TORONTO — After more than a year of the ongoing COVID-19 pandemic, Canada’s retail pharmacy industry has proven its ability to serve as a front line of defense in combating the disease. The industry has surmounted multiple challenges as it has striven to protect Canadians, but the struggle is probably not over: Canada’s chief public health officer, Dr. Theresa Tam, has warned that the country is on the verge of a fourth COVID-19 wave that is being driven by the much more highly infectious Delta variant.
In its first year, the pandemic created opportunities to balance the challenges. According to the Retail Council of Canada, sales of health and personal care stores (which includes pharmacies) between March 2020 and March 2021 rose 18.9% to $4.11 billion (Canadian). According to Canadian government statistics, the average revenue of a retail pharmacy was $1.3 million last year, and almost 80% of establishments were profitable.
While different agencies tally different totals of pharmacies in the country, the National Association of Pharmacy Regulatory Authorities calculates that at the beginning of this year, there were 10,860 community pharmacies and 498 hospital pharmacies, operated by 43,686 licensed practicing pharmacists.
According to the Neighbourhood Pharmacy Association of Canada (Neighbourhood Pharmacy), 95% of Canadians live within five kilometers of a community pharmacy. Although pharmacists are the third-largest group of health care providers, after nurses and physicians, Canadians see them up to 10 times more frequently than they visit any other provider.
Perhaps most important, a survey conducted by Neighbourhood Pharmacies indicates that 88% of Canadians are confident in the quality of care they receive from their pharmacists. Moreover, about 15% of Canadians do not have a family doctor, and 78% are likely to visit a pharmacist to manage their common ailments.
As a result of the pandemic, pharmacists acted under temporary legislative exemptions to allow them to prescribe controlled drugs and substances to ensure continuity of care. Neighbourhood Pharmacy is encouraging government to make that change permanent, while continuing to advocate for an expanded role for pharmacists in point-of-care testing.
“The virus has exposed many shortcomings in Canada’s health care system, and the next few years should be focused on fighting COVID-19 while also working to address system improvements needed,” wrote Sandra Hanna, chief executive officer of Neighbourhood Pharmacies, earlier this year. “While the strains on our health care system have been unparalleled in our lifetime, Canadians’ access to prescription drugs has remained almost untouched. Based on industry data, 98.5% of Canadians have maintained their drug coverage during the pandemic, and access to drugs across the country has remained stable.”
With the likelihood of a federal election being called this fall, community pharmacy may be well positioned to benefit from a heightened public conversation about health care.
In any event, Hanna sees community pharmacy continuing to play a critical role in the nation’s public health this year, particularly in administering COVID-19 vaccines.
“We will be instrumental in helping Canadians emerge from this pandemic and getting the economy and health care system back on track,” she said.
Shoppers Drug Mart
As Canada’s largest drug chain with some 1,347 retail locations, Shoppers Drug Mart has been on the front line in the campaign to contain the COVID-19 pandemic. While the crisis has certainly posed challenges for the company, it has also created opportunities and reinforced the value and convenience it brings to Canadian consumers and pharmacy patients.
Last year Shoppers reported $14.3 billion in sales, a 6.9% increase that was driven in part by a 4.9% rise in same-store sales. Unlike most other drug chains, Shoppers derives more than half of its sales from the front end, according to president Jeff Leger. That exceptional productivity reflects the fact that the Shoppers front end is a destination for many shoppers, not just a resource for a convenience purchase on the way to the pharmacy.
The dramatic shift in consumer lifestyles during the initial stages of the pandemic caused some significant changes in buying patterns. For example, the beauty department, which is arguably the biggest front-end attraction with its unmatched offering of prestige beauty brands and beauty advisors, took a hit as people transitioned to working at home.
“Obviously when you think about necessities during a pandemic, prestige cosmetics is not at the top of the list,” said Leger during an interview last fall. “Now a lot of it’s coming back, mostly around skin care and elements like that.”
While categories such as color cosmetics, deodorant and travel-related segments all suffered declines at the height of the pandemic, other categories such as food, electronics and entertainment and household cleaning experienced significant sales lifts. Even before its 2014 acquisition by Loblaw, Shoppers had introduced a substantial offering of convenience food, and that has expanded since.
Management takes pride in the fact that the retailer’s customer satisfaction (OSAT) scores improved during the pandemic. Looking ahead, among the key learnings yielded by the pandemic are the need for an integrated and seamless omnichannel experience and the ability to see emerging trends and changes quickly in order to turn them into opportunities stand out.
The past year has enabled the pharmacies of Metro Inc., Jean Coutu Group and Brunet to accelerate the deployment of several services that have enhanced the convenience provided to patients and customers.
Last fall the pharmacist-owners and pharmacy teams of Jean Coutu and Brunet launched their first flu vaccination campaign, which turned out to be an excellent preparation for administering COVID-19 vaccines as they became available this year. The chains’ teams quickly acquired the necessary equipment for cold storage and distribution of the vaccines and set up a robust frozen distribution chain.
“Throughout the past year our teams have been dedicated, and they have shown incredible resilience,” said a company spokeswoman. “In order to serve customers as safely and efficiently as possible, the networks implemented new solutions, including delivery service, payment by phone, curbside pickup and more.”
More specifically, both Jean Coutu and Brunet implemented express home delivery and rolled out curbside pickup. Moreover, Metro signed an agreement with Cornershop, an on-demand delivery service, making product offerings from Metro, Jean Coutu and Brunet available through the Cornershop app to consumers in the greater Montreal and Gatineau areas as well as Toronto and Ottawa.
With a network of more than 800 drug stores across Canada, Pharmasave is one of the country’s leading independent pharmacy and drug store organizations. While the company’s cornerstone is serving the patients and customers in its communities, that focus has expanded to include e-commerce and digital pharmacy services.
In fact, last September Pharmasave launched its e-commerce platform, which had been in development before the COVID-19 outbreak. The fully integrated service allows independent pharmacy operators the ability to tailor their online product assortments to reflect the needs of their communities.
The strategy has been a clear winner: From January to May, online retail orders doubled versus the previous five months. Moreover, customers on average are spending 42% more online compared to in-store purchases.
Before the pandemic struck, Pharmasave had equipped its member pharmacists with a range of state-of-the-art digital tools to enhance their patient services. The crisis has accelerated patient adoption dramatically, and the company is consequently introducing additional enhancements and features.
For instance, since the start of the pandemic the number of patients using Pharmasave’s eCare@Pharmasave mobile platform for managing prescriptions has vaulted 114%. The company has consequently added such new features as fingerprint and facial recognition to simplify the eCare@Pharmasave login process.
The company is also working to raise awareness of the importance of taking medications as prescribed after a national survey commissioned by Pharmasave showed that 26% of respondents take their meds differently than prescribed. The company launched a national education campaign in March to raise awareness and offer tips to support better adherence.
McKesson Canada leads the largest network of independent pharmacies in Canada, with more than 2,600 member pharmacies. The group’s banners include Uniprix, Proxim, I.D.A., Guardian, Remedy’s Rx and The Medicine Shoppe.
The company began its preparations to deliver COVID-19 vaccines last fall. As the country’s largest pharmaceutical distributor and the only one with licensed infrastructure in every province and territory, it was uniquely positioned to play a leading role in distributing vaccines as they became available. In fact, McKesson Canada is responsible for delivering one-third of all medications needed daily in Canada to pharmacies and hospitals.
“Since the onset of the pandemic, McKesson Canada has leveraged its deep expertise to help maintain the integrity of the health care and pharmaceutical supply chain, source and distribute personal protective equipment to frontline workers, and stand up COVID-19 testing in pharmacies, many in underserved communities,” said Rebecca McKillican, chief executive officer of McKesson Canada. “We are proud to support community pharmacy as the most convenient, accessible and popular immunization points via our safe, secure and efficient vaccine distribution model, as we do every year for influenza.”
The company’s Retail Banner Group (RBG) provides an extensive program of services to enable independent pharmacies to compete effectively against massive pharmacy chains. The unexpected challenges of the pandemic have proven the value of those services, enabling member pharmacies to play a frontline role in combating the health crisis.
Throughout the pandemic RBG has worked to provide its independent pharmacies with new digital tools to help them adjust to dramatic changes in patient needs and preferences. For example, last year the RBG team supported the launch of Uniprix’s online store, which gives customers the option of picking up their orders at their local pharmacy or having them delivered to their homes.
Rexall has been a fixture in the Canadian drug store scene for more than a century, since its establishment in 1904 by United Drug Co. Now a unit of McKesson Corp. with more than 400 pharmacies and 8,500 employees nationwide, the chain continues to serve patients and customers in 180 communities across Canada.
Rexall reacted quickly to the outbreak of the COVID-19 pandemic last year, taking immediate steps last March to create safe environments for customers and employees, adjusting store hours and establishing a dedicated shopping hour for older customers and individuals with disabilities. In addition, the company partnered with Tia Health to launch a virtual care service to ease the burden on the acute health care system, especially emergency rooms of hospitals. The service enables Rexall patients to talk to a doctor from their homes either by telephone or by video chat.
Importantly, the company also initiated home delivery of maintenance medications to patients with chronic conditions. Patients can receive their meds within three to five days.
Last September Rexall launched Be Well, which it describes as Canada’s most health-focused loyalty program. A recent study commissioned by the company found that 37% of Canadians have found that COVID-19 prompted them to move their health and wellness experience to digital and virtual channels, but 44% found that doing so made managing their health more complicated.
“Canadians have been clear: Traditional loyalty programs are not meeting their evolving needs,” said Nicolas Caprio, president of Rexall. “They want more than simply rewards. We know that one in every three Canadians has missed or knowingly delayed a prescription refill because the process isn’t convenient. They want better tools, better data and better ways to ultimately manage and improve their health and wellness.”
According to president and chief operating officer Clint Mahlman, the pharmacy is the heart of London Drugs’ business, and it is the source of most of the brand trust that customers invest in the company. But it is its front-end business that differentiates the chain from all other Canadian pharmacy operators.
“We very specifically try to be unique in what we consider the sea of sameness in North American retailing,” Mahlman said in a roundtable discussion earlier this year. “Very few retailers offer the blend of product categories, the unique products and the services we offer under one roof.”
That unique blend is enabled by three elements: a culture that encourages taking chances and trying the unconventional; a deep understanding of the retailer’s customers; and the exceptional expertise of its buyers. The chain is known for its professional-level photography department and service, and it has similarly made its mark in such categories as electronics, entertainment and home appliances. London Drugs was one of the first North American retailers to introduce the Sony brand, and it entered the personal computer business at the dawn of the PC age.
Complementing its unique and compelling product assortment is a range of services such as post offices and optical departments. Tying it all together is a feature called learning labs, which allow customers to attend presentations on a vast array of subjects from wildlife photography to elder care to how to manage type 2 diabetes. All of these drive customer traffic.
At present, London Drugs operates 81 stores and pharmacies in four provinces: British Columbia, Alberta, Saskatchewan and Manitoba. While Mahlman says that the company does not need to grow geographically to be profitable, he adds that London Drugs will definitely expand into additional provinces.