Loblaw posts Q2 results, raises outlook despite ‘intense competitive environment’
BRAMPTON, Ontario — Loblaw Cos., which recently announced plans to acquire Shoppers Drug Mart, posted a 2% increase in second-quarter revenue and a 1.1% lift in same-store sales as its drug store sales fell flat for the period.
Revenue for the quarter totaled C$7.5 billion, up 2% compared with the year-ago period. Retail sales increased 1.9% to C$7.37 billion.
Net earnings totaled $C178 million, up C$22 million from the year-ago period. The increase was largely because of the increase in operating income, partially offset by an increase in the company’s effective income tax rate.
Despite a competitive retail environment, the retailer raised its full-year operating income outlook to mid-single digits. This compares with the retailer’s prior outlook of low-single digit growth.
“Earlier this month, we announced the successful IPO of Choice Properties REIT. In doing so, we unlocked significant value for shareholders, and established an attractive new growth platform for Loblaw. Last week, we announced a transformational combination with Shoppers Drug Mart. These two transactions mark the beginning of a powerful new chapter for Loblaw,” stated Galen Weston, executive chairman of the company. “Combining Loblaw and Shoppers Drug Mart will build on the strong base Vicente and his team have developed over the last two years, providing an excellent strategic complement to our existing assets, and setting the stage for further shareholder value creation.”
As previously reported, Loblaw Cos. and Shoppers Drug Mart announced on July 15 a definitive agreement under which Loblaw will acquire Shoppers Drug Mart for C$12.4 billion in cash and stock.
Under the agreement, Loblaw will acquire all of the outstanding Shoppers Drug Mart common shares for C$33.18 in cash plus 0.5965 Loblaw common shares per each Shoppers Drug Mart common share, on a fully pro-rated basis. Loblaw and Shoppers Drug Mart anticipate that the transaction will be completed within six to seven months.
Survey finds few employers planning to change hiring practices in response to health-reform law
TEANECK, N.J. — The majority of employers in New York, New Jersey and Pennsylvania don’t plan to change their hiring practices in response to Obamacare, according to a new survey.
The survey, by HealthPocket and HealthCareReform.com, found that 87% of employers primarily in the three states would keep their current practices, while 66% are willing to consider self-insurance options, and 15% are considering dropping coverage as a result of the law, officially known as the Patient Protection and Affordable Care Act. The survey included 150 business owners, human resources professionals and other decision makers and was conducted before the Obama administration announced it would delay the employer mandate by a year.
"Contrary to the rhetoric, businesses in New York and other states are not changing their hiring plans or eliminating health benefits in response to the Affordable Care Act," HealthCareReformCentral.com cofounder Jonathan Singer said. "Additionally, the number of survey respondents open to self-insurance options shows that the traditional models of employer-based health insurance in the pre-reform environment will face greater competition."
According to the survey, 11% of employers expected to decrease hiring, and 1% anticipated increasing staff as a result of the law.
PriceGrabber survey reveals consumer shopping trends for BTS season
LOS ANGELES — PriceGrabber released today the results of its first 2013 Back-to-School shopping survey. Results of the survey indicate that 68% of consumers plan to spend up to $500 this back-to-school shopping season compared with 3% in 2012 and 48% in 2011. Additionally, 17% of respondents plan to spend between $500 and $1,000, and 15% of shoppers said they have no back-to-school shopping budget this year. Conducted from June 17 to July 8, 2013, the survey includes responses from 2,191 U.S. online shopping consumers.
“The outlook for the back-to-school shopping season remains positive. With [the] unemployment rate dropping from 8.2% in June 2012 to its current rate of 7.6%, shoppers are more inclined to spend than they were in the last couple of back-to-school seasons,” said Rojeh Avanesian, SVP marketing and sales of PriceGrabber. “However, instead of spending on the newest gadgets, shoppers are looking for ways to get the most for their money by looking for deals, as well as reusing already owned items before purchasing new ones.”
Highlights from the survey are detailed below.
Classic school supplies and clothing top shopping lists
Consumers are planning to purchase practical items, putting basic school clothing and supplies at the top of their back-to-school shopping lists. When PriceGrabber survey respondents were asked to select all of the items they plan to purchase this back-to-school shopping season, 72% selected general school supplies, such as notebooks, binders and pencils. Sixty-eight percent of consumers plan to send their children back to school in style with new clothing; 42% said they plan to purchase a backpack or tote bag; and 36% of shoppers said they plan to purchase books.
In the electronics category, computers topped back-to-school shopping lists with 17% of respondents selecting laptop computers, and 11% citing an electronic tablet purchase. Computer accessories received 10% of the vote, cell phones received 9%, and only 5% selected a desktop computer.
Consumers plan to use numerous money-saving methods while back-to-school shopping
When PriceGrabber survey respondents were asked to select all of the ways they plan to save money while back-to-school shopping this year, visiting discount stores ranked in first place with 50% of the consumer vote. Forty-six percent of consumers said they plan to search for school supplies they already own, such as pens, pencils and glue sticks before buying new items. Consumers indicated they will readily use online shopping sites, as this money-saving option ranked third place, receiving 45% of vote; 37% of consumers plan to take an inventory of their kids’ closet to see what items can still be worn and which items need to be replaced before going shopping; and 33% plan to visit retailer websites to print coupons.
Discount stores and online-only retailers score big with consumers
When respondents were asked to select all of the types of stores they plan to shop at for back-to-school items, 80% selected discount stores. Online-only retailers were voted second place, receiving 54% of the consumer vote, and wrapping up a close third place, office supply chain stores were selected with 44%. It is noteworthy to mention that 42% plan to shop at traditional department stores, and 24% plan to shop at electronics stores this back-to-school season.
Back-to-school mobile device purchases expected to rise
Many back-to-school shoppers indicated they will continue to shop electronically this year to take advantage of the latest and greatest back-to-school shopping deals. When PriceGrabber survey respondents were asked to select all of the methods in which they plan to purchase back-to-school items this year, 13% answered they plan to shop using their mobile phone (compared to 6% in 2012), and 16% said they planned to make purchases via an electronic tablet device (versus 8% from last year). Sixty-nine percent of shoppers said they plan to make back-to-school product purchases online; 58% indicated purchases at a brick-and-mortar store; and only 11% noted a potential purchase from a printed catalog.
Free shipping, sales and coupons incentivize back-to-school shoppers
Consumers continue to look for ways to stretch their dollar and take advantage of retailer incentives to save money. According to the survey, 72% of consumers chose free shipping as the top retailer tactic that would entice them to make a back-to-school purchase this year. When asked to select all retailer tactics that would encourage them to make a back-to-school shopping purchase, sales came in a close second place with 71% of the vote; 69% cited coupons; 43% selected online promotions; 41% noted rebates; and 38% selected free items with a purchase.
Most back-to-school shopping will take place in August
According to PriceGrabber survey data, 50% of consumers plan to start their back-to-school shopping in August; 34% plan to start shopping in July; 7% noted June; 6% cited September, and only 3% selected October.
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