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Loblaw’s drugstore business, Shoppers Drug Mart, has started to offer same-day delivery through the company’s partnership with Instacart.

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We review Metro Inc.’s second quarter results and progress with the integration of drugstore chain, Jean Coutu.

Solid gains in food with same-store sales up 4.3%

Metro’s second quarter sales increased 27.7% to $3.7bn, reflecting the acquisition of drugstore operator, Jean Coutu. Excluding this, sales were up 4.0%. The retailer’s food same-store sales were up 4.3%, with pharmacy same-store sales up 1.1%. The growth in food sales was supported by higher inflation, accelerating to 2.5% in the quarter, stronger customer traffic and volume gains. Alongside the strong growth in sales, the retailer saw net earnings increase 13.7% to $121.5m.

Source: IGD Research

Rationalising the store network

Metro is on-track to launch its grocery ecommerce offer in Ontario before the summer. It is using the same store-pick model that has been developed in Quebec, undertaking all aspects of fulfillment in-house. The retailer also accelerating plans to rationalise its store network. It plans to convert, relocate or close 12 stores to better meet customer needs and reduce operating costs. Most of these will be undertaken in the Ontario market, with supermarkets converted to its Food Basics discount format.

Change in leadership for pharmacy business

The retailer also announced a change in leadership for its pharmacy division, the Jean Coutu Group. Effective May 31, François Coutu will retire as president, to be replaced by Alain Champagne. Champagne joins Metro from Optimé International, where he holds the CEO position. He has previously served as president at McKesson Canada and held various executive roles with Frito Lay Canada and Procter & Gamble.

Confident om achieving cost synergies

He takes over as the integration of the business into the wider Metro group continues. As it approaches the first anniversary of the acquisition, it has reached a run-rate of annualised synergies of $50m. The pace of synergies will slow moving forward, as it completes the work on procurement, and shifts its focus to integrating retail systems and distribution facilities. Metro plans to adapt the Jean Coutu automated facility in Varennes to also supply its Brunet drugstore network and adopt the Coutu POS and lab platforms for the Brunet business.

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WH Smith partners with Well Pharmacy to launch pharmacy format at Gatwick airport.

A one-stop-shop for those on the move

Following successful trials at Southampton and South end airport, Stationary specialist, WH Smith, has partnered with Well Pharmacy to launch a new pharmacy format at Gatwick airport.

The 5,000 sq.ft store located at Gatwick's North Terminal will maintain its standard range proposition, but customers will now benefit from a licensed pharmacy and range of 2,500 health and beauty products.

Range expansion offers a one-stop-shop for travel necessities and provides a more convenient solution for time-pressed people on the move.

The move follows the success of the retailer's larger format stores at key travel hubs including Heathrow, Gatwick and Birmingham airport.

The news comes as WH Smith announces its half year results, achieving sales growth of 8% to £695mn for the six months to 28th February 2019.

The result was boosted by the retailer's travel business, consisting of over 400 stores positioned at key travel hubs such as airports, train stations and motorway service sites.

 

Want to know more?

Retail Analysis subscribers can read and download our latest insight on WH Smith here.

Retail Analysis subscribers can read and download our Well Pharmacy store visit here.

 

 

 

Today Primark opened the doors to its largest ever store.  At 161,000 sq ft over five floors, the store in Birmingham officially entered the record books as the world's largest fashion retail store.

More than fashion

The UK's 187th Primark offers shoppers much more than just the latest fashions at affordable prices.  The store includes a hair and beauty salon and barber shop concessions in partnership with renowned experts, as well as three restaurants, two coffee kiosks and a custom t-shirt printing lab.  One of the new restaurants is a Disney cafe featuring interactive tables for children, whilst 'The Mezz' offers on-trend food including hand-stretched pizzas, fresh salad and burritos, and Primarket Cafe provides all day coffee shop options.

Increasingly retailers like Primark are using retail spaces in creative ways to offer shoppers experiences that cannot be replicated online.  Foodservice plays an important part in this development.  Recent years have seen Next partner with celebrity chef Gino D'Acampo to open an Italian restaurant in the brand's Manchester store, whilst H&M launched the instagram-friendly It's Pleat cafe in four international locations, including London's Westfield shopping centre.  In their latest store, Primark have partnered with contract caterer Aramark to develop the food offering and have employed a general manager to oversee operations across the three restaurants.

But it's not all about food. In-store services, like the beauty salon and barber shop in Primark's new store, are something we're seeing other retailers, notably drugstore operators, use to drive footfall. They offer a point of difference versus online and in a massive experiential store like this fit well with younger shoppers’ desire to play and experiment in beauty too.

(Retail Analysis subscribers can see more examples of  how retail stores are exploring health and beauty here)

Succeeding on the high street

As big names such as BHS, House of Fraser and Debenhams hit the headlines for their decline, Primark appears to be going from strength to strength. Its model is different to other UK fashion retailers and department stores: it spends nothing on advertising and has no online presence.  However its positioning as 'fast fashion' is clear and shoppers know what they are going to get from its products . By ensuring its customers have to go in-store to buy, the brand benefits from impulse purchases.  Whereas other department stores have been criticised for lacking investment and innovation, Primark's latest store shows that it is willing to invest in 'experience retail' to offer shoppers more reasons to visit, and stay, in its stores.

Presentations

16/04/2019
We showcase some of the best food stores to see in Toronto, highlighting retailers' investments in fresh and prepared foods, food-to-go, health and wellness and meeting the needs of one of the most ethnically diverse populations globally.
16/04/2019
Clarins’ immersive mobile pop-up showcases its new clean beauty skincare range, My Clarins. The tour runs in the US from 30th March – 11th April, with stops at university campuses and events between Chicago and Phoenix.
27/03/2019
Health and beauty specialist, Douglas is trialling a new premium, service-led format in Germany. See how the retailer is innovating to transform its stores into experience touch points with its #FORWARDBEAUTY strategy.
12/03/2019
We visit Well’s newest store concept designed to improve the customer experience.
View all presentations

Key Presentations

We explore must-see beauty stores in Paris, New York City and Seoul.

We review A.S. Watson’s retail outlook over the next five years and the key markets to watch, as it continues to expand around the world.

If you've developed an innovative, original small store (under 3,000 sq.m) we want to hear from you. 

We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Retail Analysis the most reliable and robust source available for data of this type. 

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