As it grapples with profit-pinching drug reforms, Shoppers Drug Mart Corp. is pushing into financial services to help boost business.
Shoppers has teamed up with Royal Bank of Canada to launch a co-branded loyalty debit card and bank accounts, starting March 17. It will offer enhanced Shoppers Optimum rewards, unlimited debit transactions, a $10.95 monthly account fee and 300 new ATMs in Shoppers stores.
Shoppers is the latest among retailers to put a spotlight on financial services in a bid to draw more customers and win their repeated visits. Late last year, grocer Sobeys, a division of Empire Co. Ltd., partnered with Bank of Montreal to offer discount banking services, including no-fee accounts. Loblaw Cos. Ltd., the country's largest supermarket retailer, is focusing more than ever on its PC Financial program to woo consumers.
Still, merchants risk getting distracted from their core business in branching out too far afield: Canadian Tire Corp. in the past couple of years has scaled back its banking services, fearing it was taking its focus away from the store shelf.
Even so, Shoppers Drug Mart, which already partners with Bank of America Canada to offer a MasterCard rewards credit card, will look at stepping up its financial services even more, said Jim Noteboom, senior vice-president of business analytics and financial services at the country's largest drugstore chain.
"We want to be engaged with our existing customers, but we also would like to see if we can acquire new customers for Shoppers," Mr. Noteboom said in an interview.
While Shoppers isn't looking at applying for a bank licence, as Canadian Tire did, the drugstore chain is studying expanding into other banking services, including insurance, he said. "We do not rule out anything."
With the new debit card, Shoppers customers will earn 10 additional Shoppers Optimum points for every $1 spent at the stores using the account, in addition to the points earned using the card. As well, they can earn one point for every $1 spent outside Shoppers using the account.
In contrast, customers using the MasterCard Optimum credit card earn 15 additional points for every $1 spent at the stores.