For $12.4 billion dollars and Loblaw shares, Loblaw purchased Shoppers Drug Mart to fulfill complementary business by playing on each other’s strengths rather than competing and cutting into each other’s market share. Although Loblaw’s share of the pharmacy market is 5%, adding Shoppers health products and services to its grocery stores implies that there will more choice, more offerings, more deals and more convenience. However, the two main concerns that were brought up by Shoppers’ customers were, what will happen to the Shoppers’ membership reward points and will Shoppers’ price increase since Loblaw is more expensive than Shoppers. Loblaw ensures that by this merging, better deals will be available by integrating the companies’ loyalty programs and Shoppers will keep its name. Regarding that Loblaw, Canada’s largest grocery retailer, has finally made its move into the pharmacy market by merging with Canada’s biggest pharmacy chain, in my opinion, Loblaw is becoming more of a monopoly since it has achieved attaining all of the biggest retailers. Going forth I would recommend that by this integration, Loblaw should gain a vast knowledge about consumer’s buying habits and provide economies of scale for a greater profit.

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Source: http://www.cbc.ca/news/business/loblaw-to-buy-shoppers-drug-mart-for-12-4b-1.1342108