Players in the the Canadian retail scene are spoiling for a fight and we’re wondering how many Canadian companies will survive this battle. Entrants like Whole Foods and Target are creating new ripples in the grocery and pharmaceutical wars.
And where will these retailers source their products from?
Imagine that the storm of competition is actually an opportunity for your company. What if your brand and products could be a star, key differentiator for them? If your product was on their shelves, would it give them an edge on their many competitors?
When companies merge, diverge, or rebrand anything, there may be a window of opportunity to win a spot on their shelves.
Shoppers Drug Mart Now Part of Loblaws
Shoppers Drug Mart, Canada’s homespun success story, located nearby in North York, has launched a new rebranding effort for its LIFE brand products. The rebrand covers redesigning the logo and repositioning it, upgrading labelling, and a few, primary paperboard packaging changes.
As you can see in the figure below, the labeling does make it easier to see what the product is, with a real size pic of the item (In this case vitamins) and the background colour is a little easier on the eyes, calming, sophisticated yet easy to comprehend. It’s just a tad further away from the stark white, minimalist theme they’ve had for quite a while.
What’s the Secret to Redesigning Packaging?
New colours, new taglines, fonts, and layouts. The new branding makes the product look more expensive, or at least of greater value and it fits better within Loblaws own brand lineup. We’ll see what happens to pricing soon.
The new LIFE brand vitamin products have a great reputation and should fare well against Swiss brand vitamins and Jameson vitamins. The health and wellness sector will continue to grow strong and LIFE brand will compete well. Loblaws could decide to invade the European market, as well as the US. Good time to consider such expansion.
5 Keys to Successful Rebranding Do you need to rebrand?
Battling Goliath Retailers from the US
Loblaw’s, the Canadian giant supermarket chain contolled by the Weston family bought Shoppers Drug Mart for about $12 Billion this past summer. The deal allows Shoppers brand lines to be sold within Loblaws 70+ locations across Canada. And in turn, Loblaws will get a new presence in one thousand Shoppers Drug Mart store locations. Great situation for both. Local convenience stores and small grocers could face a challenge in local neighbourhoods.
The joint company would have revenues of excess of $42-billion and annual cash flow of $1-billion. The deal is expected to yield annual savings of $300-million by the third year. The combined retailer would have 2,348 stores and 1,797 pharmacies. From the Financial Post.
Entrepreneurial opportunities with manufactured products should look at this period of instability as a chance to re-position or reintroduce to Loblaws, if you haven’t already.
Competition in the supermarket segment is fierce with Sobey’s, Whole Foods, Metro, Walmart, Target, Costco and Freshco all invading the Canadian grocery market. Sobey’s just completed buying 200 Safeway stores in Western Canada.
Loblaws acquisition was said to be a direct assault on Austin, Texas-based supermarket chain Whole Foods Market Inc. Whole Foods new store in Downtown Markham has a very exciting layout with new brands and a higher price point. They’re betting the atmosphere of the stores is enough to win the hearts and minds of consumers. It may just do that. It is certainly a different environment for POP.
Loblaws is testing a new retail concept called Nutshell Live Life Well, a stand-alone franchise catering to health-conscious consumers. An extended battle with Whole Foods may invite a frontal assault on their own backyard.
Eagles are circling above the border. Loblaws had to act quickly as US owned Walgreen’s was apparently interested in buying Shopper Drug Mart too.
“Target’s just the start of U.S. retailers massively moving into Canada,” says Alan Middleton professor of marketing at York University. “So there is a much needed strengthening of the major retailers here in order to survive. This one is a nice fit.”
Is Loblaws Eyeing the US Market?
The merger of Shoppers and Loblaw’s was being discussed for over 3 years, so it’s not a sudden tactic. This was well conceived and a smart move to maintain and grow market share in the Canadian market.
But why stop there? If and when the market is culled in the next few years, Loblaws will be powerful enough to merge with a US grocer or enter the American space themselves. The European free trade agreement might mean Europe is next to venture into. A market bigger than the North American market is too inviting. It’s an era of big deals, and Loblaws/SDM deal is certain evidence of that.
I Predict Shoppers Drug Mart Sales Will Soar Further Upward
SDM shoppers will adjust to the new labelling/rebrand and we’ll see increased sales volume within Loblaws stores. Walmart and Rexall could conceivably manage their own deal and erode their marketshare.
The key goal in this deal however was to get Loblaws food into 1000 new local neighbourhood locations. Distributors who serve the convenience store market are bound to be hurt by this.
For the new Loblaws, the acquisition also spawns a new sense of purpose mission, and possibilities. That will encourage creativity, courage, and financing, to move ahead with leading edge marketing. With the marriage of Loblaws and Shoppers Drug Mart, the new company will have greater commitment to making this a big success. Companies don’t bind together without some greater purpose.
But then comes the usual danger: acquisition by a big foreign corporation. Remember Canadian Tire and Molson’s? Do you think history will repeat itself?
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Find out more about the advantages of corrugate packaging, and contract packaging companies are becoming a key part of the value added channel. Is you’re packaging memorable? Maybe it’s time to give your brand and packaging a lift.