Shoppers staff ‘excited’ about deal

TORONTO— The workforce at Shoppers Drug Mart Corp. responded with enthusiasm to a proposed $12.4-billion takeover offer from grocery giant Loblaw Cos. Ltd., the pharmacy chain’s executives said Thursday, despite voicing some concerns that the company’s business model would change.

“They see the complementary nature” of the two retailers’ strategies, chief executive Domenic Pilla told analysts on a conference call to discuss improved second-quarter results at the country’s biggest pharmacy chain. “Generally, the central office employees and the associates are very excited about the possibilities,” he added, when asked about employee reaction in the wake of a town-hall meeting Wednesday to discuss the Loblaw merger.

“Their concern was around the support of the associate model,” Pilla added, which sees individual pharmacist franchisees own their own stores. “We reassured them that that is something we are absolutely planning to continue.”

Given the sensitive nature of the Loblaw deal, the company was not in the position to disclose any further information, executives said.

The chains are gambling they can capitalize on each other’s strong suits — strong private label programs, loyalty card programs and convenient urban retail space — in what has become one of the most competitive years in Canadian retail history with the entry of Target into the market.

The quarter ending June 15, which banked a solid performance in Shoppers’ beauty and food businesses, was highly competitive, Pilla told analysts. “Clearly the consumer continues to be very value-conscious and price-sensitive,” he said. “Our proportion of sales on promotion continues to increase.”