemark, Canada's leading physiotherapy and rehabilitation services provider. As our services grow, convenient, accessible care is just one of the reasons that Shoppers Drug Mart remains among the country's most trusted brands. Our commitment to retail excellence in our core business means both running great stores and serving customers better, all while driving growth and investing in the future. 2022 was also full of positive momentum for Choice Properties. We advanced our strategic agenda, demonstrated the stability of our portfolio and balance sheet and made meaningful progress on our development pipeline and adopted ambitious ESG goals, including science-based targets to reduce greenhouse gas emissions to net zero by 2050. Choice Properties aims to create enduring value through ownership, operation and development of high-quality commercial and residential properties. We believe that value comes from creating spaces that improve how our tenants and communities come together live, work and connect. Our strategic framework is built around stability and growth. As Canada's largest REIT, we have an exceptional actively managed portfolio. That means effectively operating our assets, recycling or selling those that might underperform and breaking new ground like in East, Gwillimbury. This is a great example of the intersection of our businesses. This site is premium real estate owned by Choice Properties currently under construction and soon to be the home of a new modern 1.2 million square foot distribution center supporting Loblaw Companies Ontario business. It's a substantial facility, exceptionally well placed to serve our growing business, and Loblaw will benefit from a fully automated warehouse that is amongst the most modern in Canada. The end result will be improved service to customers. Once complete, the facility will also have the largest rooftop solar energy system in Canada. Underpinning everything we do at Choice Properties is a disciplined focus on capital preservation, stable and growing cash flow and net asset value appreciation and distribution over a long-term investment horizon. I'd now like to ask President and CFO, Richard Dufresne, to share this year's financial results with you.

Every year, I look forward to this meeting and the opportunity to engage with you, our shareholders. In 2022, with the post-pandemic return to more normal activities, our businesses had to deal with increasing pressures from continued high inflation, ongoing supply chain challenges and rapidly escalating interest rates. Despite these factors, I'm pleased with our performance across the Weston group. Loblaw marked 2 years of retail excellence, 2 years of careful cost control and 2 years of outperformance through consistent adherence to its financial framework. Loblaw recorded $56.5 billion in sales on growth of 6.3% from the past year. Food same-store sales was up by 4.7%. All of its banners performed very well, and its discount banners saw exceptional growth as consumers search for value. The pharmacy business had another exceptional year. Drug retail same-store sales were up 6.9% with growth led by higher margin front store business. A return to more normal activities drove very strong growth in cosmetics and the cough and cold season seemed to last all year. Loblaw's continued focus on its financial framework reflected its consistent strong performance throughout the year. Sales growth was supported by a 20 basis points improvement in retail gross margin, driven by our Shoppers business, while cost discipline and sales leverage drove a 30 basis point improvement in the SG&A spending rate. Consolidated EBITDA grew by 10.6%, and EPS was up by 22% in 2022. With retail cash flow at just over $2 billion, Loblaw repurchased $1.3 billion worth of common shares and invested $1.6 billion in capital back into the business. Share buybacks and its 12th annual dividend increase, combined with strong and consistent financial performance, generated an impressive total shareholder return of 17.1% in 2022. I would like to thank the entire team at Loblaw for their strong contributions this past year. The Choice Properties team continued to execute on their strategic framework in 2022, remaining focused on its 3 key business priorities of maintaining a market-leading portfolio, sustaining operational excellence and delivering on its development pipeline, all of which is supported by its robust foundation, including its industry-leading balance sheet. Last year, Choice Properties made the strategic decision to exit the office asset class to better focus its time and capital on the opportunities available in its core business of essential retail, industrial and its growing mixed-use and residential platform. In 2022, Choice Properties completed over $1.2 billion of real estate transaction, including the disposition of over $800 million of office properties. Over the past few years, Choice Properties has made the growth of its development platform, a high priority and 2022 was no exception. Choice ended the year with 18 active development projects with a total investment of approximately $400 million. On completion, these active developments will add 1.9 million square feet of new GLA to the portfolio. Combined with its active developments, Choice now has a transformational development pipeline of over 18 million square feet, which will drive meaningful net asset value growth in the future. In 2022, Choice delivered stable and consistent unitholder returns driven by the strength and resiliency of its market-leading portfolio. Financial highlights for 2022 include strong period end occupancy of 97.8%, with retail and industrial operating at near full capacity. Solid funds from operation at $0.964 per unit, an increase of 1% compared to 2021 and an increase in same asset NOI of 3.8% over the prior year. 3.6% growth in net asset value and strong debt metrics with a debt-to-EBITDA ratio of 7.5x and liquidity of $1.2 billion. Adding a strong balance sheet and disciplined approach to financial management have allowed Choice to deliver superior returns even during times of volatility, including a pandemic and rising inflation. It has also set the foundation for the first distribution increase since 2017. Choice is positioned well to continue to deliver strong risk-adjusted returns into the future. I would also like to acknowledge Real and the Choice team for a successful year. In 2022, George Weston's businesses demonstrated their ability to execute on their strategies and drive strong performance for the company. On a consolidated basis, George Weston reported revenues of $57 billion, an increase of 6.1% compared to 2021. Adjusted net earnings available to common shareholders were $1.4 billion, an increase of 16.2% compared to 2021. With its 2 strong operating businesses, George Weston generates strong cash flow from the dividends received from Loblaw, distributions received from Choice Properties and proceeds from participation in Loblaw's normal course issuerd it. This strong cash flow and cash balance supported the return of capital to shareholders through the repurchase of shares and ongoing annual dividend increase contributing to a total shareholder return of 16.4% in 2022. I'm pleased to inform you that this morning, we announced an 8% increase to our dividend. I want to thank all of our colleagues across the Weston Group. They're focused on meeting the everyday needs of our customers and tenants and pursuit of operational excellence is the foundation of our confidence in the future. I will now turn the meeting back over to Galen.

I'll now proceed with the formal part of the meeting, and I'd ask Andrew Bunston to act as Secretary of the meeting. Computershare Investor Services is acting as scrutineer of the meeting by way of its representatives, Patty Sigiannis and Daniela Munoz. Only shareholders of record at the close of business on March 13th, 2023 or their appointees are entitled to take part in and vote at this meeting. To make the best use of our time, certain shareholders have been asked to move and to second the motions, which are called for in the notice of the meeting. A copy of the notice of the meeting and proof of its mailing have been filed with the company. The scrutineer's report indicates that a quorum is present. I now declare that this annual meeting has been properly called and is duly constituted for the transaction of the business for which it has been called. Today's agenda will consist of the submission of the company's 2022 annual audited consolidated financial statements, followed by 3 resolutions: first, to elect the Board of Directors for next year; second, to report the company's external auditor for fiscal 2023 and third, to consider an advisory resolution on the company's approach to executive compensation. At the conclusion of the formal items of business, we will move to our general question-and-answer period and the announcement of voting results. I should also note that during the meeting, we may pause from time to time to consult on questions or comments raised in the online platform. Thank you for your patience as we do so. I'd now like to place before the meeting the annual consolidated financial statements of the company, together with the notes and the auditor's report for the year ended December 31st, 2022. These are included in the annual report, which was provided to shareholders and can also be retrieved from the company's website or SEDAR. Andrew, were there any questions submitted online in connection with this matter?

Galen, we've not received any questions.

We'll now move to the nomination and election of directors. With us today and seated in the front row or joining us online are all of your director nominees. I would ask that they please stand to be recognized. There are 7 nominees for election at this meeting. Our management proxy circular contains detailed biographies, setting out the valuable qualifications and diverse backgrounds of the nominees proposed. To facilitate the introduction of the nominees, we refer you to the slide on the webcast and projected behind me. I am pleased to report that based on the proxies received by the scrutineer in advance of the meeting, each director nominee received votes in favor from at least 97% of the votes cast. I declare the polls open on all resolutions. Before proceeding to voting, I'll address any questions related to the nomination and election of directors first in person and then online. Andrew, any questions submitted online related to this item?

We've not received any.

I see no questions from the floor. Could I please have a nomination for the election of directors.

Good morning. My name is Lina Taglieri, and I'm a shareholder. Mr. Chairman, I nominate the following persons for election as directors of the company to hold office until the next Annual Meeting of Shareholders or until they resign or their successors are duly elected or appointed: M. Marianne Harris, Nancy H.O. Lockhart; Sarabjit S. Marwah, Gordon M. Nixon, Barbara G. Stymiest, Galen G. Weston, Cornell Wright.

My name is John Williams, and I'm a shareholder. Mr. Chairman, I second the motion.

I'll now call for a motion to move that the nominations be closed.

Mr. Chairman, I move the nomination be closed.

Mr. Chairman, I second the motion.

Thank you both. I'll ask shareholders or their appointees to cast their votes by completing their ballots or through the online portal. As a reminder, if you have already voted or sent in your proxy, there's no need to do anything unless you wish to change your vote. Again, if you're voting by ballot or in person, the scrutineer will collect all ballots at the end of voting on all items of business. If anybody has a ballot, you want to stick up in there and waive it now. We'll now move on to the next item of business, which is the appointment of the auditor. Andrew, any questions submitted online in connection with this item?

No questions, Galen.

Then I'll entertain a motion for the appointment of the auditor and the authorization of directors to fix the auditor's remuneration.

Mr. Chairman, I move that PricewaterhouseCoopers LLP be appointed as auditor of the company until the next Annual Meeting of Shareholders of the company and that the directors be authorized to fix the auditor's remuneration for the 2023 fiscal year.

Mr. Chairman, I second the motion.

The next item of business is the advisory resolution regarding the company's approach to executive compensation. The resolution is more fully described in Page 16 of the company's management proxy circular. Andrew, were there any questions online?

No questions online.

I'll now entertain a motion to approve on an advisory basis the company's approach to executive compensation.

Mr. Chairman, I move that the advisory resolution regarding the company's approach to executive compensation as more fully described on Page 16 of the company's management proxy circular be approved.

Mr. Chairman, I second the motion.

If you've not already done so, I'll ask shareholders or their appointees to now cast their votes by completing their ballots or through the online portal. This brings us to the end of voting on the items of business before the meeting, and I therefore declare the polls closed. Thank you for casting your votes. The scrutineers will collect any in-person ballots at this time. As we approach the end of today's remarks and prepare to open the meeting for questions, I wanted to touch just for a few minutes on our approach to environmental, social and governance leadership as a company. As our group's corporate center, George Weston approaches ESG from the perspective of setting a tone from the top. For more than a century, we have believed that if you set high standards and communicate your values, good people will carry them throughout the business and into our communities. Together, our teams are making great progress, fighting climate change and advancing social equity. We have also set high standards across the group for disclosure and governance, and I'm proud of our progressive transparency and hope you'll take the time to read our 2022 ESG report available on our website. I also encourage you to stop by our ESG display in the lobby and learn more about our group's initiatives. Choice Properties is one of Canada's largest landlords. That puts us in a unique position to have an impact on communities, their environment and people. That's why Choice was one of the first companies in Canada to a validated science-based targets for net zero emissions. And why 160 of its properties are lead Bombas Best or Bombas Best certified for sustainable features. And as we grow, the company is promoting energy efficiency, renewables and low-carbon design. We're also making excellent progress on social equity. Choice is an award-winning employer in part for our progress on representation and policies. Beyond our business, we're helping children and low-income communities, donating money and colleague hours. And we helped launch the accelerating accessibility coalition to ensure real estate design and construction accounts for the needs of Canadians living with disabilities. At Loblaw, helping Canadians live life well means more than great retailing. It builds on our responsibility to have a positive impact in the communities we serve. We've been working on cutting carbon for over a decade. But last year, when we made our definitive net zero commitment by 2040, we weren't sure exactly how we'd get there, and we still aren't. But we knew that we would need to embrace innovation as it takes shape in order to be successful. And I'm not sure if you saw the headlines last week when we announced a big step in our decarbonization journey. Should we roll the video? [Presentation]

That's pretty awesome. I asked the team to put like some more music that resonated, but it was very good, Kevin. I thought you did a nice job. But now I don't know how to -- like say, that's awesome, but it's awesome. Hundreds of stores and facilities, eliminating our operating footprint, completely eliminating our carbon footprint in Alberta, reducing our emissions by the equivalent of a small city of homes. It includes all of our offices at Choice Properties are part of this project and an extraordinary step forward for our Scope 1 and Scope 2 emissions at Loblaw and at Choice. This is a groundbreaking initiative and it says up here on the screen. I'll repeat for emphasis, reducing our total Scope 1 and Scope 2 by 17% through one single large-scale project and will turn our highest carbon emitting energy market into our lowest. It's a powerful example of private industry working together ourselves and TC Energy to bring scale change to the energy transition in this country. This adds to the fact that we've already reduced our emissions by 8% from a 2020 baseline. I said at the start of our carbon journey, we should be able to grow our business while shrinking our footprint. Similarly, we believe that neither our businesses nor our customers should pay more because of this project. Fighting climate change shouldn't have to come at the expense of performance. We have concrete measurable carbon and waste cutting actions live across all parts of the business. Just last month, we put our first electric truck on the road with plans to decarbonize entirely our short-haul fleet. And we've been working with the Royal Bank of Canada, Maple Leaf Foods and Nutrien to kickstart the Canadian Alliance for net zero agrifood, an industry effort to make Canada the world's first net zero agrifood market. We have similar progress on advancing social equity. We continue to increase representation on women and visible minorities from our store to our Board of Directors, with many of our 2024 goals already achieved. And with a focus on women and children as the building blocks of healthy society, we raised and donated a record $110 million to thousands of organizations intensifying our support for food banks and charities. We announced a pledge to donate one billion pounds of food to those charities and our PC Children's Charity is closing in on its goal of feeding one million kids annually by 2025. We are making progress with more work ahead. Whether we're celebrating our business performance or our impact in our communities, none of this happens without our incredible colleagues, and I'd like to thank each of them for their hard work throughout 2022 and into 2023. And you may recall that in 2021, when Richard and I returned to Loblaw, Robert Sawyer came out of retirement to join us as Chief Operating Officer. We believe that with good strategy and clear focus, we all are 220,000 of us at Loblaw could bring retail excellence to life. And having extended his time with Loblaw, Robert has decided to return to retirement at the end of this year. And while I look forward to recognizing him properly at the right time, he's been clear that there are to be no best wishes until the end of the year. We have work to do. With more than a year to plan for Robert's departure. Last summer, we initiated a global search for the right leader to guide our day-to-day operations and strategy. During that search, we found someone with Robert's retail skills and the experience to take on broader oversight of the Loblaw enterprise. That leader is Per Bank, the outgoing CEO of Denmark's Salling Group, who will join Loblaw as President and CEO by early 2024. I'm delighted that Per has made the trip over this week with his wife Heidi and Per. I'd like to ask you to stand and be recognized. Now while Per and Salling may be new to many of us, their story will be very familiar. Salling is a family firm, more than a century old, led by a founder and his son for nearly 100 years. They are their nation's leading grocer, renowned for their various banners, great private label products, a top loyalty program, growing online offerings and one of the nation's largest workforces. The parallels with Loblaw are remarkable as is Per's record of retail excellence and growth, honed across a range of global markets and Per will have plenty of time to settle once he arrives in Canada, getting to know our business and ultimately transitions with Robert and me later this year. And as he takes on day-to-day oversight, I will remain chair. Richard will remain CFO and our management Board will remain the best leadership group in Canadian retail. And once again, none of this happens without our incredible team of hundreds of thousands of colleagues in our communities across the country. I'd now like to open the meeting for questions.

We'll first answer questions from those in person. The microphones are up here for anybody who needs to make their way up to the front. And as a reminder, for those of you who are online, please submit a question by clicking on the messaging icon at the top of the online platform window. And then what we'll do is we'll try and answer as many questions as we can, but we're going to limit the session to 20 minutes. And then if we haven't answered your question, then we'll make sure that we address it offline. There's a nice lineup, yes sir over on the, I guess, the right side of the room, why don't you start us off?

Earlier, you talked about ESG. And I caught the Loblaw Annual Meeting, and you talked about 0% reduction in packaging. And I think most people here would agree. When you reduce 30% in packaging, does it reduce the cost? Or is it just good for the environment? What exactly does that mean?

Our commitment is to have 100% of our control label products, recyclable or compostable by 2025. And it's a big concerted effort that includes changing materials and sometimes that can cost us more. It also means reducing materials. For example, we would have famous example of this would be triple over wrapped cucumbers. And so we've taken off that triple over wrap. We now only have one wrap and so we save money and the cost in redoing that packaging and also we reduce the waste. There's a combination, things that will save us money and also things that will cost us more. Net-net, our view is that it's number one, the right thing to do. Number 2, the regulatory environment really across the world, but particularly in Canada, nonrecyclable or compostable packaging. And then the third reason is that, that's what our customers are looking for more and more. And if we continue to talk about the terrific progress that we're making, it will encourage more customers to shop with us.

My name is Frida Evans. I'm a Bloor Collegiate Institute here today. As inflation of certain food items such as chicken breast and other items increased, has there been a decrease in consumption of those items? And also, have you noticed any increased consumption in other areas in compensation of those increased items?

You picked kind of an interesting example. When it comes to protein and by that, most of the stuff that's on their center of plate mostly meat. The highest price sort of per pound is beef, the next highest prices, pork and lamb. And then the next -- sort of the lowest priced animal protein is chicken. And so what we've seen is a shift of consumers away from the higher-priced items like beef, much more towards the lower-priced animal proteins like chicken, so that would be a good example. We're also seeing customers shift into control brand products. For those of you who saw the wonderful no-name display out there, our no-name products are consistently 25% cheaper than the national brand for equal to or, in some cases, better than quality. And lots of customers are really beginning to understand that like why should I pay 25% more for the same product -- and the answer is, you shouldn't. And so we see enormous growth in our control brand programs, particularly in no name at the moment. That's a good example. And then the third one I'll share is customers are shifting to discount formats. Again, for the same reason, largely a no-frills` store would be, say, 10% cheaper than, say a Sobeys conventional store, maybe even cheaper than a Metro, cheaper than that of a Metro store. And so increasingly, you're seeing customers choose to shop in those discounters as well. A lot of interesting things happening as food prices go up and customers are looking for value.

My name is A.J. I'm another student from Bloor. And due to the pandemic happening, we understand there is an increase in customers making online purchases. How does this affect Loblaw?

What we really saw through the pandemic as people were reluctant to go out and they didn't -- particularly people who had high levels of health risk, we saw a skyrocketing increase in the amount of e-commerce sales through the business. And Canada was quite slow to get going when it came to online groceries and then it really rocketed up because of COVID. Now that COVID has passed us by, we see the rate at significantly higher than where we were before COVID, but not quite as high as the peak during COVID. And we expect e-commerce growth rates to continue, and by and large, to grow faster than the overall food market. What does that mean for us? We asked ourselves this question all the time, like if a customer is going into a supermarket and picking their groceries, putting them in their basket, checking them out and then putting their car and driving home. If we do all that work for them, which is what online grocery really means, that's going to cost the company more money. And generally, our customers don't want to pay more money for online grocery. That's a bit of a dilemma. What we've learned and what we've noticed, which is very, very interesting is that customers who are loyal online shoppers, they actually spend more money, not just when they buy their groceries, but they also spend more money in our total ecosystem of businesses at Shoppers Drug Mart, shopping in stores every week. And what that means is that we actually generate substantially more sales for a customer who shops online. And when you look at the math, and you guys will do the accounting, you'll know how to do this math, we actually make more dollars in total from a customer who shops online than we do from a customer who doesn't. And so what that means is the more online business we do, the better off the company is.

We noticed in the annual report that Loblaw companies have a lot of CSR initiatives throughout Canada and the rest of the world. What is something you have seen because of these outreach programs that you wouldn't have expected otherwise working in the retail business?

What have I learned from exploring other companies around the world and what they're doing? Is that kind of the question?

Yes. And especially the CSR initiatives.

Well, goodness me, there are so many different initiatives out there. I saw a great example that a company called Unilever is doing in India, where they have essentially soda machines. Think about it like a soda machine, except for instead that you go to Burger King, and does anybody here shop go to Burger King? Well, anyway, you go to Burger King and you stick the cup under the thing and it pushes all of the soda into the cup and then you drink it. Well, they have a vending machine in India where instead of soda, you can go and you can get laundry detergent. And so you bring whatever size container that you want, you stick it in this machine, it fills up the bottle with laundry detergent and then you pay for the amount of laundry detergent that you actually purchased. I thought was kind of a really cool innovation for how do you reduce packaging waste to this gentleman's question and then without having to necessarily redesign the packaging. And so we've brought a pilot experiment version of that exact same technology into a couple of our stores in Quebec, which is pretty cool. Unfortunately, customers don't seem to like it very much. I'm not sure that, that's going to become a standard across the country, but it's the kind of thing that we've picked up and learned best practices from others around the country.

Earlier you just talked about value, and you talked about 2 different types of shoppers, one that can go to the shopping mall, I mean, to the grocery store and spend quite a bit of money and it's fine with it, and other one is looking for value and discount. You employ 220,000 people. When you think about your employees, do you think there are in A or in the discount?

Are you asking do you think that our wage rates are high enough?

I didn't say wage rates, I'd say as a profitable company. You might consider bonuses. I mean, many companies down in the states did that. You obviously have a specific standard of what you want to pay, but you say, if we're profitable at some level of profitability. And as far as I can see, the company is very profitable based on what and as a shareholder I benefit. But I was wondering your employees?

As you can imagine, something that we pay an enormous amount of attention to. When you're the largest employer in the country, and you're so dependent upon folks, amazing folks working in supermarkets, working in distribution centers, making sure that Loblaw is a great place to work is a major priority for us. And what you earn, your wage rate, number one, and the accessibility that you have to ours, those are the 2 biggest drivers, not the only drivers of job satisfaction in the enterprise, but they're 2 important drivers. We want to make sure that we have both. We want to make sure that we're paying an appropriate wage. And we have the highest, we're in the top quartile of highest wage payers. We just did a recent piece of analysis on our average wage versus the largely stated and largely agreed to national living wage for Canada. And in both cases, we're above those levels. We take that as a good benchmark for how we do. You mentioned bonuses. We got 220,000 people working in the business. We paid bonuses to 40,000 people this year in the performance cycle. Like you, we think it's very important to have performance bonuses attached to as many, many people as possible in the organization and so that when the company does really well, then that travels across the enterprise. And then we have one of the most generous employee share ownership programs in the country as well to support our colleagues if they're part of the enterprise, and they want to invest in stock because they believe that the company has potential to grow and secure their retirement savings. We give them a 50% discount on their ability to do that, which is a very attractive rate. And we have huge take up, a lot of collective belief in the organization and what we're doing and how we're doing it. We're not perfect by any stretch of the imagination. I get lots of e-mails on a periodic basis from colleagues who are frustrated or think they might not be getting what they need. More than anything, it's access to ours. What your wage rate is only matters if you can multiply it by 24 hours or by 40 hours over the course of a week. And we've made enormous inroads in terms of increasing the number of accessible hours for colleagues who work in our stores so that wherever possible, they don't have to get that second job to round out the week. Always more we can do, but I'm very proud of all the things that the team does to support our colleagues. Are there any more questions? No one else making their way down. Was that 20 minutes? Not quite. A little less. Why don't we adjourn the question-and-answer period, and then we'll move on to voting results. We have received the preliminary voting results from the scrutineer on the 3 items of business. On the election of directors, the voting results show that each director nominee has received votes in favor from at least 97% of votes cast. And accordingly, I declare that the proposed director nominees have been duly elected to hold office until the next Annual Meeting of Shareholders or until they resign or their successors are duly elected or appointed. On the appointment of the auditor, the voting results show that approximately 99% of the votes cast were in favor of the appointment of PwC as auditor of the company. And so I declare that PwC is appointed as auditor of the company and that the directors are authorized to fix their remuneration. On the advisory vote on the company's approach to executive compensation, approximately 97% of the votes cast were in favor of the company's approach to executive comp. I declare this motion to be passed. The final voting results will be available after the meeting and posted on the company's SEDAR profile. As there is no further business, can I have a motion to terminate the meeting.

Mr. Chairman, I move that the meeting terminate.

Mr. Chairman, I second the motion.

Thank you both. I now declare the meeting terminated. On behalf of the company, I'd like to thank you for taking the time to join us today. I wish you all the best to you and your families and hope for those of you who are here in person, will join us in the atrium just outside for some more delicious treats which have been provided, as always, by the amazing team at President's Choice. Thank you all.