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SDM at 50: Shoppers Drug Mart has place among iconic brands

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TORONTO — After 50 years Canadian consumers’ love for Shoppers Drug Mart (SDM) shows no signs of waning. In poll after poll — most recently those conducted by and The Huffington Post — the retailer continues to rate at or near the top — not only in its own field but among companies of all kinds.

The 1,271-store drug chain, which president and chief executive officer Domenic Pilla says has become part of the fabric of Canada as it marks its 50th anniversary, draws strength from diverse sources, none more important than the associate concept upon which Murray Koffler, a Toronto pharmacist, founded the company a half century ago.

Simple in theory but difficult to execute effectively, the business model is designed to fuse the best elements of chain and independent drug stores in a whole greater than the sum of its parts.

“The idea is brilliant because it gives us the best of both worlds,” Pilla explains. “We have the benefit of centrally driven processes, products and rigor. Yet, at the same time, our associate-owners treat the business as their own, which means treating customers, patients and employees as their own. That creates energy and ­passion.”

Under Koffler and his successors as CEO — David Bloom, Glenn Murphy, Jurgen Schreib­er and, since November 2011, Pilla — Shoppers Drug Mart expanded rapidly and, in the process, developed world-class capabilities in such areas as patient care, private label merchandise, store design and customer loyalty, all to support its core value proposition in health, beauty and ­convenience.

Pilla, who worked for Petro Canada and was president and CEO of McKesson Canada before joining SDM, was aware of the strengths that grew out of Koffler’s vision and the legacy of his predecessors. What he didn’t realize prior to assuming his current position was the zeal with which that vision continues to be pursued.

“The two great companies that I previously worked for have cultures that are very performance oriented and operationally excellent,” he says. “Shoppers Drug Mart has the same qualities but at a whole other level I hadn’t experienced before.

“There is a work ethic, a discipline and a performance culture here that is energizing. That DNA has stayed in the company throughout its history, and it transcends any individual contributor. Whether we’re talking about a cashier, a pharmacist, an associate or someone on the management team, both the passion and the commitment are evident.”

SDM has harnessed those qualities to create and maintain a working environment that fosters a process of continuous improvement.

“We’re trying to utilize the value of the creativity and entrepreneurship of everyone in the company,” explains Pilla. “Many of the ideas that we’re implementing on a national level have come through the associate body at store level or our PEERS structure, which is the glue that holds the commercial arrangement, along with the personal entrepreneurship, ­together.”

The system enables associates in each SDM district to elect representatives, who in turn designate six regional “PEERS chairs.” That group interacts with senior management on a monthly basis.

The ongoing dialogue has spurred the company to constantly raise the bar and enhance its dominant position in the Canadian drug store market. SDM’s annual sales give it a market share of about 20% in the sector.

“Shoppers Drug Mart has gotten to this point because it’s a brand that has always innovated, always expanded and always delivered on its promises,” says Pilla. “We’ve done so for 50 years and we intend to continue to build on that heritage.”

*Editor’s Note: Read the full nine-page special report, "Shoppers Drug Mart: 50 Years of Excellence," in the Sept. 24, 2012, print issue of Chain Drug Review.


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