Shoppers Drug Mart is phasing out its electronics section due to low sales.
During a call on Wednesday, Loblaw Chief Financial Officer Richard Dufresne told analysts that electronics like computers, TVs and cameras “are extremely low-margin sales that don’t contribute to the consumer basket,” reported La Presse.
He also suggested that a majority of customers who buy electronics from Shoppers Drug Mart don’t usually accompany it with other purchases from the store.
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For example, when purchasing a gaming device, shoppers typically won’t add shampoo, skincare or medication to their cart.
For now, there are still electronics on Shoppers Drug Mart shelves but don’t expect the retailer to restock. Some items online are already out of stock.
This reveal follows the release of Loblaw’s third-quarter results.
The company, which owns Shoppers, made even more money in its third quarter this year compared to last year.
Its net earnings available to common shareholders were $777 million for the quarter that ended on October 5. That’s $156 million (25.1%) more than the $621 million the corporation made in Q3 last year.
According to the report, the company’s revenue for the quarter was $18.54 billion, up from $18.27 billion last year.
Loblaw says several factors affected its boost in profits and revenue. First off, a Federal Court of Appeal decision reversed a charge related to a previous President’s Choice Bank (PC Bank) commodity tax matter, positively impacting net earnings by $125 million.
The grocer says drug retail sales outperformed food retail in the quarter.
The phasing out of Shoppers’ electronics section has had a bit of an impact on sales.
“Drug front store sales reflected continued strength in the beauty category but were pressured by the company’s exit from certain low margin electronics categories and lower customer spend on convenience items,” reads the report.
Despite a year filled with backlash from Canadians frustrated with skyrocketing grocery prices, Loblaw says its supermarkets attracted increased customer visits in Q3.
“Food sales growth reflected the ongoing strength of the Company’s Maxi and NoFrills hard discount stores, and its growing selection of multicultural foods across its banners, anchored by strong performance in the T&T banner,” reads the report.