The Shopper’s Drug Mart Business Model
I am actually old enough to remember the original Koffler’s Drug Store in Toronto that later became part of the Shopper’s Drug Mart history. And who could forget their phone number, 444-4444. This means of course that I’m also old enough to remember when integrity in business mattered and when the customer could count on good service.
The present Shopper’s Drug Mart marketing model looks like this:
- Decide that out of all the SKUs (individual product line items) you carry, a third of them are going to be on sale every three weeks. This means environmentally that your flyers will be responsible for the killing of many trees, and that your product images in the advertising will be so small that people will go blind trying to read them. It also renders your “regular” prices meaningless.
- If it’s a truly good deal, make sure none of your stores receive enough product to last even the first few hours. But do remember to keep a few cartons back for staff, personal friends, and customers who start screaming audibly. (Funny how they’re always able to turn up something when you keep asking.) The SDM where we live has been chronically out of stock of their specials for twenty years now, this is not a new strategy.
- If you have a deal that’s something like, 2-For-$5.00, but the individual price is $2.99; make sure you only have one unit left on display at a time. The customer will think they got the “last one” before realizing they’re being charged a higher sale price than the $2.50 the above price would suggest.
- Purchase an expensive array of point-of-sale terminals and electronic payment terminals, but make sure only one cashier is on duty at a time. Not only does it save you money, but the long lineup makes (some) people think there’s a buying frenzy going on.
- Be totally indifferent, totally monolithic, too big to care.
When Downsizing Gets Absurd
It’s one thing when they cut back 10% on the weight of a package of potato chips, but when toilet paper starts being sold with less than 100 sheets per roll it becomes (a) an environmental problem, and (b) a major inconvenience when you keep changing the rolls.
My wife and I recently started buying TP for our business at an industrial janitorial supply company, the kind of place where motels and businesses — who don’t have time for the short roll nonsense — get their supplies and we occasionally use these at home, too. The two types we buy offer 605 and 650 sheets per roll respectively; which makes a lot more sense. One of them is a bit rough, if you know what I mean, but neither one represents a severe loss of quality.
Customers should simply (a) boycott the short rolls, and (b) make sure their friends are aware of the need to read the “sheets per roll” counts.
When “Loss Leader” Means “Lost Customers”

FreshCo: And not a car in sight. Makes you wonder.
Last Sunday we went to Fresh Co, the new incarnation of what was once Price Chopper, now featuring classy display fixtures and higher prices. Sobey’s thought this change was a good idea, but they’ve never convinced us to buy our “staple” items through them instead of No Frills (Loblaw Group) or Food Basics (Metro Group).
The item in question this week was a special on drumsticks. I’m not sure if you have those in the U.S., but they are an ice-cream treat in a package of six that is extremely high in fat, and therefore very popular here in Canada. They regularly run in the $5 – $6 range, and they were featuring them at $2.77 each.
Of course they were sold out by the time we got there on Sunday, which is pathetic when you consider it was only the third day of the sale.
Checking out both the “sale bunker” and the regular freezer section where these are normally kept, I encountered, in one minute, four “sets” of shoppers who were extremely ticked off. I’m still not convinced these drumstick things are healthy, so I could go either way on this issue, but these people were genuinely angry.
It made me wonder what Sobey’s gains by being sold out so soon. Maybe setting the price at $3.77 instead of $2.77 would have tempered the demand enough for them to keep stock. Maybe they planned to supplement the stock with a second delivery; though we come into the city from the country, so that wouldn’t help us.
But I thought about it:
- Nothing left for the Sunday customers
- Nothing left for the Monday customers
- Nothing left for the Tuesday customers
- Nothing left for the Wednesday customers
- Nothing left for the Thursday customers
…and then it all starts over Friday with a new flyer, more “tease,” more “bait and switch,” more anger.
Now let’s give Fresh Co the benefit of the doubt and say that my “four irate customers in sixty seconds” thing was an aberration. Let’s pretend there are generally only four irate customers every five minutes.
That’s
- sixty upset customers an hour
- if the store is open 8:00 – 8:00 that’s 720 upset customers per day
- if they were out of stock for five of the seven days that the item was advertised — and they don’t do rain checks, remember — that’s 3,600 upset customers for the balance of the week.
Because of one item.
And completely under-estimated demand.
This is where I have to give No Frills credit. They really load in the merchandise, obviously because they’ve run statistical simulations like the one I just described.
Let’s say that half of the very angry types I ran into cool off and decide to give the store another try the next week. That means they still run the risk of having lost 1,800 customers.
In one store alone.
Multiply that by 50 stores, and you’ve got 90,000 ice-cream-treat-eating customers angry with you.
And the next week it’s an orange juice special you can’t keep in stock. (Happened.)
And the week after that it’s a special on cheese. (Happened.)
And the week after that you’re wondering why sales are declining.
They should have asked me.
Or issued rain checks.
(We did not return the next week.)
Now, Even Grocery Shopping Involves Reading the Fine Print
It took some doing, but this offended me so much that I came out retirement again with another consumer advisory…
If something is advertised as 2/$4.00 that works out to $2.00 apiece, right?
Not necessarily.
Often stores reserve the right to enforce the “two-for” part of the equation. Some don’t; they just might like the 2/$4.00 thing because it fits a pattern of having all $4.00 items on on page of the weekly flyer.
But the Loblaw group of companies in Canada has introduced the secondary, “if purchased individually” price concept in their stores recently; stores which dominate the grocery business in Canada under names like Valu-Mart, Your Independent Grocer, Freshmart, Real Canadian Superstore, and Loblaws. They also operate the No Frills chain, but I cannot prove if the practice exists there or not.
So far, not a big story, right?
But you really have to watch the signage at these stores since the secondary price does not appear in the flyer and is written in a teeny, tiny font on the shelf-talker in the aisles.
But still not a story.
The problem at Loblaws is the price jump. Those 2/$4.00 items are gonna cost you $2.79 if you only pick up one. A price 40% higher than what you’re expecting.
Customers are not happy. It leaves a bad taste.
But the real story here is, the staff aren’t happy. They feel like they are employed by a con artist; that they’re being made to take part in a scheme.
And they are more than happy to refund your money or make adjustments if you complain.
That way they get to sleep at night.
Grocery executives, who have no consciences, sleep well, too.
Canada Post Takes 120 Hours To Ship Parcel What Would Be A Two-Hour Drive
I guess it’s been awhile since I blogged here.
I haven’t forgotten the issue of consumer nightmares. I’ve just been busy writing and speaking on so many other fronts. And also managing a retail enterprise of my own. Which brings me to this story, which is decisively Canadian. You see up here the post office is a crown corporation; you’re basically dealing with the government, and nobody tells the government what to do. And for them Thursday was a day off. The whole system shuts down on Remembrance (Veterans) Day…
Every other week, I ship a parcel from my home town to a town just two hours away by car. I pay for a two-day service, though usually the parcel arrives the next day. There’s no reason it shouldn’t. Every other courier company does the two hour distance in a single day.
This time we mailed on Wednesday. There was no service on Thursday. We knew that. We assumed it would arrive on Friday.
It didn’t.
Canada Post maintains that two business days means two of their business days.
So a parcel mailed on Wednesday now won’t arrive until Monday.
$25.00 for a 7-pound package that’s only going a two hour distance down the highway.
And it’s going to have taken 120 hours to get there.
And I can’t do a darn thing about it…
…or maybe I can. We’re simply not going to do that bi-weekly shipment anymore. Our new motto: The Post is Toast.
Welch’s Grape Juice Is Re-Labeled; Store Signs Are Not
I’m a big fan of Welch’s concord grape juice. We were once able to buy it in concentrate, but now, in Canada, to enjoy the original taste, we must purchase the large bottles. There are still concentrates available, but they had to re-label these as “Grape Cocktail” or more recently, “Grape Drink.” I don’t know what they contain, but they taste like a watered-down version of the product we once loved.
So the product package is appropriately changed, but apparently that doesn’t stop Your Independent Grocer, a division of Loblaws, from drawing attention to the concentrate tins in the refrigerated cases as WELCH’s GRAPE JUICE.
Sorry folks, but if the manufacturer can’t call it juice anymore than neither can you.
The signs constitute mis-labeled product. That’s against the law.
This is an old battle between Welch’s customers and consumers as indicated in this 2007 blog post.
BTW, U.S. afficianodoes of the brand can still purchase it in many forms including small lunch-sized plastic bottles, and Welch’s concord jam. Canadian grocery stores have about half as many SKUs as their American counterparts. Sad, really.
FOLLOW UP — Can someone confirm if the brand name is available to anyone who pays a fee? Seems the bottles I like are distributed here from Mott’s; whose website doesn’t mention the concentrate. Or are they too embarrased?
Swiss Chalet Promotion Backfires Locally
Nothing says “stupidity” like sending out coupons for a promotion you’re not prepared to offer. On Thursday, March 18th, residents in our local area got coupons from the Swiss Chalet restaurants in their morning mail, only to visit the eatery and learn they won’t be honoured until Monday lunch.
But reading the fine print, it gets worse:
- one of the coupons is only valid Monday to Thursday
- one is only valid for takeout
- one is only valid in the dining room
- the remaining coupon, without saying so, has the March 22 start date
This kind of marketing is proven to do more harm than good. Furthermore, studies have shown that increasingly, people are not reading the fine print. Heck, it’s been proven they can’t even remember what days or hours any specific business is open.
There’s nothing stopping the company from manually overriding their computers in the local franchises in order to accept the promotion codes, once they’ve established the coupons went out too early. Especially when we’re living in a time when it seems the little guy is always up against the big corporation and the default answer is always, “No, we can’t do that.”
For more on this, see the preceding post on this blog where the Casey’s restaurant chain makes an equal mess of things.
When will they learn?
Casey’s Promotion a Recipe for Disaster
Apparently March was a bad month when it comes to my family and Canadian restaurant chains.
This time around it was Casey’s, otherwise our favourite place to eat.
My son, making one of his first credit card purchases, decided to buy my wife a $20 gift card for her beloved eatery. Instead, they told him if he upped it to $25, he’d get a $5 bonus card as well.
Nobody mentioned that the bonus card had a Feb 28th expiry date. That’s only two months from Christmas to grab a meal in the middle of a Canadian winter.
In this case, and the case of Swiss Chalet — see the next post on this blog — both companies are within their right to do what they did. The bonus card isn’t a “gift card” which is now covered under law banning expiry dates, but is like a “reward card” which can still have time limits.
But it’s another example of a promotion backfiring. It’s another example of the customer feeling like the default answer is always “no.”
It makes the company no new friends, and there’s no reason why the computer terminal in the local outlets can’t be overridden to accept a particular promotion code.
Besides, I feel like my son got ripped off. This was a part of his gift to his mom, the first such gift he’s been able to buy with his own money.
It’s just mean spirited. They knew all along that a certain portion of those cards would never get used.
In fact, they were counting on it.

Where Your Comment Cards Go
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January 8, 2011 at 6:39 pm Leave a comment