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Galen G. Weston, executive chairman of Loblaw Cos. Ltd., holds his son, Graydon Weston, with his father W Galen Weston at his side in Toronto on Monday at a news conference announcing Loblaw‘s takeover of Shoppers Drug Mart Corp. (Philip Cheung for The Globe and Mail)
Galen G. Weston, executive chairman of Loblaw Cos. Ltd., holds his son, Graydon Weston, with his father W Galen Weston at his side in Toronto on Monday at a news conference announcing Loblaw‘s takeover of Shoppers Drug Mart Corp. (Philip Cheung for The Globe and Mail)

What shoppers, analysts think about Loblaw deal Add to ...

Loblaw Cos. Ltd. struck a $12.4-billion deal for Shoppers Drug Mart Corp. Monday, unveiling the proposed marriage of Canada’s biggest grocer and largest drug store chain. We surveyed shoppers, analysts and observers:

“I’m hoping they will make Shoppers more inclusive as far as a range of products, but it probably won’t change my habits. I tend to shop at more locally independent grocers so my concern is what it’s going to do to smaller independent pharmacists and grocery stores. It will begin to erode the smaller community independently-owned businesses.” Barbara Evans, university professor

“Clearly this is a transformational deal for the Canadian retail landscape, and provides a strong return for Shoppers shareholders that were otherwise faced with a few more years of punitive drug price reform and limited earnings growth. It is not impossible that another bid could emerge. A $300-million break fee is in place, and Loblaw can match any new bid, but Shoppers is a premium asset with significant scarcity value and is the only potential target that would give an acquirer an immediate national presence in the Canadian pharmacy sector.” Perry Caicco, CIBC World Markets

“I don’t care as much about the strategy behind it but if I could go somewhere and get groceries and Shoppers products in one go then I think I’m okay with it. Especially if they’re open 24 hours. It’s more access, more convenience.” Emma Sharpe, magazine editor

“I think this is the perfect move for [Loblaw] – they get to shore up pharmacy where they are weak, leverage Optimuum, another weak area of their business, [and] provide [Shoppers] with a viable food offering. (Blindingly obvious). Little downside to the consumer – in terms of the consolidation play as competition will keep pricing sharp. The real opportunity is to launch hybrid stores – focused on the consumers relentless pursuit of the fountain of youth.“ Tony Chapman, chief executive officer, Capital C Partners

“I think this will make the market more competitive. Loblaws has more buying power than Shoppers so I think we’ll see better prices and service as a bigger company, a more full-fledged one-stop shop.” Dinesh Patel, maintenance technician

“I think we’re going to pay more than we’re normally paying right now. Prices will go up. They’re going to control the whole thing, set the price, and that’s it, we have to pay for it.” Jose Moreno, chef

“This is one of the smartest and well thought out acquisitions I have seen in years. The synergies that will be gained over time and the benefits in creating access to a convenience market is a substantial benefit to Loblaw and Shoppers Drug Mart. In addition, to the loyal customer base that Shoppers has this will further raise credibility to Loblaw pharmacy and make it more challenging for new entrants to acquire customers. When you consider all the other potential moves Shoppers or Loblaw could have made this makes the most strategic sense.” George Minakakis, retail veteran and author of Last Retailer Standing

“I just feel like you’re going to be able to go anywhere really, to get what you want.” Shauna Pittman, receptionist

“Today’s Loblaw/Shoppers Drug Mart is a significant Canadian business development. The four legs of the deal harnesses loyalty program expertise, financial services and Canada’s strongest food brand and Canada’s strongest drug store brand into a compelling business plan. Furthermore, the operating savings will likely be significant.. As provincial regulatory reform reaches a crescendo the timing on this move is also timely. As a result, this deal will likely trigger a number of ripples throughout the Canadian retail drug store industry.” Mike Jaczko, partner, K.J. Harrison & Partners

“I’m hoping Shoppers will carry No Frills (owned by Loblaws) products, which will make them more available, which is good. It will be convenient because some of the Shoppers stores are open 24 hours. So if some of the Loblaw store products are going to be available in Shoppers it might be good. I don’t think you’re going to find a whole grocery store in there but I think it’s good to have some of the Loblaw products available around the clock.” Anne Larkin, nurse, No Frills shopper at downtown Shoppers

“I shop in Loblaws and Shoppers a lot. It seems like Loblaws is always buying other businesses. Like the Chinese supermarket T&T, they already bought that one and they’re selling their product. And now they’re buying Shoppers so I’m worried about the price. Is it still competitive? It’s only my two cents.” Vivian Cheung, program manager

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