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The retailer bought into Maple, a Toronto telemedicine provider, after its Shoppers Drug Mart chain partnered with the company to offer virtual consultations as COVID-19 spread throughout Canada. (The Logic)

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Talking point: An industry source told The Globe and Mail the retailer purchased 20 to 25 per cent of Maple, which has a staff of 70 and annualized revenue of about $25 million. Shoppers president Jeff Leger said telemedicine “really became a critically important way of accessing care” during the pandemic and believes “there is a meaningful change, a tipping point in terms of how health care is accessed in Canada.” Loblaw started investing in health care with the purchase of Shoppers in 2014, and more recently the $170-million purchase of electronic-medical-record firm QHR in 2016.

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The Loblaw subsidiary launched a no-monthly-fee bank account linked to its loyalty program. It marks PC Financial’s first move back to everyday banking since it and CIBC severed ties in 2017. (The Globe and Mail)

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Talking point: The new account links to Loblaw’s PC Optimum loyalty program. The retailer merged two existing programs—Shoppers Optimum and PC Plus—in 2018, and it’s since grown it to some 18 million consumers. The new bank accounts will allow customers to earn loyalty points on every dollar they spend, online bill payments over $50, setting up direct deposit and other moves. PC Financial president Barry Columb said consumer research has shown customers want “rewards.” Building loyalty helps Loblaw retain customers and boost profits. It can also mine the data to deliver targeted ads, among other things.

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The grocery store chain is offering 15 different menu items through kits prepared by seven restaurants for next-day delivery across the Greater Toronto Area. Loblaw plans to eventually expand the program to include more restaurants in more cities. (The Logic)

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Talking point: Loblaw’s meal solutions unit, which focuses on prepared meal kits, has grown rapidly during the pandemic, said Nick Kuriya, vice-president of the division. “We’ve seen a massive increase in eat-at-home opportunities,” said Kuriya, who estimates the meal-kit space has grown 50 per cent since the start of the pandemic. Blue Apron, an industry leader, saw its monthly sales double in April compared to the year before, and rival HelloFresh expects full-year revenue growth of between 75 and 95 per cent. While Loblaw faces fierce competition in the sector from myriad companies, Kuriya said the firm’s advantage lies in part in the convenience of simply adding meal kits to a standard grocery order. “We’re meeting consumers where they’re at,” he said, noting that the products are in 200 stores in Ontario, Quebec and Atlantic Canada.

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Canada’s largest grocer is expanding its online marketplace beyond groceries. Third-party companies will be able to sell toys, baby items, pet products and furniture through the Loblaw website. (The Logic)

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Talking point: The company, which generated $46.7 billion in revenue last year, risks ceding ground to competitors that offer a menu of products and services. Amazon and Walmart are making headway among Canadian online grocery shoppers, according to a poll last year by NRG Research Group. The study found that 62 per cent of Canadians who buy their groceries online say they buy them on Amazon; 37 per cent via Walmart; and 23 per cent from Loblaws. Loblaw’s e-commerce sales last year topped $500 million after a major digital push that included a partnership with Instacart. It has also begun offering an Amazon Prime-style loyalty program, and this year expanded its online-grocery pickup to Toronto subway stations.

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The company’s net profits for the quarter ended October 5 were $353 million, up from $117 million for the same quarter in 2018. The jump was due in part to a tax-court ruling that resulted in a one-time charge of $367 million in last year’s third quarter. Revenues rose 2.3 per cent, from $14.3 billion to $14.7 billion. However, same-store sales, a key retail metric, increased just 0.1 per cent in its grocery stores. In its Shoppers Drug Marts, same-store sales grew 4.1 per cent, mainly driven by prescription sales. (The Logic)

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Talking point: Customers placed fewer, but bigger, orders, consistent with how retail is increasingly moving online. Loblaw has invested in technology to compete with the likes of Amazon, partnering with grocery-delivery app Instacart and offering same-day pickup for members of its new Amazon Prime-style PC Insiders program. The company cited investments in its digital strategy among reasons for its $7-million dip in earnings before income taxes. It’s banking on those investments eventually paying off, noting the potential “failure to execute the Company’s e-commerce initiatives” as a key risk to its financial results going forward.

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The federal watchdog determined that Loblaw failed to tell customers applying for the $25 vouchers that they could redact information like birth dates, driver’s licence numbers and photos of themselves. Loblaw initially collected that information, but stopped partway through. The privacy commissioner is not asking the company to do anything further to address the issue. (The Logic)

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Talking point: The grocer voluntarily offered the gift cards after it received immunity for cooperating in a Competition Bureau investigation of alleged collusion to raise bread prices. The antitrust agency has been criticized for its decisions on Loblaw and for the size of its fine of Volkswagen in the diesel-emissions case; in a recent interview with The Logic, competition commissioner Matthew Boswell noted it was not involved with the gift card program and is constrained by the legal limits on the monetary penalties it can issue. The privacy commissioner’s fining powers are similarly limited, though in May, the government proposed to expand them in a discussion paper on reforms to Canada’s consumer privacy law. But Loblaw isn’t entirely done with the issue—it still faces a $1-billion class-action lawsuit over the alleged bread price-fixing.

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The company posted net earnings of $286 million in the three months ending June 31, down slightly from $293 million for the same period in 2018. Same-store sales at its grocery chains increased by 0.6 per cent, compared to 0.8 per cent in 2018’s second quarter. Subsidiary Shoppers Drug Mart grew the same metric by four per cent, its best quarter in three years. (Canadian Press)

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Talking point: Loblaw president Sarah Davis said the flat profits were caused by “overzealous” application of algorithms designed to increase margins on the products it sells, which led to fewer items being discounted in promotional flyers. Customers did spend more, but there were fewer of them—the average bill rose, while traffic to the stores fell. Loblaw started using data analytics in its discount division in the third quarter of 2018. Loblaw has been an early adopter of data analytics in Canada’s grocery sector. The company launched an online version of its previous PC Plus points program in 2013, a year before Canadian Tire created an app for its Canadian Tire money. And, Loblaw is now using data from its current PC Optimum program to deliver targeted ads for members who opt in.

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The Canadian grocer will offer items reaching the end of their shelf life that customers can order and pick up from a Loblaw store via Flashfood’s e-commerce app. Flashfood keeps an undisclosed cut of the purchase for itself. Loblaw began piloting the project last summer. This spring, it was expanded to 139 Maxi and Provigo stores in Quebec and, last week, to 37 Real Canadian Superstores in Ontario. The national expansion, announced Wednesday, will see it roll out to more than 250 stores by the end of the summer. (Globe and Mail)

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Talking point: This is the latest move by Loblaw to leverage digital solutions to compete with tech companies increasingly getting in on the grocery space. Over the past year, the company launched an Amazon Prime-style loyalty program for $99 a year and a pilot project aimed at using consumer data for targeted advertising. This program is part of Loblaw’s efforts to cut its food waste in half by 2020. In B.C., Loblaw has partnered with Second Harvest in supporting the expansion of Ontario-founded FoodRescue.ca—a free online platform which connects food retailers who wish to donate food products directly with social services and non-profit organizations—to B.C. Loblaw’s stores have already seen real success in using the Flashfood e-commerce app: the company said 150,000 customers have signed up, and 76 per cent of them use the app weekly. And, of all the items Loblaw puts on Flashfood, 77 per cent of them are sold.