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Pharmaprix to start selling fresh produce in Montreal stores

Pharmacy was bought by Loblaws in 2013, and its ability to reach people in urban centres who wanted one-stop shopping was a big motivator

Montreal’s grocery market is about to get a little more competitive — pharmacy chain Pharmaprix is starting to sell fresh produce at several Montreal-area stores.

Six local stores now have the expanded grocery sections and the company plans to increase that to 11 before the end of the year, said Éric Bouchard, a senior vice-president at Pharmaprix.

After that, the company plans to evaluate the results, “and see if there’s any adjustments that we need to make,” he said. “And then continue to expand.”

Most of the Quebec stores with the expanded grocery lineup will be in dense urban areas.

Pharmaprix, which does business as Shoppers Drug Mart in the rest of Canada, was acquired by grocery giant Loblaw Companies Limited in 2013. It has launched similar grocery offerings in several other cities, including Toronto, Regina, Vancouver and Ottawa.

The ability to reach people living in urban centres who wanted a one-stop shop was one of the motivating factors of the acquisition, said Sylvain Charlebois, a Dalhousie University professor who studies food distribution and policy.

“The Shoppers acquisition was really a stroke of brilliance, I think, because Loblaw acquired a bunch of real estate that was actually very expensive to acquire but everything was there, their urban network was already developed,” he said. “The produce move is really about adding value to the proposition that they have to these urbanites.”

Bouchard said the company wants to bring produce closer to customers.

“It becomes more convenient for them,” he said. “You don’t have to go to the supermarket that is far from home.”

In dense areas where there are few grocery stores, bringing produce into a pharmacy could be good for the community, said Craig Patterson, the editor-in-chief of Retail Insider, an online industry publication.

“This is an opportunity to alleviate food deserts,” said Patterson, who led a 2016 research study with the University of Alberta into urban grocery stores across Canada.

While much of Montreal is relatively well-served by grocery stores, especially compared to downtown areas in some other Canadian cities, there are areas where access to groceries isn’t convenient, he said.

“People tend to shop for groceries more frequently, especially in urban centres, than they would for pharmacy products so I think this is a way for them to drive traffic into their stores,” he said. “On the flip-side, the margins for grocery are usually less than what they would be for pharmacy.”

But Charlebois isn’t sure the plan will work in Quebec.

Quebecers pay more for food, relative to their income, than residents of any other province, he said and are “more sophisticated, especially when it comes to quality and freshness.”

Montrealers are also more likely to shop at small, independent grocery retailers than people in other parts of the country.

“It’s only in Quebec where you see independent grocers play a very, very important economic role in our food economy,” Charlebois said.

But convenience and location could benefit Pharmaprix, he said.

Bouchard said Pharmaprix will carry a number of Quebec products and brands, including seasonal offerings, like fruit.