Canada's largest grocery retailer, Loblaw, said Thursday profits slipped 8.5 per cent in the fourth quarter as competitive pressures kept it from raising prices.
It also announced a new president for the firm.
Loblaw made $151 million, or 54 cents a share, which was short of analyst expectations of 61 cents per share, according to Thomson Reuters. A year earlier, it posted a $165 million profit, or 59 cents a share.
It also said it has hired Vicente Trius to succeed Allan Leighton as president of the company when Leighton leaves that role later this year.
Trius has most recently held an executive director position at French retailer Carrefour, and has also worked in various executive roles at Wal-Mart.
Sales fell 2.1 per cent to $7.2 billion, below expectations of $7.32 billion, and down from $7.3 billion a year earlier.
"2010 was another year of real progress towards completing our renewal plan," said executive chairman Galen Weston in a release.
"In 2011, the company plans to continue its investment in information technology and supply chain which will negatively impact operating income by approximately $135 million over 2010, and estimates capital expenditures for the year to be roughly $1.0 billion."
Loblaw and other Canadian retailers are struggling to maintain profit margins in a highly competitive environment, that the grocer has signaled could keep it from dramatic price increases even as raw material prices on everything from sugar to wheat rise.
Loblaw will face even fiercer pressure when U.S. retail giant Target makes a move north of the border, which could eat into not only the grocery segment, but also Loblaw's growing Joe Fresh clothing line.
Joe Fresh has said it plans to open four new stand-alone stores to open in Canada this spring as well as a location on Manhattan's Fifth Avenue and three others in the New York City area by the end of the year.
Loblaw shares closed down 22 cents, or 0.6 per cent, to $38.87 on the Toronto Stock Exchange.