Loblaw Companies, Ltd.
Market Position and Strategy Overview
Market Position and Strategy Overview
Loblaw Companies is a public company that was incorporated in 1956, though its earliest origins are as a family-owned self-service grocery retailer that opened in Toronto in 1919 under the name Loblaw Groceterias.
It has more than 2,500 retail locations under 22 banners (including Loblaws, one of the banners of Loblaw Companies) across Canada, with 59.5 billion Canadian dollars in total sales for 2023. It’s the nation’s largest retailer.
And it also operates a financial services segment.
Its retail arm consists of corporate and franchise-owned retail locations, food locations and associate-owned drugstores. It includes in-store pharmacies, health care services, other health and beauty products, apparel and other general merchandise.
The financial services segment provides credit card and everyday banking services, insurance brokerage services, telecommunications services and the PC Optimum loyalty program. The loyalty program underpins the businesses, and provides more than 1 billion Canadian dollars in annual rewards.
Loblaw further breaks down its retail business into retail and financial divisions:
Retail
- Market: Includes banners such as Loblaws, Your Independent Grocer, Atlantic Superstore, Zehrs, Provigo, Real Canadian Superstore, Real Canadian Wholesale Club, Real Canadian Liquorstore, Fortino’s and T&T Supermarkets.
- Hard discount: Includes No Frills and Maxi. In recent years, Loblaw has been expanding its discount banners across Canada.
- Joe Fresh: Clothing and accessories for men, women and children.
- Shoppers Drug Mart: Canada’s largest pharmacy retailer, offering home healthcare, luxury beauty, specialty drug distribution, pharmacy services for long-term care and retirement communities, a health mobile application and an electronic medical records platform. It also manufactures generic drugs and provides outpatient physiotherapy, massage therapy, occupational therapy, chiropractic, mental health and other ancillary rehabilitation services.
Financial
- PC Financial: Financial products, including the PC Mastercard, PC Insiders World Elite Mastercard (introduced in 2023), PC Money Account. More than 2.4 million cardholders have earned PC Optimum points which can be redeemed for groceries, beauty, gas, apparel and more. Its services arm offers The Mobile Shop, The Gift of Choice gift cards, and PC Insurance (home and auto).
Loblaw’s motto is to help Canadians “Live Life Well,” which centers around the company’s three strategic pillars: delivering retail excellence, driving growth and investing for the future.
The company actively works to improve its retail operations and offer distinctive products, leveraging its scale and national logistics infrastructure to lower costs. Retail operations boast more than 1 billion customer touchpoints annually and a unique customer experience driven by private labels, healthy alternatives, a choice of in-store shopping, and pickup and delivery. A broad fresh food selection, competitive pricing and customized assortments across banners are also key to its differentiation strategy.
The company’s strategic growth initiatives are designed to help it stand out; generate competitive advantages in products, services and price; improve operational efficiencies; and personalize customer experiences.
Leveraging data-driven insights and scaling efficiency throughout the entire path to purchase is key to its goals. The company is committed to continuing to modernizing and automating its supply chain and growing its retail network. It uses technology and analytics to serve customer needs and wants, and uses data products and services, including its agile framework, artificial intelligence and machine learning programs, and continued expansion into the cloud to improve customer experiences.
Also, Loblaw aims to embed environmental, social and governance (ESG) initiatives in everything it does, primarily through fighting climate change and advancing social equity.
Merchandising
Merchandising
The grocery stores (Loblaws, etc.) offer standard supermarket fare with a familiar supermarket layout. Common food categories are represented: Dairy and eggs, pantry staples, meats, fish & seafood, snacks, frozen, deli, bakery, prepared meals, cleaning products and health & beauty.
Some banners place added focus on seasonal offerings ranging from produce to spring cleaning or grilling products. National brands may be represented, both in-store and online. (A microsite on Loblaws.ca, for example, takes browsers to a Frito-Lay brand page featuring summer snacks.)
Shelf talkers, floorstands, pallets, dump bins and sidekicks aren’t unusual. A fair amount of space is devoted to promoting Loblaw’s own brands, but national brands land on endcaps or in displays as well.
Loblaw also has a Hit of the Month, one of its largest promotions. Often several banners devote floor space to showcase a new item or everyday essential at a discounted price. In April 2024, Loblaw retailers stocked Feastables from MrBeast, making the YouTube star's candy bars available for the first time in Canada.
Stores also tend to stock several other categories, including home decor, household essentials, pet products, toys and games, electronics and batteries, some Joe Fresh apparel and accessories, plus lawn and garden.
Some stores have banks, wine cellars, floral departments and Starbucks kiosks.
T&T Supermarkets differ slightly from the pack. They carry many of the same categories one would find in a standard North American grocery store but Asian products dominate (though they are not exclusive; a shopper can still pick up Lay’s potato chips or Coca-Cola, for example). T&T shoppers will find produce, premade foods, seafood, snacks and health & beauty, but with some key differences (at least to the typical Western shopper): Sushi options are plentiful, produce selections cater to the Asian consumer, and the seafood departments tend to have live seafood options (lobster, crab, green bass).
The No Frills and Maxi banners are truly no frills. They, too, boast many categories typical of supermarkets and do carry some name brands (Pepsi, Coca-Cola, Dr Pepper, for example), but much more space (including endcaps, displays, dump bins) is devoted to Loblaw’s private labels (especially No Name: A shopper will come across wide swaths of the brand’s minimalist yellow packaging).
Signage touting the banners’ commitment to low prices are plentiful throughout the stores.
Shoppers Drug Mart’s merchandise fits right in with a standard beauty and wellness store. Haircare, skincare and beauty include both drugstore (CoverGirl, e.l.f., Maybelline, L’Oreal) and high-end options (Lancome, Dior, Clarins, Kiehl’s). Floorstands, side racks and endcap spaces are often devoted to new products. It also spotlights “Thoughtful Choices at Shoppers Drug Mart” products. For a beauty or skincare product to qualify, it must meet at least one of two criteria:
- No animal testing, plus it needs to be formulated without ingredients such as parabens, phthalates, formaldehyde, etc., and/or
- Packaging contains at least 30% recycled content, has recyclable packaging or refill options.
Shoppers Drug Mart locations also carry greeting and gift cards, small toys and medical supplies (knee braces, bandages, etc.). The bulk of the store is devoted to being a drugstore (as in wellness, medical, cosmetic, hair and skincare), but shelves also stock Joe Fresh accessories, pet food, cleaning supplies, paper products, snacks, refrigerated items (cheese, juice, dairy, salads, deli meats, prepared foods), produce, nuts, breads, pantry items and some frozen products, typically catering to quick fill-in trips.
Store Formats/Growth
Store Formats/Growth
Loblaw operates 2,455 stores. In 2023, it opened 23 food and drugstores, and closed 12. In recent years, the company’s overall store counts have ticked up slightly: In 2022, the retailer operated 2,444 stores; in 2021, it had 2,441. Also, in 2022, it opened 13 food and drugstores, and shuttered 10. For 2024, the grocery giant plans to open 40 new stores and convert dozens, most to the hard discount format.
There are 569 corporate stores, 535 franchise locations and 1,351 associate-owned drugstores. Company-wide, the average corporate store size runs 63,800 square feet; franchise stores are 31,400 square feet, and associate-owned drugstores average 14,100 square feet.
Loblaw operates more than 20 banners which fall under several divisions, including:
Market
Centered around consumables, this division includes the majority of the banners, which follow a typical supermarket model in terms of layout and merchandise. Many have additional departments and services, including banking, photo labs, Starbucks kiosks, flower shops and pharmacies. Banners include:
- Loblaws and Loblaw City Market
- Your Independent Grocer (primarily throughout northern Ontario, but is expanding into Western Canada)
- Atlantic Superstore (in the Maritimes of Nova Scotia, New Brunswick and Prince Edward Island), operates under the Atlantic Wholesalers division of Loblaw
- Zehrs
- Provigo and Provigo Le Marche
- Real Canadian Superstore, Real Canadian Wholesale Club, Real Canadian Liquorstore
- Fortino’s (primarily in the greater Toronto area)
- T&T Supermarkets (which focus strongly on Asian merchandise)
Hard Discount
A newer division, focusing on making life’s necessities more affordable, includes:
- Maxi, with approximately 150 stores in Quebec. Offers a full range of groceries as well as household, beauty and baby products in a standard supermarket format. Its focus is on low prices, including “crazy prices of the month,” typically a handful of national brands and private labels marked down.
- No Frills has approximately 250 franchise stores across Canada, with many carrying the owner’s names (Nadim’s No Frills, Kevin’s No Frills, etc.). Like Maxi, it sells groceries plus beauty, baby and home products as well as some electronics (telephones, cameras). It focuses on low prices and rotating deals on both store and national brand items. In 2024, Loblaw opened its first small-format store in Toronto.
Joe Fresh
Joe Fresh products are sold in many Loblaw banners (including at approximately 1,300 Shoppers Drug Mart locations) as well as online via its eponymous website. The brand encompasses apparel, accessories and footwear for men, women, children and babies, as well as gender-neutral options. Besides being sold at several Loblaw banners, there are seven freestanding Joe Fresh stores.
Theodore & Pringle Optical
In addition to pharmacy and some medical services, some Loblaw banners have optical services in the form of Theodore & Pringle Optical. There are 177 located throughout Canada including in Loblaws, Zehrs, Real Canadian Superstore, Atlantic Superstore, Dominion, and Your Independent Grocer stores. Frames stocked include Loblaw’s own brand Joe Fresh as well as Lacoste, Ray-Ban and others.
Wellwise by Shoppers
Wellwise by Shoppers primarily sells health and wellness products and focuses heavily on helping Canadians hold on to their independence as they age. There are 42 in Alberta, British Columbia and Ontario, with the majority located in Ontario. Stores are typically adjacent to or in the same shopping complex as a Shoppers Drug Mart.
Besides fitness and nutrition products, it also sells incontinence, ostomy, CPAP equipment, sleep aids, health monitors, pain management, electronics, canes, wheelchairs, scooters, among other products aimed at the mature consumer. Services it offers include CPAP and sleep therapy, in-home consultations, professional fittings, rentals, technical support and repairs. It also ships products and helps secure funding assistance.
PC Financial
PC Financial offers credit cards and banking services (including digital banking), and mobile and insurance plans. There are more than 750 ATMs across Canada, typically near a Loblaw banner or inside a Loblaw store.
E-Commerce
E-Commerce
Loblaw continues to invest in modernizing and automating its supply chain, which includes 4,000 vendors and 27 distribution centers. For 2023, its e-commerce revenue amounted to 3.3 billion Canadian dollars, an increase of 10.7% from the year before. For 2024, it plans to invest approximately 2 billion Canadian dollars into its store network and distribution centers.
Loblaw’s banners are shoppable via their respective websites, as well as through its PC Express click-and-collect and delivery service. Most banners can be shopped via the PC Express mobile application. Shoppers Drug Mart also has its own app. Both PC Express and Shoppers Drug Mart apps are available via iOS and Google Play. Joe Fresh has an app, only available on iOS. There is a PC Optimum app as well, where customers can manage their offers and rewards.
PC Express delivery coverage is 60% nationwide, so delivery and pickup availability varies.
PC Express delivery costs also vary depending on how quickly customers need their groceries. (There is a service fee — numbers are in Canadian currency — in addition to delivery fees as the retailer has its own personal shoppers.)
- Priority: 2-hour delivery, $13.99 ($8.99 delivery fee, plus $5 service fee)
- Same day: $9.99 ($1 service fee plus $8.99 delivery)
- Next day: $5.99 ($4.99 delivery plus $1 service fee)
Curbside pickup is an option, as is in-store and self-serve pickup.
An annual PC Express Pass costs $99.99 a year, or $9.99 a month. There is no pickup or delivery fee on same-day and future orders of $35 or more for pass holders. Loblaw recommends the pass for shoppers who prefer delivery, unlimited free pickup and delivery on orders of $35 or more, and those who want to earn points on eligible offers.
A PC Express Rapid Delivery option — 30 minutes or less — is available at approximately 800 stores, via a partnership with DoorDash. Shoppers can shop the DoorDash Marketplace app and select PC Express Rapid Delivery or shop PCExpress.ca.
Priority orders pay a $3 pickup or delivery fee for orders (instead of the standard $5 fee that’s part of the $13.99 delivery for those without an express pass), or an extra $4.57 fee on rapid delivery.
Those who subscribe to a PC Express Pass or start a free trial are automatically opted out of their PC Optimum Insiders subscription. (See Loyalty Programs.) Loblaw recommends the Insiders subscription for those who prefer pickup, want to earn points by buying President’s Choice products, and shop online with Joe Fresh and Shoppers Drug Mart.
Customers can also order via DoorDash from several Loblaw retailers or through PCExpress.ca. DoorDash subsidiary Rapid Retail Canada is the retailer operating under the PC Express Rapid Delivery brand.
Instacart delivery is available in some areas as well.
Retail Media
Retail Media
With retail media accounting for 1-in-5 digital ad dollars spent in Canada in 2023, Loblaw that same year launched its own retailer media network, Advance powered by Loblaw.
The network merges key capabilities across its full enterprise, including PC Optimum sales, Loblaw Media, Loblaw Data Insights & Analytics subscriptions, and Consulting Services to create a single entry point for brands to optimize efficiency in business planning and spur data-driven outcomes.
“This holistic approach to planning and execution will allow brands to better integrate loyalty tactics, omnichannel media touchpoints and insights to develop effective retail and marketing plans that inspire customers at the right time, in the right way,” according to a Loblaw media release.
Through more than 1 billion yearly transactions across Loblaw’s nearly 2,500 stores, 10 million-plus unique monthly visitors to Loblaw’s digital platforms and the retailer’s loyalty program, the network is designed to help brands build and execute omnichannel strategies.
The key capabilities of Advance powered by Loblaw include:
- PC Optimum: The loyalty program has nearly 16 million active members, enabling brands to directly connect with customers through offers and incentives.
- Omnichannel media: The retailer has an extensive network of omnichannel consumer touchpoints across:
- in-store media (screens, audio, product samples),
- off-site media (programmatic and social media), and
- onsite media (Loblaw websites and apps).
All three are tied to closed-loop measurement, enabling marketers and brands to see the impact of their campaigns. (See more, below.)
- Retail analytics: Partners can use retail analytics and insights capabilities to manage their overall Loblaw dealings. This includes Loblaw Data, Insights and Analytics (LDIA), a self-serve retail insights platform, and Consulting Services, Loblaw’s in-house experts who help construct customized analyses and strategies to serve their retail partners.
- Ad technology: Ad tech development and data science & engineering capabilities to advance marketing solutions and scale measurement solutions.
In July 2023, Loblaw brought more than 500 in-store digital screens to the front of stores, running six-second spots for Loblaw’s own promotions as well as those of outside brand partners. That followed a spring 2023 launch of 275 screens through a partnership with General Mills Canada and Procter & Gamble. Screens were placed in the highest traffic Real Canadian Superstores, Loblaws, Maxi, Zehrs, Your Independent Grocer and Atlantic Superstore locations. The signage was made available through Loblaw’s Managed Service Solutions, but going forward it will be powered through MediaAisle, Loblaw’s demand side platform.
Loblaw also works with the Canadian Out-of-Home Measurement Bureau, getting certified to provide verified impressions of user traffic to its vendor partners.
In August 2023, Loblaw launched in-store audio advertising, bringing Stingray Advertising's retail network into nearly 200 Loblaw stores, including Loblaws, Zehrs, Real Canadian Superstore and others.
Private Label
Private Labels
Loblaw has several private labels, which it refers to as control brands, most prominently its President’s Choice, No Name and Farmer’s Market options, which are among three of Canada’s top 10 brands, according to Loblaw. A heavy part of the retailer’s strategy lately is helping customers save money. Broken down further:
- President’s Choice: Encompasses thousands of products, including fresh and prepared foods, dairy, frozen food, breads, cereals, rice, drinks, snacks, pet foods and supplies, baby products, bath and body care, cleaning and household supplies, laundry products, paper and office, and other general merchandise. President’s Choice Financial encompasses financial services. President’s Choice also has several subcategories:
- PC Black Label: Marketed as premium, with sauces, spice rubs, olive and nut oils, pastas and pizzas.
- PC Blue Menu: Frozen meals, seasonings, canned goods, juices, beverages, fresh meats, breads, salad kits, pasta sauces.
- PC Free From: Fresh and processed meats free of antibiotics.
- PC Nutrition First: Cat and dog food and treats.
- PC Organics: Includes fresh produce, juices, eggs, dairy products.
- PC Plant Based: Meat-free alternatives.
- PC Splendido: Italian fare, including cured meats, jarred sauces, cheeses, olive oil, pasta.
- Everyday Essentials: Storage, cooking utensils, small appliances, bedding, office supplies and more.
- No Name: Household essentials and groceries in no-frills packaging.
- Farmer’s Market: Baked desserts, breads, fresh produce, snacks.
- Joe Fresh: Apparel and accessories for men, women, children and babies.
- Life at Home: Home decor and household items.
- Life Brand: With more than 1,400 products, includes skincare, oral health, pain management, personal hygiene, allergy relief and more.
- Quo Beauty: Cosmetics, hair accessories, personal care items.
- Rooster: Asian products, including grains, pantry items, refrigerated items (tofu) and produce.
- SeaCrave: Flash-frozen seafood.
- Suraj: Central Asian ingredients.
- Sufra: Halal products.
- T&T: Asian fare across several categories, including frozen, beverage, canned, desserts and more.
- Ziggy’s: Processed meats, pasta, cheese.
Loyalty Programs
Loyalty Programs
PC Optimum is Loblaw’s loyalty program — Canada’s strongest, according to the company.
It continues to enhance the program with personalized offers and more targeted promotions to strengthen customer loyalty.
All locations offer the PC Optimum cards, available for free at checkout. Customers can then register their account at PCOptimum.ca or via the PC Optimum app (which also holds a digital version of their loyalty card), and get member-only pricing.
Members earn 1 Canadian dollar for every 1,000 points spent, and Loblaw says loyalty members can save approximately 10% on their grocery bills.
There is a paid subscription program as well, PC Optimum Insiders.
Those who subscribe to a PC Express Pass or start a free trial are automatically opted out of the PC Optimum Insiders subscription. (The latter costs 119 Canadian dollars a year, plus applicable tax.) Loblaw recommends the Insiders subscription for those who prefer pickup (free PC Express is available at 700-plus locations) and who want to earn 10% back in points by buying President’s Choice products and shopping online with Joe Fresh and Shoppers Drug Mart.
A PC Insiders World Elite Mastercard is another option. Cardholders receive a complimentary PC Express pass. Extra Optimum points are earned at participating stores. Fuel purchases, qualifying travel and Shoppers Drug Mart purchases also earn extra points.