Quote:
Originally Posted by Leondros
IFRS 8 permits and even sometimes requires the aggregation of operating segments if they share enough similarities. The essence of this rule was to not have 100 reportable segments in the financials that just adds to the confusion. However, given the higher focus on groceries, their auditors may make the call that carving out grocery from other retail to be required given the focus of many of the users of the financial statements.
Here is the note on judgements used to make that assessment from their 2022 FS.
|
For sure, I'm not saying definitively that they MUST do that, and I'm definitely not qualified to predict what an auditor would say on the matter. But 3 segments doesn't feel unreasonable for a business of that size, and Shoppers is pretty different than the grocery operations, imo. It does seem to meet the tests under IFRS for different segments, but obviously they don't feel it's required.
As an investor I'd value the grocery segment more highly than drugstore front-of-store sales, because I think they're less discretionary and less subject to competition.