Fresh food at Shoppers proves tasty for Loblaw

Loblaw is touting the convenience of its smaller urban stores at a time when rival retailers are getting into home delivery of food and prescription drugs.

Shoppers Drug Mart, Canada’s biggest pharmacy retailer, has opened stores with fresh food offerings in markets such as Regina, Toronto and Vancouver, and the company is much more bullish about offering up apples and ready-made meals at its highly dense urban locations than in suburban ones.

Canada’s downtown markets have a high population density, chief executive Galen Weston told analysts on a conference call to discuss first-quarter financial results on Wednesday, which saw a 20 per cent rise in profit.

Two years ago, Shoppers began renovating some of its stores to include a small grocery section with produce and Loblaw’s Presidents Choice food brand.

“There is a lot of foot traffic walking past them,” Weston said, with customers picking up a meal on the way home or supplementing grocery trips with fruit and vegetables. “It’s been performing really, really well in the stores where we have deployed it, specifically in the urban markets in Toronto. We are continuously looking for incremental locations to add to that proposition.”

Shoppers has an enhanced fresh food section at 34 locations across Canada. It plans to open 11 more locations in the coming months in Vancouver, where it launched its first outlet with fresh groceries in April. But the company is “not rushing” to roll out Shoppers with fresh food in suburban markets, the CEO said.

“When you move out to the suburbs, the trade-off of going to a small store with less broad offer by driving five minutes, versus driving seven minutes to a bigger supermarket with the full weekly shop available to you, is ultimately what we are struggling with,” Weston said.