EQ Bank is buying PC Financial | Page 3 | PC Financial | Discussion forum

Briguy said

Yes, but I think SDM in particular is desperate to drive traffic into their stores, be it with passport photo kiosks, post offices, or ATM machines. So if they can somehow incentivize former PC Financial and EQ customers to preferentially use the ATM machines in SDM stores ( and other Loblaws stores ) , they would be ecstatic. One way would be to give them free ATM withdrawals at Loblaw empire stores, and charge elsewhere. Or add extra features at the SDM/Loblaws stores such as USA cash withdraw ( at a very low FX rate ). And have no fee money orders through their post office or financial kiosks.  

Hrm, not sure I agree here. If that were true, they would be increasing partnerships, not decreasing them. I used to love the idea of expanding PC Financial pavilions to SDM stores, but it never came about, and they've had 5 years to do it. Moreover, where I live in the Southern Interior of B.C. (same area as AltaRed), SDM stores have all withdrawn from selling BC Transit transit passes and tickets. Part of that may have had to do with the launch of the Umo Card, necessitating staff training on selling and activating digital Umo Card activation codes and such, but in large part, I suspect it was because the commission, if any, they earned for doing so (it's not even clear if BC Transit pays them a commission; they may well be absorbing credit card merchant transaction fees and getting nothing in return except the hope patrons will purchase their own merchandise), was so minimal and, but more importantly, they just weren't seeing the increased basket spend by offering this. So, they've withdrawn from selling all BC Transit products and seem to be paring back third-party offerings.

I think they are really taking a hard-nosed look at what value, if any, they get from these third-party offerings. Canada Post, for sure, because they pay them a steady income stream for their staffing and facility costs in handling of point of receipt mail and parcel services for the Crown corporation.

Cheers,
Doug

everhopeful said
I basically only go to my local SDM to pick up parcels, though that is seldom as most shippers now avoid using CanPost. When I first go in the door there is a rent-a-cop staring me down from the beauty section, then I have to push a button and wait a while for someone to attend the postal counter, and if I decide to purchase anything while I am in there, there isn't even a cashier at the checkstand most times, just self checkouts.

The SDM of today is a cold artifact of the days before Loblaws took it over. If they wish to increase customer traffic and average spend, they should maybe look at the customer experience. It is not a very inviting place to be if they hope to sell merchandise at a premium, and charge one of the highest dispensing fees at the pharmacy too.  

And not just that, but most of them aren't even corporate-owned. They're pharmacist-owned, so the pharmacist owner is responsible for paying rent for the space to Loblaw, who, in turn, pays rent to their commercial landlord or records it as profit, and be responsible for all staffing costs. Loblaw may provide the company matching group RRSP, but, ultimately, the pharmacist owner has to pay for those costs.

At least in my area, many of the SDM stores change ownership very frequently (usually every 2 years; 5 year in some cases). Pay attention to the operating company on your SDM store receipt and see how often it changes.

Cheers,
Doug

BlueSky said
@doug and @everhopeful, you are both right. SDM used to be a well-reputed company prior to Loblaw, circa 2012, and their points loyalty program was the envy of retailers. Their customer service today in non-existent, and if it weren't for their PC Optimum points program, which was heavily modified, they wouldn't have been leading the pharmacy market. They can attract customers with their weekly points promos.  

Thanks, BlueSky. I would agree with your comments as well.

I think retooling and focusing on their core competency, pharmacy, is probably the right strategy, but that too is challenged by digital adoption of online mail order pharmacy services like MedNow, Express Scripts Canada Pharmacy, MyPharmacyOnline.ca, and Costco Online Pharmacy that offer value-added services, free shipping, and lower dispensing fees.

I think, ultimately, is they need to rationalize their SDM network and close stores such that their stores aren't cannibalizing each other.

Cheers,
Doug

RetirEd said
The owner of my local SDM has been there (irascibly and always on the edge of anger) for over twenty years [...]  

Understandably too. I suspect the source of that is Loblaw's corporate antics and treatment. Next time you see them in store, try to engage them in a brief conversation. Ask them an open-ended, off-the-record question like how Loblaw Companies Ltd treats them in terms of promised marketing initiatives, unexpected monthly fees or costs, distribution and fulfillment, staffing assistance, etc.

Cheers,
Doug

Cosmetics are a huge profit centre for these "pharmacies."

Peseta said
Anybody here thinks that with this acquisition, EQ will make PC MasterCard (or whatever the credit card might be called) a no-forex fee card?

Their debit card is ...

That's hard to justify with the lower interchange on Mastercard credit cards (as low as 0.72% for small business chip-and-PIN or tap charges) compared to Mastercard prepaid cards (at least 1.44%).

The PC Mastercard credit cards also reward at least 1% compared to the ½% reward from the EQ Bank card.

EQ Bank may also not be keen to continue the 3% reward for Loblaw grocery store charges to the PC Financial World Elite Mastercard when the interchange is just 1.56% for the chip and the tap charges. That 4½% reward for Shoppers Drug Mart purchases really stands out when the card issuer is no longer the owner of the Shoppers Drug Mart chain.

Peseta said
Anybody here thinks that with this acquisition, EQ will make PC MasterCard (or whatever the credit card might be called) a no-forex fee card?

Their debit card is ... so, my hope is that they'll try to differentiate themselves from everyone else with a no forex fee credit card.  

PC Financial's Spending account "debit card" – really prepaid Mastercard credit card – is fx-fee exempt similar to EQ Bank's offering. I sense [TV advertising, etc] that EQ wants to compete with Wealthsimple and its hard-to-obtain fx-fee free Visa. A real credit card, with or without fx fees, would be a nice addition to EQ's product line.