"As a purpose-led organization, committed to helping Canadians live life well, we are proud to be taking a significant step on such an important environmental issue,” said Loblaw COO Robert Sawyer when the news became public. “Since 2007, our efforts to reduce the number of single-use plastic shopping bags leaving our stores has led to 13.8 billion fewer bags potentially going into landfill.”
Loblaw customers have already rallied around the reusable-bag approach. The adoption of a plastic bag fee led to a 70% decline in the use of plastic bags in its stores, and shoppers have turned to the iconic PC reusable bag and plastic bins as sustainable alternatives. As single-use plastic shopping bags are phased out systematically, province by province, customers will be supported with a variety of reusable alternatives as well as ongoing communications to raise awareness of the options available.
In March, Loblaw took another action on climate change with its plan to achieve net-zero greenhouse-gas emissions by 2040 as part of a host of environmental commitments.
As a fourth-generation family business since 1919, with the country’s largest network of corporate and independent grocery and drug stores, Loblaw is positioned to make an impact on these issues. This perspective has been fundamental to Loblaw’s approach to ESG priorities.
“Having met major milestones reducing our carbon footprint and waste, we are now squarely focused on the next challenge: net zero,” Weston said in the recent earnings call. “It will see us deploy electric trucks, efficient heating and cooling, alternative energy, and innovative methods ahead. The need for action is as clear as our ambition, and it reflects the long-term vision our company has held across generations.”
In 2016, Loblaw committed to a 30% reduction in corporate carbon emissions by 2030. The company met that target in 2020, due to its advancements in energy management, equipment conversions and addressing refrigerant leaks.
Retail Health Reimagined
Health and wellness is another key pillar of Loblaw’s ESG strategy.
The company connects its retail and health care businesses to help customers get well and stay that way. Its PC Health app provides virtual health care services through a network of care navigators, registered nurses, registered dietitians, physicians, physiotherapists and other allied health professionals. To date, there have been more than 820,000 downloads of the PC Health app.
The grocery chain has also performed more than 900,000 medication reviews to support improved patient health outcomes. Loblaw’s Wellwise by Shoppers platform is the largest Canadian retailer of home health care products and services, including medical devices and equipment, sleep therapy products, professional fittings for braces and supports, rental services, and in-home consultations. The company even retails medical cannabis using an e-commerce and mail delivery platform.
“I think what COVID has done, both for the Canadian consumer and then also for the public health care system, is it’s really helped everybody understand the complementary role that the pharmacists and the pharmacy can play on kind of basic health care delivery,” Weston noted during the earnings call.
In March, Loblaw said that it was acquiring Toronto-based wellness company Lifemark for $845 million in cash, adding that the acquisition will help grow its retail health business. The news came after Shoppers Drug Mart had teamed up with the company last year to offer online bookings for physiotherapy and rehabilitation services. Lifemark’s integration into the retailer’s PC Health app gave shoppers access to health professionals in 300-plus rehabilitation clinics, as well as the opportunity to earn PC Optimum points for completing an eligible initial assessment.
“Lifemark joins Maple and dentalcorp in a growing group of trusted service providers featured on the PC Health app that will help Canadians get the timely health care services that they need,” said Jeff Leger, president of Shoppers Drug Mart Inc., when the partnership rolled out. “PC Health users can now book virtual doctor appointments, find dental and oral care specialists, physiotherapy, massage, and other rehabilitation service providers.”
“In the first quarter, Pharmacy Services continued their multiyear expansion, a strong indication of the relationships patients continue to build with their pharmacists as convenient and trusted health care partners,” Dufresne said during the earnings call.
Looking ahead to the rest of the year, Weston said on the call that the company is “particularly encouraged by its discount division, which represents 60% of grocery sales.”
“Our hard-discount No Frills and Maxi stores are a bellwether for customers seeking value,” he observed. “This is an indication of the Canadian consumers steadily increasing focus on value. We see similar signs in the performance of our market-leading private label program.”
After President’s Choice, Loblaw’s No Name brand is the second largest in the country, and sales are at all-time highs.
“Yes, private label penetration is up above 30%,” Weston affirmed on the call. “It is growing notably faster than our non-private label products and programs. We’re kind of back to normal, or call it back to pre-COVID, price sensitivity, promotional sensitivity. But we’re watching it very carefully because prices are continuing to grow. Consumer behavior is shifting. It’s the usual things, smaller pack sizes, sensitivity to higher price points, all of that stuff.”