A steadily aging population and trend toward healthier living is making the pharmacy category look more and more appealing to grocers.
The impending arrival of U.S. retail giant Target and its promise to put pharmacies in as many stores as possible, is prompting other major players to follow suit.
Recently Loblaw, Metro and The Overwaitea Food Group have all announced plans to take over the pharmacy businesses from Zellers stores. (Last year Target purchased the store leases of 189 Zellers stores of which 39 were sold to Walmart.)
Target will close these stores during its conversion, which leaves a substantial existing pharmacy service to maintain and a great opportunity for retailers, says Stewart Samuel, senior business analyst at IGD. “It provides retailers with a good point of interaction with shoppers and a broader portfolio of health and wellness services to offer, especially with the aging population,” he says.
Dean Miller, vice president of pharmacy operations at Loblaw, says the acquisition of Zeller’s prescription files firms up the connection between healthy lifestyle/wellness and food that is core to business. “The pharmacy is about sound advice and proper healthcare choices, and then within the same four walls you’ve got the grocery store that really brings home the concept of fresh food,” he says. “There are a tremendous amount of seniors in that [Zellers] group and certainly that one-stop shopping concept for them fits really well with us too.”
While pharmacies in grocery stores isn’t a new trend, it’s one that’s going to keep growing, says retail consultant Ed Strapagiel, executive vice president of KubasPrimedia. “Pharmacy is another battlefront for the grocery business—another way to bring in new customers,” he says. “When an opportunity like [Zellers] comes up to get this group of people the potential is great.”
Meanwhile, Target is planning on providing its own “made for Canada” pharmacy franchise model and is currently recruiting franchisees online.After consulting with patients and pharmacists coast to coast about what they want in a pharmacy, the company says the new model will put a heavy emphasis on patient care and professional services, such as disease screening and medication management.