The trend of consolidation continues. Just one week after Kroger announced it would buy Harris Teeter, there’s another big deal in the grocery industry. Canada’s number one grocer, the Loblaw Companies, announced it would buy the top pharmacy chain, Shoppers Drug Mart, for $11.9 billion in cash and stock.
It’s likely this acquisition is a direct response to Empire Co. Ltd.’s acquisition of Safeway Canada. Last month’s deal will secure Empire’s grocery chain, Sobeys, as the number two grocer in Canada.
One of the best ways to fend off competition can be to buy a valuable company and block your competitor from obtaining the same assets. From this acquisition, the Loblaw Companies will be able to leverage their large distribution system while expanding their food offerings in Shoppers Drug Mart stores.
As the competitive landscape changes, companies need to remain strategic to continue to grow.
Read more about consolidation in the grocery industry here: Kroger Acquires Harris Teeter to Attract High-end Market
