Loblaw Cos. has unveiled a smaller pharmacy format that it said will provide more flexibility in deploying pharmacies inside its supermarkets.

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Loblaw debuts compact in-store pharmacy model

July 21st, 2010

BRAMPTON, Ontario – Loblaw Cos. has unveiled a smaller pharmacy format that it said will provide more flexibility in deploying pharmacies inside its supermarkets.

The Canadian food and drug retailer said Wednesday that it opened its first small-model in-store pharmacy at a nofrills store in Ontario.

At about 400 square feet, the new pharmacy format offers the same amenities and convenience as the larger pharmacy model but in a more compact area, making it easier for the company to increase the number of pharmacies in its supermarkets, according to Loblaw.

Loblaw has typically put pharmacies in stores of more than 45,000 square feet, but the company noted that the new footprint will allow it to build or retrofit pharmacies into stores of less than 30,000 square feet.

The compact pharmacy model also features high-density shelving to allow for greater efficiencies, along with new technology and a counseling room, helping to provide a better overall service offering in smaller supermarket locations, according to Loblaw.

Plans call for Loblaw to roll out the smaller in-store pharmacy nationally across its other banners this year. Loblaw has more than 1,000 corporate and franchised stores across Canada, and about half of the stores contain pharmacies. The nofrills banner has over 130 franchise stores across Ontario.

"Our goal is to provide convenience, quality and value to our customers. With this small model, we now have the ability to incorporate pharmacies into more of our stores, which will help complement our customers' food shopping experience," Andrew Iacobucci, senior vice president of the drug business unit at Loblaw, said in a statement. "Within this smaller footprint, we are pleased to be able to provide full pharmacy service with a highly trained and trusted pharmacy professional."

Loblaw said the new format builds on recent changes it has made to some of its overall pharmacy services to provide better service and value.

Last month, for example, Loblaw changed the usual and customary dispensing fees for drug products to one common fee at all of its nofrills pharmacies in Ontario. Nofrills stores also were slated to reduce the co-payment on customers' Ontario Drug Benefits-eligible prescriptions by $2.

And in early June, Loblaw announced that it was extending pharmacy hours for several of its supermarket banners in Ontario as well as deploying technology to expedite the processing of prescriptions. The retailer said the move, among other measures, was designed to enable pharmacists to spend more time with patients.

Loblaw's expanded pharmacy services in Ontario come at a time when Canadian drug store retailers are scaling back service and/or hiring in the province in response to dramatically reduced pharmacy reimbursement from the government's drug reform plan.

When buzz about the potential impact of the drug reform plan reached a peak in April, Loblaw stated that it would be "business as usual" at its pharmacies in Ontario. "We recognize that the government's proposed changes will have an impact on our business," Iacobucci commented at the time. "However, we believe our customers' interests are paramount, and we will continue to offer the services our customers expect from us."