DRUG STORE SHOPPERCANADA, JULY 2017

DRUG STORE SHOPPER, CANADA - JULY 2017 2

© Mintel Group Ltd. All rights reserved.

Overview

What you need to know

Canadians remain faithful to traditional drug stores for their drug store needs. However, the convenience of one-stop-shopping at other retailers poses a threat to patronage. Positively, Canadians still see drug stores as differentiated in their expertise. Having said this, diversification of products and services has worked to draw in a wide range of customers, showing that a multipronged strategy will continue to be necessary to maximize shopper engagement – especially considering the wide range of demographic segments who shop at drug stores. As consumer definitions of health and wellness evolve, drug stores would do well to cater to the shifting focuses to maximize audience interest.

Definition

For the purposes of this Report, Mintel has defined a drug store as a retail store where a primary component of the store is a pharmacy, selling prescription medicine and staffed with a pharmacist. Other categories commonly found at drug stores include OTC (over-the-counter) medicine, beauty and personal care, household needs and a limited selection of food. When referring to ‘drug stores’, this Report considers those that are traditional drug stores, not including other retailers with pharmacies such as grocery stores, warehouse clubs or mass merchandisers. These other retailers are also discussed in the Report as locations consumers may shop for drug store needs, yet are not referred to as ‘drug stores’.

DRUG STORE SHOPPER, CANADA - JULY 2017 3

© Mintel Group Ltd. All rights reserved.

REPORT CONTENT

Overview What you need to know Definition

Executive Summary The issues

Figure 1: Shopping location, May 2017 Figure 2: Repertoire analysis of items purchased, by gender, May 2017 Figure 3: Drug store purchase (any category) by channel, by age, May 2017

The opportunities Figure 4: Purchase of food and non-alcoholic beverages, Women 18-24 vs overall, May 2017 Figure 5: Technology interest, women 18-24 vs overall, May 2017 Figure 6: Drug store shopping behaviours, Quebec vs overall, May 2017

What it means

The Market – What You Need to Know An aging population may mean differences in the way health is defined An aging population also has implications for resources Diversity in population leads to diversity in health issues Canadians are concerned about their weight Wellness encompasses both physical and mental health

Market Factors An aging population means a need to frame health and wellness issues accordingly

Figure 7: Population aged 0-14 and over 65, 1995-2035* A more diverse population means greater variance in health concerns

Figure 8: Share of population of Canada, by territory/province, 2014 Nearly half of Canadians are concerned about the health risks associated with their weight

Figure 9: Body mass index, self-reported rate of being overweight or obese among Canadians, 2003-14 Canadians are prioritizing both physical and mental wellness

Key Players – What You Need to Know Beauty and personal care items gaining the attention of women Other retailer types eating into drug store loyalty Men are less engaged with drug store categories Shoppers Drug Mart considers convenience

What’s Working? Efforts highlighting beauty and personal care is attracting women

Figure 10: The Night Before The Party | Holiday 2016, November 2016 Figure 11: Love Your Lip Colour, April 2017 Figure 12: Inspired Beauty – The Day Look, February 2017

Beauty products are best tried in stores Figure 13: Purchase of beauty and personal care items at drug stores, by women and age, May 2017

DRUG STORE SHOPPER, CANADA - JULY 2017 4

© Mintel Group Ltd. All rights reserved.

What Are Some Areas of Concern? Competition from other retailers for drug store items is heating up

Figure 14: Shopping location, May 2017 Drug stores may be missing out on the male audience

Figure 15: Repertoire analysis of items purchased, by gender, May 2017 Figure 16: Dove Men+Care Elements Minerals+ Sage (Canada, March 2017) Figure 17: Nivea Men Creme (Canada, March 2017) Figure 18: L’Oréal Men Expert Hydra Energetic X (Canada, March 2017)

What’s Next? Shoppers Drug Mart innovations are moving the needle Outside companies providing beauty advice in partnership with retailers: ChickAdvisor

The Consumer – What You Need to Know Drug stores face competition from other retailers Diversification in products is working to buoy visitations Expertise draws in customers who are willing to shop once there Loyalty programs may be leveraged to encourage cross-category purchases amongst women Younger drug store shoppers want more tech support

Shopping Location for Drug Store Needs Traditional drug stores lead, though other retailers are encroaching

Figure 19: Drug-store needs shopping location, May 2017 Shoppers Drug Mart has a dedicated audience in Millennial women

Figure 20: Shopped at Shoppers Drug Mart, women 18-34 vs overall population, May 2017 The threat of mass merchandisers is greatest amongst women 35-54

Figure 21: Shops at mass merchandisers for drug store needs, women 35-54 and mothers with children vs overall, May 2017 Affluent consumers are turning to warehouse clubs

Figure 22: Shops at warehouse clubs for drug store needs, by household income, May 2017

Items Purchased Beauty and personal care items help drive visitations

Figure 23: Type of items purchased, May 2017 Women are more engaged with drug store categories

Figure 24: Type of items purchased, by gender, May 2017 Figure 25: Desire for better selection of fresh foods, Women 18-24 vs overall, May 2017

Less potential lies with on-the-go food when targeting Quebecers Figure 26: Purchased food and non-alcoholic drinks, Quebec vs overall, May 2017

Snacks and drinks draw Chinese Canadians Figure 27: Yum Yum Old Style Bacon & Maple Flavoured Kettle Cooked Chips (Canada, June 2016) Figure 28: Campbell’s Slow Kettle Style Andouille Sausage Jambalaya Soup with Chicken & Ham (USA, November 2016) Figure 29: Quaker Apples & Cranberries Instant Oatmeal (USA, February 2016)

Attitudes towards Shopping at Drug Stores Expertise draws consumers

Figure 30: Drug store shopping behaviours, May 2017 Over-55s typically shop where they fill prescriptions

Figure 31: Seeking advice and buying products recommended by pharmacists, by age, May 2017 Quebecers seek expertise

Figure 32: Drug store shopping behaviours, Quebec vs overall, May 2017 Figure 33: Desire for availability of on-site medical advice, Quebec vs overall, May 2017

DRUG STORE SHOPPER, CANADA - JULY 2017 5

© Mintel Group Ltd. All rights reserved.

Loyalty and Drug Store Shopping For the most part, Canadians are loyal

Figure 34: Loyalty to drug stores and the impact of loyalty programs on shopping behaviours, May 2017 Loyalty programs have a stronger pull on women – particularly 18-34s

Figure 35: Loyalty to drug stores and the impact of loyalty programs on shopping behaviours, May 2017 Figure 36: Desire for better loyalty program benefits, Women 18-34 vs overall, May 2017

Interest in Mobile Support Shopping and health management efficiencies will resonate

Figure 37: technology interest, May 2017 Women aged 18-24 are most keen about added support

Figure 38: Technology interest, women 18-24 vs overall, May 2017 Parents are interested in speaking to experts via apps

Canadians vs Americans – Shopping at Drug Stores Drug stores are seen as more differentiated in Canada

Figure 39: Shopping location, Canada vs US, May 2017 (Canada)/February 2017 (US) Figure 40: Type of items purchased, Canada vs US, May 2017 (Canada)/February 2017 (US) Figure 41: Agreement with ‘I regularly seek advice from the pharmacist’, Canada vs US, May 2017 (Canada)/November 2015 (US) Figure 42: Agreement with ‘I prefer to shop at another retailer type than drug stores for my drug store needs’, Canada vs US, May 2017 (Canada)/February 2017 (US) Figure 43: Type of items purchased, Canada vs US, May 2017 (Canada)/February 2017 (US) Figure 44: Agreement with ‘I typically shop at drug stores where I fill prescriptions’, Canada vs US, May 2017 (Canada)/November 2015 (US)

Appendix – Data Sources and Abbreviations Data sources Abbreviations and terms

DRUG STORE SHOPPER, CANADA - JULY 2017 6

© Mintel Group Ltd. All rights reserved.

DATABOOK CONTENT

Standard demographics you can expect to see tracked in our Databooks:

• Gender • Age • Gender/age combined • Generation • Race/Hispanic origin • Geographic region • Geographic area (urban, suburban, rural) • Household income • Age/income combined • Employment status • Education level • Presence and number of children in the household • Household size • Marital status • Home ownership status • Social media usage • Mobile device ownership

Consumer Research

Consumer section: Shopping location

Shopping locationShopping location, by demographics

Consumer section: Type of items purchased

Type of items purchasedType of items purchased, by demographics

Consumer section: Desired offerings

Desired offeringsDesired offerings, by demographics

Consumer section: Attitudes towards shopping at drug stores

Attitudes towards shopping at drug storesAttitudes towards shopping at drug stores, by demographics

Consumer section: Technology interest

Technology interestTechnology interest, by demographics

DRUG STORE SHOPPER, CANADA - JULY 2017 7

© Mintel Group Ltd. All rights reserved.

Demographics by demographics

Demographics by demographics

Further analysis

Further analysis: Repertoire of type of items purchased

Repertoire of type of items purchasedRepertoire of type of items purchased, by demographicsDemographics, by repertoire of type of items purchased

© 2017 Mintel Group Ltd. All rights reserved.Confidential to Mintel.

Published by Mintel Group Ltdwww.mintel.comemail: info@mintel.com

Help desk

DisclaimerTerms and Conditions of useAny use and/or copying of this documentis subject to Mintel‘s standard terms andconditions, which are available athttp://www.mintel.com/legalIf you have any questions regardingusage of this document please contactyour account manager or call your localhelpdesk.

UK +44 (0)20 7778 7155

US +1 (312) 932 0600

Australia +61 (0)2 8284 8100

Japan +81 (3) 5456 5605

China +86 (21) 6386 6609

Singapore +65 (0) 6653 3600