Feb. 20, 2025 "Loblaw takes PC Optimum charge in Q4 as more customers redeem loyalty points": Today I found this article by Rosa Saba on BNN Bloomberg:
Customers redeemed more than a billion dollars' worth of Optimum points in 2024, according to Loblaw’s annual report.
There are more than 17 million active Optimum users.
The strength of the program caused the grocery retailer to take a non-cash charge of $129 million in its fourth quarter that drove profits lower year over year,
as the company re-evaluated the program’s liability for outstanding Optimum points to reflect the higher use.
“We increased this liability based on our expectation that more customers will redeem more of their ... points going forward,” said chief financial officer Richard Durfresne on a conference call discussing the results.
“What it reflects is that more and more consumers are
liking PC Optimum,
are using it,
and so from our perspective
... we’re more than happy to do it because it reflects what’s happening in our stores.”
The parent company of Loblaws and Shoppers Drug Mart says its net earnings available to common shareholders amounted to $462 million or $1.52 per diluted share for the quarter ended Dec. 28.
The result was down from a profit of $541 million or $1.72 per diluted share in the fourth quarter of 2023.
Amid a looming trade war with the U.S. that could see import tariffs on both sides of the border, Loblaw has been highlighting domestic products in its stores as shoppers look to buy Canadian.
It also added a “swap and shop” feature to its loyalty app to help shoppers find Canadian products more easily.
The efforts appear to be paying off.
“As we continue to expand this feature, we are already seeing a significant uplift in sales (of) products identified as prepared in Canada,” said CEO Per Bank.
Loblaw is also monitoring how tariffs could affect prices on its U.S. products.
If Trump brings in tariffs
and Canada retaliates,
it may have to pay more for items it brings in from south of the border,
which would also put upward pressure on retail prices.
Less than 10 per cent of the company’s supply comes from the U.S.,
said Bank, with most of it being produce.
Canada is particularly reliant on produce imports in the winter.
“If tariffs are applied on produce, there’s where we will be mostly impacted,” said Bank.
The company has some plans to mitigate the effects of tariffs, but produce is the hardest thing to replace, said Bank, estimating Loblaw could mitigate the impact on about half of the U.S. produce the company buys.
“We are seeing these tariffs as a kind of tax on products that will hurt consumers on both sides,” he said.
But in other areas, the company is better positioned to offer consumers an alternative, Bank said.
For example, Loblaw carriers household and cleaning products from more than 30 U.S. vendors
but also has a strong array of products in that category among its private-label brands No Name and President’s Choice, he said.
“If the tariffs will be applied on household and cleaning,
then of course, those products will not be competitive anymore,
and all the sales will go to our control brands,
and they’re all produce in Canada,”
he said.
“So that’s good for Canada,
it’s good for customers,
and it’s good for us.”
The weakness of the Canadian dollar is adding further inflationary pressure at a time when Canada relies on the U.S. for fresh produce, added Dufresne.
“That is inflationary, and we’ve been starting to feel it quite seriously over the last few weeks.”
The loonie’s decline is also compounding the fact that Loblaw continues to see higher-than-normal price increase requests from large global suppliers, he said.
On Wednesday Loblaw announced it plans to spend $2.2 billion in 2025,
opening 80 new grocery and pharmacy stores with about 50 of them being discount grocers.
Bank says many will be smaller-format stores, building the company’s network of those types of grocers after launching small-format No Frills stores for the first time last May.
The investment, which is part of about $10 billion over five years, will also add 100 pharmacy care clinics to the company’s network.
The company is also planning to open the first phase of its new automated distribution centre in East Gwillimbury, Ont. The ramp-up starts with frozen products, said Bank.
Loblaw opened 52 new stores in 2024 as well as 78 new clinics.
On an adjusted basis, Loblaw says it earned $2.20 per diluted share in its latest quarter, up from an adjusted profit of $2 per diluted share a year earlier.
Revenue for the quarter totalled $14.9 billion, up from $14.5 billion, as food retail same-stores sales rose by 2.5 per cent.
Excluding the favourable impact of the timing of Thanksgiving,
Loblaw says food retail same-store sales were up about 1.5 per cent.
Consumers continue to favour discount stores over conventional stores,
though the gap is stabilizing,
said Dufresne.
Drug retail same-store sales rose 1.3 per cent,
with pharmacy and health care services same-store sales up 6.3 per cent,
offset in part by a 3.1 per cent drop in front store same-store sales.
Loblaw shares were down 1.6 per cent to $176.56 in late-morning trading on the Toronto Stock Exchange.
This report by The Canadian Press was first published Feb. 20, 2025.
Rosa Saba, The Canadian Press
Jul. 29, 2025 "As more loyalty programs pop up, customers want access and tangibility: expert": Today I found this article by Jordan Fleguel on BNN Bloomberg:
An increasing amount of Canadian companies are creating loyalty programs to
retain customers
and grow market share,
and while each new program offers unique perks and benefits,
consumers gravitate more towards certain ones.
That’s according to a recent report from Toronto-based customer engagement agency Bond Brand Loyalty, which examined consumer trends and gathered data from across more than a dozen market segments.
“A lot of programs have come to market in the last little while as brands have faced the circumstances of the market,” Sean Claessen, Bond’s chief strategy officer, told BNN Bloomberg in a Monday interview.
“Leaders have said being close to customers is better, that’s a safer place to be to understand their new needs or changing needs,
and so loyalty programs historically have been one of the ways that a lot of marketers have tried to get closer to customers to understand those things.”
Claessen said Canadian customers are keen to join almost any loyalty program that’s offered to them;
however, they typically are only active in about half of the programs they are part of.
“Customers raise their hands for all of the programs,
but the ones that truly engage them
and that pay off the effort that’s required
and afford them the things
and the spending power that comes with those delayed dividends…
that tends to be the ones that people stay active in,”
he said.
In the current economic environment, Canadian shoppers value tangibility, Claessen explained,
and the ability to use things like loyalty points on day-to-day purchases,
rather than just accumulating them over time.
Claessen noted that Bond has been collecting customer preference data for more than a decade, and its 2025 “Loyalty Report” represents the first time that access took the top spot when it came to what consumers valued in a rewards program.
“Access has become the top driver in what satisfies Canadians with these programs…
being first to know,
getting a last call on a product that is going out of stock,
anything that is sort of afforded to you by being a part of the club,”
he said.
“That kind of mechanic in loyalty performs really, really well…
that edge as a customer that makes you feel like
it matters that I’m a customer,
I’m getting that reciprocal benefit from the company.”
Critics of loyalty programs have pointed to the
collection of customer data as a downside to joining,
as many companies require members to provide
an email address,
home address,
phone number or more.
But Claessen said that’s becoming less of an issue for customers.
According to Bond’s report, 64 per cent of customers are comfortable sharing their data with a company in return for the benefits they prefer.
“Less and less consumers are worried about that, in fact,
a lot of the data we use to determine what are good programs
and how do they operate
is customers volunteering their purchase data, the receipt data…
that is part of a lot of linked loyalty programs lately,” he said.
“And that seems to be going swimmingly for all involved;
for customers they report higher satisfaction,
likelihood to stay with the brand,
every metric that you would expect as a business goes up and there’s sort of a win-win-win in that situation.”
Based on Bond’s findings in its 2025 report and in previous years, it’s clear that loyalty programs do pay off for the companies that invest in them – as long as they’re designed and managed well, said Claessen.
“A well-designed program
that‘s properly managed
is all incremental,
so as you would compare it to non-loyalty participating customers, the results would be clearly in favour of customers who are receiving these offers and getting these perks and benefits,” he said.
“They tend to consolidate their shopping if it’s a fragmented category with the kinds of brands who are offering them those programs.”
My opinion: I only have a Shoppers PC Optimum card.
I mainly go to Shoppers Drug Mart to buy my snack foods like chips and cookies.
However, I have bought other things that's not food like sunscreen and a charger wire.
I was working at my Seasonal Restaurant Job #1 a couple of months ago. I had these 2 co-workers.
Black woman in her 20s: I love Shoppers Drug Mart.
White guy in his 20s: I love that store, and my girlfriend works there.
No comments:
Post a Comment