We sat down with Ramier recently to talk about everything from self checkouts, to the move toward less packaging, and how much of a threat online delivery services pose to the traditional grocery store.
Toronto Star: As you celebrate the 100th anniversary of Loblaws, can you look into your crystal ball and tell me what the next decade will bring?
Greg Ramier: Local matters more now than it did in the past. Loblaws started as a produce retailer. Our first store was on Dundas Street in the Junction. Local mattered then, because that made it easy to get to your store. Now it really matters because our customers like buying produce that’s grown close to them. So over the last number of years, we’ve ramped our efforts up on two fronts. One is increasing the number of local producers — we made a commitment a couple of years ago to buy another $150 million in local produce. And also we’ve started to partner a lot more with growers.
TS: When you say partner, do you mean a supply contract?
GR: The partnership I’m talking about is actually in terms of product development. As an example, there’s a greenhouse grower in Leamington. They grow a lot of our President’s Choice cucumbers and tomatoes, but what we did is we partnered with them to develop a year-round PC local Ontario strawberry. To have local strawberries in a grocery store was really new — it took a lot of effort on their part and a lot of investment on their part.
TS: There are a lot more specialty diets now: vegetarian, vegan, gluten free, ethically-sourced. Will they become an even bigger part of the market in future?
GR: There is a higher interest in nutrition among our customers. That plays out in a number of different ways. We’re finding things like meatless proteins are becoming really important. We’re finding fresh vegetables are becoming really important. We’re finding sustainable seafood and local produce are also becoming more important. We understand that our customers care about all that and we want to have a great selection in it.
TS: Loblaws has innovated a lot over the years, but with some innovations, there’s pushback. For example the self-checkout — some customers are really resisting that …
GR: For us, it’s about choice. We want to be able to provide great full-service checkout experiences for customers who want that or have big baskets. And we want to provide really fast and great checkout experience for people who want to use self-scan.
TS: Earlier this year, you announced a trial with Loop, which provides reusable packaging for a selection of online products. Is that something you anticipate rolling out on a broader basis?
GR: We want to provide choice to our customers and help them reduce plastic consumption. We are going to run it in a number of areas, and then we’d be looking to expand it. It will be one of many things we’re doing to reduce plastic. .
TS: How big a chunk of the market are grocery delivery services, particularly from non-traditional grocers, like Amazon? How do you counter that?
GR: If you look at the whole market, I think the online sale of groceries is still far less than 10 per cent. That is a fact. But I see online being more relevant and more important to customers going forward. That’s why we’re focused on it. But that still means that more than nine out of 10 of our customers really care about the experience when they walk into our stores. It comes back to choice and convenience. We have a very big PC Express business, that will either allow you to come in the store to pick up your products, or have them delivered to you in most major markets.
TS: In a lot of industries, companies either need to be super high-end niche, or mass market discount in order to thrive. How have you guys straddled that line?
GR: If you’ve been in a Loblaws store, you’ll notice that we are neither of those. Our goal is to be a great grocery store. We have to have great service and great products, and good value. For us to be around for the next 100 years, we need to be very good at that. We’re not just competing on price. Service and experience matters. And being what you could call the ultra high-end retailer doesn’t serve Canadians well in meeting their grocery needs.
TS: Speaking of ultra high-end, Loblaw still has Black Label, which was launched to great fanfare but now isn’t particularly prominent. Does every innovation or new product have to be a booming success?
GR: Our philosophy on innovation is listen to the products and services that your customers want, and then try things. And by their nature, that means that not all of them are going to work as well as you want.
TS: One of the things that Loblaw has managed to do well is integrate new companies and their cultures and supply chains, such as Shoppers, T+T and Arz Fine Foods. Do you think we’ll see other retailers added to your mix?
GR: That’s a much broader question that I can’t comment on, but what I would say is that there are always things to be learned from any retailer. And we always try to learn as much as we can, whether they’re a different part of our company, or a different company.
TS: Loblaws has been introducing programs lately that a marketer would call experiential, but they almost seem like things a community centre would have — nutritionists, cooking classes, singles nights. Is this a new development?
GR: Our stores have been hubs for their local communities for years. We have customers who’ve had generations of shopping with us. We actually have colleagues who have generations of working for us. We find it’s very important to build connections with those stores, with the local communities.
TS: What keeps you up at night? What’s do you worry about the most?
GR: Staying close and understanding customer needs. They’re evolving. You need to understand those and listen and try new products and services to stay ahead of those needs. And making sure every time a customer walks into your store, they get a great experience. That sounds really simple, but it does keep you awake at night.
This interview has been edited for clarity and length.