Metro to run Target's Quebec pharmacies

Agreement sees Brunet banner in 18 Target stores by next summer

Metro Inc. has announced that it will operate Target's in-store pharmacies in Quebec.

The partnership between the two retailers will see McMahon Distributeur pharmaceutique Inc., a subsidiary of Metro, and franchisor of the Brunet pharmacy banner, entering into agreements with pharmacist-owners.

Target has announced plans to open about 25 stores in Quebec starting this fall. Eighteen of those stores will have a pharmacy under the Brunet banner.

READ: Metro reorganizes Ontario store network

The Brunet banner pharmacies will begin to open next spring and will operate both the prescription business as well as over-the-counter medicine sales, Metro's president and CEO, Eric La Flèche, said in a conference call with analysts Wednesday morning.

"It will be a store within a store," he said.

La Flèche said the agreement with Target provides an excellent growth opportunity for Metro's pharmaceutical division, particularly for the Brunet banner, "as it enables us to significantly increase our presence, our purchasing power and our sales potential in Quebec."

Twelve of the Brunet pharmacies will be within Target stores in the Greater Montreal Area, which La Flèche said will increase Brunet's presence in that region.

Target-owned brands will be available in the pharmacies, as well as health consultation services.

For example, Target consumers will be able to access the Brunet banner’s exclusive MaSanté online tool, which provides personalized options to access their personal file online.

Pharmacist-owners will own and operate pharmacies within Quebec's Target stores with McMahon providing supply chain, operational and inventory services.

“Brunet’s reputation as a leader in promoting patient health and well-being, combined with its specialized product offering, makes Brunet the ideal strategic partner to help us deliver outstanding patient care in Quebec," Tony Fisher, president of Target Canada said in a statement.

Target operates 62 pharmacies within its stores in Canada.

Brunet will have 168 stores once the 18 stores within Target are opened.

Irene Nattel of RBC Capital Markets said investors will likely favourably view Metro's announcement about Target ``as a signal that it is keep to grow the business.''

Nattel said Metro's pharmacy footprint will increase by 13.5 per cent as a result of operating 25 Target stores scheduled to open in Quebec.

This is not the first time Target has inked a supply deal with a grocery chain in Canada.

In late 2011 it signed a supply deal with Sobeys that would see the grocery chain supply Target with frozen, dairy and other grocery products. Target opened its first store in Canada in March.

The Metro-Target deal also comes less than a month after rival grocer Loblaw announced that it was purchasing the Shoppers Drug Mart chain.

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