Shoppers Drug Mart (SDM) plans this summer to open an 11,000-square-foot, two-storey store next to the Victoria's Secret megastore at the corner of Robson and Burrard streets, company spokesperson Lana Gogas confirmed to Business in Vancouver.
The store at 748 Burrard Street will be in space formerly occupied by clothing retailer Off The Wall and will contain an expanded beauty and cosmetics section that is about twice the size of usual beauty boutiques at the 1,253-store chain's other stores. The store itself will also be larger than the average SDM store.
"We will have a comfortable browsing environment that is modern, sleek and interactive while also catering to customers' need for one-stop shopping," said Gogas.
Competitors say the high-traffic corner of Robson and Burrard streets is undoubtedly a great piece of real estate yet are not convinced that it will be a profitable retail location.
"They'll be paying a very high lease price for that space," London Drugs CEO Wynne Powell told BIV.
"If a prime location results in you having to raise your prices too much, then it's not a prime location."
London Drugs operates a store two blocks west, on Robson Street near Bute Street, at a site where it has operated for decades and has a long-term lease fixed at a reasonable rate, Powell said.
He expects SDM's Burrard Street store will initially cut into London Drugs' sales, as usually happens when new competition sprouts. Powell added that, after a few months, he expects customers to return when they realize that London Drugs' prices are lower than SDM's.
"We do regular surveys across the board on basket of goods between ourselves and SDM," Powell said. "There's a 10% to 14% extra cost to buy at SDM. We're not prepared to raise our prices on average."
Opening stores with expanded beauty sections within full stores has been a recent trend for SDM. In 2009, the chain's former CEO, Jurgen Schreiber, launched a chain of cosmetics stores branded Murale, which also offered facials and other services.
SDM still operates six Murale locations, including one at Oakridge Centre, but the company, now headed by CEO Domenic Pilla, has no plans to open more Murale stores, Gogas confirmed.
