Waiting for Target: Canadian retailers retrench

By Mika Rekai - Tuesday, October 30, 2012 at 10:23 AM - 0 Comments

(Bill Sikes/AP Photo)

A dark cloud has been forming over the Canadian retail landscape this month. Hudson’s Bay Co., Shoppers Drug Mart and Loblaw Companies Ltd. have all announced major job cuts. HBC said it will be laying off 210 employees as it moves its information-services department from Toronto to Missouri. Shoppers Drug Mart cut 80 jobs from its head and regional offices. Last week, Loblaw said it is cutting 700 head-office jobs as it looks to streamline operations.

One of the causes: the U.S. retail juggernaut Target Corp., which is opening 189 locations across Canada and which will offer stiff competition in the pharmacy, clothing and grocery businesses. With more retailers looking to expand their offerings and lower prices (Loblaw has already been struggling with Wal-Mart Stores Inc.’s expansion into groceries), it’s getting harder for companies to distinguish themselves, says Kenneth Wong, a marketing professor at Queen’s University. But Wong suggests that the magnitude of the layoffs “suggests there is also something larger at play” than just bracing for Target, or the rising costs associated with drug reforms that Shoppers cited as the reason for its cuts. He says a slowing economy is the main culprit. And that’s bad news for Canadian retailers and U.S. invaders alike.

Canada’s 10 most trusted brands

By Blog of Lists - Tuesday, August 14, 2012 at 9:40 AM - 0 Comments

abdallah/Flickr

Dollars (at least in Canadian Tire money) to doughnuts, these companies enjoy the strongest reputations among Canadian consumers:*

1. Jean Coutu Group (pharmacies)

2. Tim Hortons

3. Shoppers Drug Mart

4. WestJet

5. Research In Motion

6. Bombardier

7. Yellow Pages

8. Alimentation Couche-Tard (convenience stores)

9. Canadian Tire

10. Saputo

*From a survey of consumer attitudes toward companies based on, among other things, their corporate citizenship, leadership, performance, and products and services.
Source: Canadian Business (2011)

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In defence of the corporate jet

By Colin Campbell - Friday, February 6, 2009 at 5:04 PM - 34 Comments

In the corporate jet business, there are three people who are especially unpopular these days: the heads of the Detroit Three automakers. When the trio jumped on their corporate planes and flew to Washington late last year, they turned the business jet from being a nice perk for well-off executives into a symbol of corporate excess. How, people screamed, could these businessmen display such excess when the entire purpose if their trip was to beg for a public bailout? The “delicious irony,” as one congressman said, was too much.

The CEOs elected to drive to Washington on their next trip, but the damage was done. Even today, the outrage over corporate aircraft burns brightly. Last week, U.S. President Barack Obama chastised Citigroup for its plans to buy a new $50 million jet after accepting $45 billion in government bailout money. His administration is now talking about  rules that could force companies that receive federal money to relinquish their private jets. This week, Bank of America Corp. said it will sell a number of its corporate aircraft.

But while there are some ethical dilemmas at play, not all corporate jet travel is bad or unjustified, say ethics and business experts. In some cases, company boards (like the one at General Motors) actually require that their CEOs fly private jets for security reasons. The optics may be terrible in these recessionary times, but flying the corporate jet isn’t always the evil it’s made out to be. “Whether there’s a problem depends on the circumstances,” says Leonard Brooks, a professor of business ethics at the University of Toronto. When jets are used for business purposes and they free up time for executives to work, or improve their state of being when they arrive somewhere to do business, the costs may well be justified, he says. In an interview last month, GM’s vice chairman Bob Lutz was unapologetic, saying that he’d still elect to fly to Washington via private jet, even if it was to ask for tax dollars. (He was not one of the executives who made the now infamous trip in November.) Imagine, he argued, a haggard executive showing up late to a congressional hearing because he’d been bumped off his Northwest Airlines flight. Continue…

Now you can drop $1,000 on eye cream

By Rachel Mendleson - Wednesday, January 28, 2009 at 8:10 AM - 0 Comments

So how many Shoppers Optimum points do you get for buying a $1,060 bottle of eye cream? Now consumers can find out. Shoppers Drug Mart has just launched an upscale new chain called Murale that will not only offer exclusive cosmetics, such as pricey $1,000 lotions from Natura Bissé, but will pamper customers with a luxury in-store spa.

Murale launched with a 7,000-sq.-foot store in Ottawa in November, and last month it opened a 8,200-sq.-foot location in Montreal. Both feature pristine white interiors, curved walls and boutique-like displays. In addition to luxury brands and niche products, Murale employs “beauty masters” with at least three years of “artistry” experience. The stores also house a spa where shoppers can undergo everything from antioxidant treatments to cellulite removal to facials. The philosophy, says spokesperson Tammy Smitham, is that “a customer’s basket size increases following a treatment.”

Continue…

Hard times? Not if you’re Shoppers.

By Jason Kirby - Thursday, September 25, 2008 at 12:00 AM - 0 Comments

What economic slowdown? As retailers across North America struggle to lure customers into existing stores, Shoppers Drug Mart, Canada’s largest pharmacy chain, has just released plans for a huge expansion. Last week, Shoppers announced it will open another 50 outlets over the next five years. This is the latest step in an aggressive push that has made the chain a rare bright spot in a dismal retail landscape. But is its particular mix of prescriptions, food and lipstick enough to fend off the bears?

Shoppers is a dramatically different drugstore than it was a decade ago. Under former CEO Glenn Murphy (now in charge of Gap Inc.), the company branched out into high-end cosmetics and groceries. The stores were redesigned and the company expanded from Central Canada to the West. Those moves helped give Shoppers the strongest bottom line in the industry—it now boasts a profit margin of more than six per cent, even as many other drugstore chains are in the red.

Since taking over in early 2007, CEO Jurgen Schreiber has kept his foot on the gas. Later this year the company will launch a new chain of beauty stores called Murale. And Shoppers aims to add to its 1,110 stores by pushing deeper into Western Canada. Interestingly, the plan is not to create new pharmacies, but to buy existing independent drug stores and put them in bigger new digs averaging 10,000 sq. feet in size.

Robert Gibson, an analyst with Octagon Capital in Toronto, says the strategy makes sense because there’s no shortage of real estate, but trained pharmacists with a long list of customers are hard to come by. The bonus is the larger stores allow Shoppers to sell more of the higher-margin cosmetics and beauty products that boost profits. It’s a strategy Gibson says should do well in a recession.

“I hate to say this, but I’m getting older, and older people need more drugs,” he says. “I don’t want to say they’re recession-proof. But there are some things you have to buy, like food, gas and drugs—while that new pair of shoes can wait.”