Got up this morning and Heathrow closed yesterday. We are going to lose a couple people because of that. Oil is back up above CAD 100 bucks. Uh-oh, somebody might be stuck in the office. Going to rain a little bit. It is okay, we can deal with that, but get here this morning, still have the butterflies. Glad to see you guys make it out today, so thank you very much. I look around the room here and I have been working with you guys for many of you for over 10 years now. It is almost like it is about time we have done that. You have met my folks before in conferences and meetings, but you have not met my family before. That is why I am excited today is you finally get to meet the guys and gals that I work with every day that make this such an exciting place to work.
Welcome and we have got some great breaks lined up, some great food, some socializing. Dive in, get to know the family, and sit back and enjoy the day. We are welcoming people online right now. Again, I am going to thank you for joining us for the day today, and thank you for investing your time with Loblaw. I am going to start with a quick land acknowledgement. I would like to acknowledge that we are gathering today in East Gwillimbury on lands traditionally used and cared for by the First Peoples of the Williams Treaties First Nations and other indigenous peoples. We also recognize the Chippewas of the Georgina Island First Nation, East Gwillimbury's closest First Nation community, and their enduring relationship with the lands and waters of this territory. We are grateful for the opportunity to gather here today.
We honor the indigenous people who have cared for these lands for generations and who continue to do so today. Let us get the day started. We have lined the agenda, a little bit of a format. It is not totally clean, but Retail & Beyond, the theme of today. We are going to start with the retail excellence, the stuff that we do every day, the reason we get out of bed, what we do for our customers, with our vendors, with our partners, and what drives our superior performance. Then we are going to spend the rest of the day focusing on what we do differently, our differentiators from our peers. We call that enhanced retail.
We are also going to dive into some of our unique growth drivers, and we have got some folks up here who will spend some time giving you a little bit of a deeper dive on what is planned and how to think about those businesses over the next five years. I will draw everybody's attention to our forward-looking statements. The information is posted on the web and our filings, so I encourage you to have a look at that. The run of play for today, we have got a couple breaks organized in there, so a chance to mingle. There is food in the lobby. When we cut for lunch, we will be going a short hop across the parking lot. If you are into self-driving vehicles and big trucks, there is some pretty cool equipment lined up in the parking lot to take a look at. Our new partners from EQ Bank are here.
They've got a display, their activation truck set up, so I encourage you to stop by and have a chat with them. Lunch, as I'm sure you all expect, is going to be amazing. We're doing an eat-together format with the executive team, so pull up a seat and enjoy that time. Washrooms in the hall. If somebody needs to jump on a call or tend to business, if you go out these doors and down the hall, there's an office area there. Feel free to help yourself. Last piece, we're going to save the Q&A till the end of the day, so I'd encourage you guys to stick around. We'll manage that at the end of the day. Richard and Per will come up. They'll emcee the Q&A and the management team will be here as well to also participate in that.
With that, I would like to welcome Per Bank, our CEO, to the stage.
Thank you, Roy, and welcome everyone. I have been looking so much forward to seeing you all, and also to get your feedback on the great facility we have here. For me, it's amazing. It's just outstanding work Rob Wiebe and his team have done. As you know, we're building another one very similar to this one. It's like being a boy in a toy shop. It's fantastic, and I hope that those of you who've been on the tour this morning, you enjoyed it. There's another one this afternoon, if you want to go again. That is allowed. Anyway, I thought I would give a little bit background on myself.
I have met most of you, and the same with my colleagues later, because today is all about getting to know us as a team and to get to know our team members more than just to get to know Richard and I. I'm Danish. I've been in the army as a lieutenant of the reserves. I've studied engineering. Started to work in an engineering company for six years. I worked in many countries. I worked in the U.S., I worked in Hungary, I worked in England. I worked across many markets in retail, whether it's Sweden, Norway, Denmark, Poland, Germany, and Hungary, and now Canada. I must say that being in Canada is the best place I've been so far. I really, really enjoy being here. Started my retail career in 2001. Before that, I worked for Mars.
Became a CEO when I was 35. I moved to Tesco, was CEO of Tesco in Hungary. It was mostly hypermarket, so like the Real Canadian Superstore, that size, more than 100,000 square feet. A lot of great learning for me at Tesco's operating models. Was promoted to be part of the Tesco executive team, being responsible for the non-food and apparel. I was back home in Denmark working for Salling Group, also very similar with family ownership. That company was founded in 1906, and the first 94 years, it was first run for 47 years by the founder, and then another 47 years by the founder's son. So when I started in 2012, I was only the fourth CEO, so that's really, really consistency.
When I quit, trust me, the founder's son's widow was not happy because only having been there for 11 years, that was not good enough. Anyway, I couldn't resist coming to Loblaw because coming over here, talking to Galen, talking to the board members, there's so much to look forward to because coming into Canada, it was not a turnaround because how often do you have an opportunity to take on a job that's not a turnaround? Because it was a very successful company, and there was something to build on because if you look at what we had three years ago, it was outstanding world-class control brands. It was outstanding loyalty, the best loyalty program in Canada, maybe in the world.
The retail excellence, you might not appreciate it, but when I have friends over, when I have old colleagues over visiting Canada, the retail excellence in Canada is outstanding. If you go south of the border, it's not as good. If you go to Europe, it's not as good either. Still, of course, there's a lot that we can learn from others, and I think we'll talk more about that later today. But going for this job was sweet for me at this time of my career. I've had some board experiences, not to forget on that. I've been a part of the Danmarks Nationalbank, Pandora, and currently at A.P. Moller - Maersk, just to get some more learnings, to get some more input.
I also brought some guiding leadership principles, maybe very down to earth because that's how I see myself, that's how I do business. The first one is share the good news as well as the bad news. I think sometimes in Canada, we are a little bit too nice. That's why we try to come with all the solutions. But if I don't see the bad news, we as a team, we don't get to make the right decisions. So only getting the good news, we won't be able to become better. So I think that's important. Everything we do, if we put the lens on that it has to be better for customers, simpler for staff, and cheaper for Loblaw. If it just applies to one of those, then we can go ahead, and that's kind of a good guiding principle. Do that or not.
So better, simpler, cheaper. Then we need to make fast decisions and don't be afraid of just adjusting as we go, and test fast and fail fast. I think in retail, it's so easy to say, "Okay, we're going to do this. We're going to do it in a district, see whether that works. If it doesn't work, we either stop it or we adjust it, and then we move on." One example where we failed, or not really failed, but one that we learned from was when we opened the no name stores. The no name stores, we did it for a purpose to show Canadians that we could give them value. We were 15% cheaper than the cheapest around the country, so we could give products cheaper. But customers, they didn't appreciate that there was no offers because they actually did not know the prices of the single products.
So we closed them again, but we tried it. But now what Melanie Singh, who is the president of Hard Discount, she will talk to you about later that we took some learning from those no name stores, and that's why we are now starting to build stores in smaller catchments, where we can go down to maybe 4,000 or 5,000 inhabitants and provide cheaper groceries to customers, like 30% cheaper than the competitor next door. So that's kind of the learning. So test fast, and you will see during the day that we are testing a lot of great stuff. Then bringing proven ideas to Canada, I'll come back to that. Then how I think it's important how we work.
It's a third strategy, it's a third being tactic, and it's a third ratio because when I meet a lot of young students applying for jobs, they say, "I just want to work with strategy." I said, "Yeah, that's fine, but I don't even spend my full time in strategy." It might be a third at most because in retail, it's so important that you know what's going on, whether it's in the stores, in the distribution centers, around the office every day at lunch. I just pick random tables at lunch and sit down and ask questions with my colleagues. Sometimes some of my teams say, "Okay, where did you get that information?" Yeah, it's all at lunch, and I get so much great insight at lunch. But I think it's being out there listening to customers.
So I would say I'm still spending one day a week with customers. Then work hard and have fun, and I think you will notice that we have a lot of fun with our team because we are spending so much time at work. It's my hobby as well. If you don't have fun, it's not worth it. So this having fun, having a lot of deals, and they're starting to get used to the Danish over at least politely enough to last sometime. So that's good enough for me. Then I spent my first time really interviewing a lot of customers. I still do that. As I said before, you are coming back with some ideas. One irritant for customer was when I visited the customers in the Hard Discount, they hated the multipacks.
The multipacks being like, if you buy one ketchup for CAD 5, then you can buy two for CAD 8. It's feeling like you're being forced to buy more than one. If you're on a tight budget and you only have CAD 50 to spend, you don't want to be forced to buy two ketchup. You get really annoyed about it. When I spoke to one of our store managers, she was almost crying when I told her that we're going to take it away because that was big relief to them listening to customers every day. We did it, and you can only do it when you're growing because in the beginning you lose a little bit of sales until customers get used to it, and after they get used to it, they're really happy about it.
We still have it in the other parts of our business because it's driving a little bit of sales, but it does not belong in Hard Discount. That's just one example from customers. Last week you see that picture with a thousand of new lower products. I visited Zehrs in Cambridge nearby Toronto, where we are testing lowering more than 3,000 prices. Again, talk to customers, look at the prices because the decision we make at head office, if we don't see that deployed in stores, it does not happen. So a really good test that we're doing and let's see where we take it to. On the family side, in the beginning, I was a lot alone. My wife, she was a member of the Danish Parliament. She didn't run again. Now she's here. My oldest son, 27, he moved here.
He got his three years work visa last Sunday, and his fiancée is here. My youngest is coming in January, so we'll be all six of us. They're starting off to live with us. Let's see how that goes. Probably won't be for that long, but like being from one to six just shows that we have really embraced this country and we love it here. I think that's enough about that. I'm pleased that we have continued the strong track record because when I came, there was a lot of strong results before me, and thank you to Galen and the team who have done that because they have secured a really easy runway for us from 2023. So our job was how could we then continue the growth? How could we take it to the next level?
Here is just some of the ideas that some of you have heard about before. The first one, which is important, is how could we expand Hard Discount? How can we expand Hard Discount? By building more small stores. Remember, the stores that we're building are small, so we can take the one at Richmond Street. Its sales area is about 7,000-8,000 square feet. So one of Frank's big Real Canadian Superstores, you can fit 13, 14 of those small stores into a big Real Canadian Superstore. So small stores, but they work. Those of you who have met me a few times, you know what I'm going to say now, but I think it's so important to understand why small discount stores are working. When, again, you only have a limited amount to spend, you walk into a small discount store.
You don't get tempted to buy up in the range. You buy what's on your shopping list. You can control your budget. Whereas you go into a big hypermarket, you get tempted, and you buy all sorts of apparel and non-food. We would like customers to do that when they go into Frank stores, but that's how you can control your budget. Plus, it's a lot of convenience. It's fast. I love to spend an hour in a grocery store, but unfortunately, not a lot of our customers do that. But in a Hard Discount, you can do your shopping in 15 minutes. You're in and you're out. That's why these two reasons are the two reasons why small discount stores will continue to work. Melanie will talk more about that later.
Value does not only come in Hard Discount, it also comes in the rest of our portfolio. A way to show value is one other mechanic that we call Hit of the Month. Remember, we deployed that three years ago. It's using our purchasing power to buy cheap. We buy three products for 2,400 stores and we have that available for a month. We can really go lower than anyone else. Some competitors might be able to match the price, but they won't be able to secure the stock. That's one way to show value. Another way is in our supermarkets, in Loblaw or Zehrs, that we show the savings. We call out the savings. We can call out the value and the savings at the same time as having the quality.
Right-hand side, you know that I've been talking about it and Frank will get back to it. I think by the end of this year, we will have more than 60 stores, and the reason why we continue to pursue success with the right-hand side is that we spend in 180 Superstores, we spend 35% of the space, but only around 15% of sales. It's actually margin enhancing. If we can get that sales up, it will help everyone. One example is that we moved the pet food to the right-hand side to get more people over there so they can explore what's happening. In the corner, we have the great Toy section, and toys is up +30%. In Shoppers, Gregers will come back to talking to you about how he's thinking about reinventing the Shoppers. That's really exciting.
We have started a little bit. We have done some food realigned. We have six stores now where we have added more food product and adding it into a lower price, and that's working well. It's living up to the expectation when we started, we only had 60. It's giving a good comp sales to front store. Remember, we have 1,400 stores, so a lot to come. Again, sometimes we go and it doesn't work as we thought, then we adjust, and then we move on. We're very persistent in getting to our priorities. AMS is another idea. How can we source together with European retailers? We're sourcing together with Ahold Delhaize, my old company, ICA, a British retailer. Why wouldn't we take some of the core commodities? Why wouldn't we buy tomato sauce, spaghetti together? It's 5x our volume.
We think we're big in Canada, but we're also competing with some of the biggest players in the world, so we need to utilize all the skill and scale that we can. Enough about this. Our financial framework, just some guiding principles that we want to secure, and we believe that we can continue to deliver going forward. The growth is also guidance because you know that we have about 4% growth so far this year. If we add the new stores and the comp sales, it would be around 4%, sometimes a little bit less, sometimes a little bit more. But if you get that top line growing, then we can also dilute our SG&A, and that will help us to continue to deliver. Then of course, we don't have a contract with our customers, so tomorrow they can decide to go to one of our competitors.
We need to be on our toes every day. We need to earn the trust for our customers. Canada is actually quite a rational market. We have five players. Five players is maybe 80% of the market. I have been working in other markets where two players would have 80%, not five. So it is a good, rational market. Plus, there'll be another 20% out there which consists of 10,000 grocers. So I think it's a good, rational market and also a market where we can continue to grow. We're growing Hard Discount, and we have said that we are building 75 stores this year. We built about the same last year, and I think it will be about the same the next few years. Again, for me, with my background, it's actually not a lot.
Also remember, about half of that is Shoppers Drug Mart, and then we have T&T in the U.S. and we have a few market stores, and then the rest, 30 to 40 stores would be Hard Discount stores and primarily small stores, Maxis and No Frills. 2023, our Hard Discount pen in Canada was 16.9%. So even with the square footage that we added, which in my mind, compared to other countries, is not a lot. We only gained 1.1% points of growth in the Hard Discount sector. Hard Discount sector would be excluding Walmart and excluding our Real Canadian Superstore, because for me, this is hypermarket. This is not my definition of Hard Discount. So 1.1%. If you continue with the same growth, which it looks like the market will be, give us 10 years and we will be at 21%.
It's still below U.K., it's still significant below Germany, and it's still below Poland. I think this is important because that's where customers want us to go. Customers, they want more value, and that's what we're giving it to them, and we want to give it to them closer to where they live. Then we believe we do have the right strategy to continue to deliver on our framework. The core retail, the retail excellence, we've talked a lot about it. You'll hear more about it later. We know how to drive our core business. Then we have the beyond. So the beyond, the title of today, we're doing much more than that. I think Lauren is coming up next after me. Listening to her, you will see that the digital engagement, the personalization is something that's really working for us.
When I look at return on sales on our personalization, it's doubled in three years. We're getting better and better to use our customer data. That's the enhanced retail. It's connected healthcare. We'll get back to that. The private label leadership, technology. There's so many things when I compare to other companies where we are leading, and we're just starting to harvest some of the benefits there. The growth businesses, I'll get back to that later. Adding that all together, I think that's a really good enabler for us to continue to be confident in delivering what we are promising. Before we go into the specifics, maybe just go up in the helicopter and look at how we placed in the Canadian food industry. We are the third largest. We have more than 1 billion customer transactions.
We are now growing 4%, but if you just grew 3%, we're growing by CAD 2 billion. The others are quite smaller than us. Us growing with 3%, we will still grow a lot more than the rest and thereby also taking share. We are Canada's largest retailer of mass and prestige cosmetic. Really important for us. We are a healthcare partner for more than 20% of Canadians. Our business on the whole is quite easy to describe. If we take Shoppers, it's about a third of our sales. Supermarket is a third of our sales, and Hard Discount is a third of our sales. Within the supermarket, half is hypermarket and half is conventional. I think we are having a really balanced portfolio to serve the needs of Canadians.
If you want high quality, you go to a Loblaws, you go to a Pacini's. If you're a big family, you want value for money, you go to Frank's or your Real Canadian Superstores. If you want to save money, you go to Hard Discount. If you want to provide health, if you want to look after yourself, if you want to go for beauty, you go into the Shoppers Drug Mart. Profit-wise, we have said many times that Shoppers Drug Mart is relatively giving us the most profit, but every part of our business is a healthy business. Every part of our business is growing at the moment. We have a unique ecosystem, which gives us unmatched relationships with our customers. Again, we have the number one loyalty program in Canada, and we keep developing it. We have the brands, we have e-commerce.
E-commerce, we have more than a 40% share in e-commerce in food. A huge penetration. I think the trend in Canada would just be above 4%, so still room to grow. I don't think it'll become above 10%, but if it will just double, then we are very well positioned to take our part of that growth. E-commerce and Shoppers, we're next to nothing. That's actually quite good because that's a huge opportunity to get into that area. Greg has just hired a specialist within e-commerce who's working in Lauren's team, working with Shoppers to take that to the next level, because there's so much we can do in beauty, in e-commerce. BOPIS, buy online, pick up in stores. We have 1,400 Shoppers around the country. That's an area that hopefully will give us some growth in the future. Our Beyond.
So these businesses, it is about CAD 400 million in profit now and growing. It is growing faster than core retail, and it is margin accretive. We will have Rob Wiebe talking about supply chain, Lauren about retail media, Sonya about Lifemark, Tina about T&T, and Richard, he will touch on EQB. Look forward to these presentations. You will get some insights that you normally do not get. We are industry leading in AI. That is probably where I, over the last year, have been most impressed. Some of the things that we can do is transforming the way we work. Take Robin. It is a tool that district managers and store managers are using. They can run the numbers on a Monday, and they can ask, "Okay, how do my waste look?" Waste is a big component of cost in retail.
The machine that will come out, they will say, "Okay, in this store, the district manager can do it for all the stores, or a store manager can do it." Then it will say, "Okay, from Monday to Wednesday, you had more waste than normal." Then they will come with a solution. You did not reduce to clear in due time, or you bought too much. Not only will it point out the problem, it will also suggest a solution. Normally, it will be completely impossible to dig into all the reasons, so we can get information much faster than we have been able to in the past. This is changing the way we work. Take a district manager. Having worked in retail for so many years, it is so difficult. How do you manage the district managers? They have their own hobby horses.
They know what to do. Now you have a tool, and they have a tool. They can plan their week. They can see what stores have what challenges. This is outstanding. Most importantly, of course, all our colleagues. I am impressed about the values that we have in our business. Trust me, it is a people-first business. One thing is to go into a Maple Leaf Gardens at Carlton Street in Toronto. Another thing is to go to our local Superstore in Moncton. When you go there, it is family. You can hardly find a more cohesive management team that you will see when you go about in the country. It is like people have worked for us for 10 years, 20 years, up to 50 years. You just feel so welcome.
If you are bored and a little bit stressed working in the head office, you just need to take your car, go somewhere, meet a store, and then you will get back in good mood again. That is at least how I do it. Finishing on a note on our team here. We have, in my mind, an extraordinary team. It is very diverse. You will see today that we probably have, or we have more female percenters than men. The insight that our team is bringing is extraordinary. Just take one example. Sonja Boch, who is leading our Saturday. She is German, worked for Amazon, worked for BCG, and have now heading up Saturday for the past three years. Frank Gambioli, 40 or 41 years in the business. Tina, literally born into the T&T business. You cannot avoid being excited when you listen to her. Mary, tons of experience in marketing.
A lifetime almost at Loblaw. The same with David Markwell. I haven't seen anyone running IT and system as he does. Danni Peirce, Brit, coming with experience from Australia. From the latest Singapore. We have a very diverse team bringing a lot of new ideas in. I think that's what makes my job so fun, that I work with an extraordinary team. This is the team, but outside this team, we have three more of our executives who are presenting. We have Tania on GLP-1s, we have Sonya on Lifemark, and we have April on brands. On that note, I would like to ask Lauren to come up and take us through some of the tech, the AI, and the loyalty.
On the agenda, Lauren is up twice, and that's not a coincidence because there's so much going on in that field, and that's some of the areas that we have been most proud of talking to you about. Welcome, Lauren.
Good morning, everybody. Thank you, Per. Where'd he go? I lost him. Oh, there he is. Of course. He's sitting with Danni. He's usually the tallest man in the room. A pleasure to be here today. As Per mentioned, Lauren Steinberg, Chief Digital Officer at Loblaw. I oversee our connected commerce ecosystem, which is a combination of digital, e-commerce, retail media, loyalty, underpinned by our AI efforts. Like you said, I'll be up here twice today. First, I'm going to talk about AI. But before I do that, I just wanted to introduce myself. I joined Loblaw about 13 years ago. I was actually employee number nine on the Loblaw digital team. I think at the time our ambition was, let's see if we can do e-commerce well. We had CAD 0 in e-commerce. We're now exceeding CAD 4.5 billion in sales.
That's what the number that we did in 2025. Tremendous growth, obviously, to accomplish that. We've done so much more beyond that as well, and I'm so proud to lead a team that's doing such incredible work connecting with customers across Canada, in new and innovative ways. I like to say I have grocery in my blood. My family was in grocery retail. I grew up around grocery retail. We had a grocery chain from Quebec called Steinberg's. I looked it up this morning just to double-check, 1917. So not as old as Loblaw. Maybe we missed it by a year, but I grew up in grocery stores, walking the aisles. I used to spend Saturdays, my dad was a merchant for M Stores, which was their general merchandise business, so I spent my Saturdays. He was a merchant for toys, and as a kid, go into the office.
He was a hard worker like me. He was in the office on Saturdays, and I used to get first access to the best toys in the 1980s, which was a great time for toys. Toy heyday, if you will. I am so glad. I like to think that I ended up, I was saying to Irene this morning, that I ended up in a role similar to a role that I would have had we not sold the business in the 1990s. We are doing incredible things here when it comes to technology, in particular with AI. We are already changing how AI is interacting with customers, how customers decide and explore and shop, and how colleagues at Loblaw get work done. For anyone who knows Loblaw well, I think you would say that we are a technology-driven organization. We always have been.
We have been one for a very long time. Actually, AI, in particular, also not new to Loblaw. We have been applying machine learning and AI across our business for decades. Loyalty, promotional algorithms, a number of different products and services across how our business operates. What is new is, I think we can all agree, this moment that we are in now, the rapid evolution of generative and agentic AI. I am sure you are all using it in your day-to-day, whether it be for work or for personal. The technology has evolved dramatically, and with it, what is possible, particularly for an organization of our scale. Because we have spent years, David in particular, spent years building this incredible scalable infrastructure of data and technology, and certainly, probably most importantly, talent, we have been able to move remarkably quickly.
We have something already that I think many companies will spend the next several years working very hard to create. That is agentic and generative AI deployed at significant scale across both sides of our business. We are using it to fundamentally change how customers experience our business, how they discover, how they shop, how they access services, and we are using it to change how work gets done inside of Loblaw. AI is increasingly being embedded into our business in some incredible ways, which I am going to share, and driving meaningful results. I am going to show you both sides of that equation. We are going to start with customers. For customers, we believe conversation is going to be the most common way that they will engage with us.
That is why we are investing, yes, on chat experiences within our first-party platforms, like our websites, our apps, but very importantly, on third-party answer engines. This is like ChatGPT, Claude, Gemini. This is where millions of Canadians are already discovering products and services and getting answers that are influencing what they buy and how they buy it. Loblaw is the first and only grocer in Canada to bring grocery shopping directly into ChatGPT. In fact, I think we were the first one globally, and the only others that have really done it are grocery marketplaces. So aggregators, folks like Instacart and so on. However, we didn't do what those others did, right?
We didn't say, "Let's take our existing experience and let's port it over and let people do exactly what they can do with us, with them." We said, "What are people using these platforms for?" Meal planning, recipe ideation and exploration, new diet exploration. The reality is when people are engaging with these platforms or getting an answer, it's static. It's a list of items, and if you are using them, well, then you've got to write those items down, and you've got to go to your store and walk your aisles and find them, or maybe open a bunch of tabs on your browser and search those items one by one. That's a dead end, and we love fixing dead ends.
We said, "How do we actually take that static list, that answer, and turn it into a live interactive experience?" Customers can tell us their postal code. We can surface all the stores around them, and once they select their store, they can see those items, add them directly into a cart, and when they're done interacting and conversing and maybe shopping more in that interface, we drop them right back into our environment, our apps, and our websites to transact. We've been seeing some really incredible insights, learnings, and results. We're seeing lots of new customers, new to not just PC Express, but new to Loblaw coming through these channels. We're seeing an incredibly high conversion rate. This is our second-highest converting channel, meaning customers are coming from this channel and they're converting, they're checking out at an insane, incredible rate.
That's because they've already got the intent. They've already made the decision. So when they're coming to us, that decision is already complete. My favorite, they're adding more stuff once they do get there. So they're interacting with ChatGPT. They're adding the stuff that they discovered over there, but they're coming to us, they're adding even more, and they're checking out. So really, really exciting. We're continuing to increase or evolve that thinking into Shoppers and Joe Fresh. How do those businesses or general merchandise, how do they play a role inside of these experiences? We're looking at all the other AI platforms as well. For example, we're going to be one of the first retailers to partner with Google when they launch their Gemini AI shopping experiences later this year.
These efforts represent a really important step forward for Loblaw and agentic commerce for Canadians, and it positions Loblaw as the leader on third-party applications. We are absolutely leading the charge here, and we're making sure that we're participating with Canadians as AI reshapes how products are discovered and purchased. We're just as excited about, of course, we want to win on third-party experiences. It's where a tremendous growth is happening. We also know that conversational interfaces are going to become increasingly important in our first-party experiences, our apps, and our websites. ChatGPT, other general-purpose assistants, they have reset the bar for how customers expect to discover and navigate and shop. Our focus has been to bring that same conversational simplicity that you all love, that Canadians all love, into our platforms, but make it meaningfully better, meaningfully more powerful.
You might say, "Well, how could you do that? You are Loblaw. They are some big AI company." The reality is, our conversational experiences are not just answering questions. They are connected to real-world retail. We have real-time assortment and inventory. We have live pricing and promotions. We know your preferences. We have the ability to actually fulfill the items that you are exploring and that you need. We understand the intent, and we let them act on it. We are already seeing really positive signals from early launch for our PC Express chat experience. Customers actually have higher baskets when they engage with our chat experience. I think of this idea of answer and action. Of course, we are going to be good at the action side of that. We are a retailer. We have got that real-world retail connectivity.
Perhaps nowhere is that answer and action more powerful than in health. Because when someone asks a health question, the best outcome is not really an answer, it is actually care. Canadians have been going online with health questions for decades. We all know Dr. Google. Increasingly, they are taking those questions to AI engines. The vast majority, if you actually ask them and you look at the numbers, the vast majority do not trust the information that they are getting. What people actually want, what Canadians actually want is an answer that they can trust, grounded in the healthcare system that they live in, the Canadian healthcare system, and they want help figuring out what to do next. That is why we have built and launched PC Chat. This is the first of its kind. It exists inside of the PC Health and the Shoppers Drug Mart applications.
This is a free AI-powered conversational health experience built specifically for Canadians. It is hyper-personalized because it is connected to your health profile. It is informed by thousands of Canadian healthcare sources. We have trained these models on thousands and thousands of specifically Canadian healthcare sources. We have literally built this platform, engineers sitting alongside pharmacists, clinicians, and some of the best health practitioners and doctors in the country. Our ambition here is much larger than just answering questions. We are creating an intelligent front door to healthcare, one that understands what someone needs and increasingly can help them get the care that they are looking for, especially because we have this significant physical and digital healthcare network through our Shoppers Drug Mart environment.
Very few organizations have all the pieces together to do something like this, the tech, clinical expertise, the trust that Canadians have with Shoppers Drug Mart to manage their health, and of course, the healthcare network to fulfill that care on the other side. Let me show you a video.
[Presentation]
I'm looking at Mary. Thank you. I'm looking at Mary because her team has been doing an absolutely outstanding job figuring out the right way to bring this to Canadians. You're going to start to see this show up. If you went through Union Station yesterday, it's everywhere. You can't miss it. We've got some really incredible activations, and even without actually marketing this to the extent that we plan, we've already seen some incredible adoption numbers that we're very excited about. That's a little bit about the customer side. I want to talk about the other side of the AI opportunity, which is our colleagues and the way that Loblaw operates. We have a very simple philosophy for getting work done with AI at Loblaw.
We build where our proprietary data or processes or scale can create something uniquely valuable, and we partner, or as we say, we buy, where the markets have already built something pretty exceptional, or there's already a clear leader in that space. On the build side, we have spent the last several years developing AI applications around very high-value problems. At Loblaw, of course, we have so many of those. These ones are very unique to a retailer of our scale. We built a maintenance cost management tool for our stores to identify end of life, anticipate, find the best cost, the best solution, the best provider of that solution. CAD 3 million cost out on that application. I think we built it in four weeks with the real estate team. Vendor invoice optimization for finance.
This is through our EDI system, identifying errors in the process, flagging them, anticipating them, resolving them with AI, CAD 11 million cost out. An ingredient cost database. We built that with procurement in a couple of weeks for them to have a system of record that includes every single ingredient that exists within our product assortment, be able to track the markets and the cost of that ingredient, anticipate supplier increases, push back on unjustified ones, be able to anticipate that, CAD 15 million cost out. These are a bunch of different AI applications. We've got many of these across our organization, live, working, automating workflows, increasing team productivity, improving business outcomes, and delivering bankable savings. Then there are areas where it would make absolutely no sense for us to build. We want our colleagues using the best technology that exists on the market, so we partner, right?
We've got OpenAI as a partner for some general colleague productivity, content generation, Adobe for our marketing teams, dozens more of niche AI applications. My favorite example, my team is largely made up of engineers. We use a tool called Cursor. This is a coding copilot. Think of this as autocomplete in Microsoft Word, but for engineers who are writing code all day. We built a harness around this to give it context and access and permission. Because of that system, we're seeing upwards of a 10x productivity gains from our engineering team. Interestingly, if you look at my capital envelope for our digital business, it's been shrinking. We've shrunk it year after year while still growing our business, while still building more.
My favorite part is that same team that's driving that incredible leap in productivity is the same team that's building the AI products for the rest of the organization. This flywheel is pretty remarkable. AI is being embedded into how thousands of people, thousands of our employees are working and driving meaningful gains in many different ways. That's great. We've got AI applications automating individual tasks across the organization. We're going to continue to expand that, find more tasks, more teams. It's wonderful. They come to us, we come to them. But the reality is our ambition is much greater than a collection of AI apps, right? I often say AI apps are optimization. What we're looking for is transformation. This technology has the ability to transform.
The bigger opportunity is in fact to redesign how entire functions operate in our organization, connecting individual tasks into intelligent end-to-end workflows, right? Where AI can increasingly do the work alongside colleagues and maybe even on their behalf. That's what we call vertical operating systems. A vertical being merchandising, marketing, procurement, supply chain. A simple analogy that I like to use is a power tool versus an assembly line, right? A power tool or an AI point solution in this case, it gives one person a better tool for one job. Maybe with AI, it's many people, a better tool, but for one job. A vertical operating system powered by AI connects all of that work together. The information, the decisions, the workflows, the actions. The whole operation can run differently. In the case of AI vertical operating systems, autonomously. That's where we're headed.
I'm going to give you three examples of vertical operating systems that are live today. In some cases, they're in motion. These are constant, living, breathing products that we're developing alongside our business. Actually, in many cases, they're being led by the business, augmented by the engineers across David's team, my team, building some of the best AI technology, really, I think in the market. Every day, thousands of decisions are made to keep products flowing through our network and onto our store shelves. You see it here. You see how complicated it is. Transport AI is our AI operating system for that work. Today we actually focus, when it comes to AI and supply chain, on two specific areas, replenishment and transportation. In replenishment, historically, if a vendor can't fulfill an order, an analyst, a replenishment analyst, has to identify that.
They look at a lot of data, inboxes, reports. They identify a shortage. Then they have to figure out what caused that shortage. Then they have to identify the downstream impact. They have got to contact the vendor. They have got to determine what to do next, and that has got to set a whole bunch of things in motion. AI can do that work proactively. AI can identify that a product is not going to arrive through a number of different signals. It can recognize that a promo was associated with that product that is now going to be shortened. That promo might be planned weeks later, but it knows that. It is going to flag the issue early enough so that the team can actually source a new product or maybe even change that promo.
If orders are at risk of a delay, it can actually contact the vendor and begin resolving the issue itself. That is actually the first AI application that we built, communicating with vendors through generative AI, reading inboxes, identifying sentiment, responding to that email, and moving goods much faster. Instead of teams finding problems and then chasing them down, AI finds them much, much sooner and increasingly takes care of that problem itself. To date, we have actually automated 70% of a replenishment analyst's manual work. Actually, 70% of their entire workload. We have also driven a 13 basis point improvement in on-shelf availability because of that anticipation. That is massive gains. I know Rob is going to talk about it, and he is very excited about it. In transportation, very similar patterns here. Anticipate and act. That is what AI is incredible at doing.
Imagine a truck making a delivery up north that would have otherwise come back empty. Today, we can only use that return trip to pick up orders or pick up product from a vendor if there is a PO created, if we have already forecasted that demand, and a purchase order exists. AI actually connects those signals, it anticipates the near-term demand, and it will pull the order forward. It is going to create that PO. It is going to pull that order forward. So that truck is no longer coming back empty. That truck is coming back full, and that one use case, that is an eight-figure cost-saving opportunity. Rob thinks it is more. We are going with eight figures for now, but we are already seeing it. It is working. This is live. This is in production. The teams are using this. They build this together. So incredible potential and way more to come.
That is Transport AI. Next is Merchant AI, and this tackles the thousands of interconnected decisions that merchants make every single day, hundreds of merchants make, to drive sales and profitability. What products do I carry? What do I charge for them? Which ones do I promote? How much space do I give them? How do I work with vendors? We already have powerful AI applications that are improving pieces of this work. We have got something called our Flyer Intelligence AI tool, which assesses our promotional position against competitors and years of our own history and does that in seconds. That used to take teams weeks, and in fact, they probably were only scraping the surface. We have got an AI space planning tool. Mel's team uses this really, really effectively, particularly because they are opening up so many new stores.
They're assessing based on a number of different inputs and the demographics in that neighborhood of this new store, how much space should I give to which categories? But the bigger opportunity, like I said, is connecting all of those applications together. Not having someone jump from one app to another. We know that's not productivity. Imagine a dairy merchant is short on their sales plan on milk. Today, they call a bunch of meetings. They build a new plan to close that gap. That means they've got to pull information from a bunch of different systems. They've got to work through pricing and promotion and assortment and vendor funding. They've got to model the economics, and they've got to coordinate all of that execution. Merchant AI, a merchant can simply ask, "I'm CAD 10 million short, build me a plan.
I need to close this gap, help me." AI can actually identify available vendor funding in that category. It can determine which products fall within that vendor and that category. It can check for conflicts with existing promotions. It can model economics, and it can bring back a recommended plan in seconds. That's what AI can do. We all do that today. We don't realize that it's going off and doing 10 different things before it comes back with an answer. But that's effectively the same technology that we're going to give to our merchants. The merchant can challenge that plan, the merchant can change the assumptions, or they can simply approve it. The Merch OS can then execute that plan back into the systems that run the business, the same system that brought that information in in the first place.
What used to be a complex multi-system workflow becomes a conversation, okay? That gives every merchant dramatically more leverage and enables faster, better communication, better commercial decisions, better relationships with our vendors. Lastly, Robin. I know Per mentioned this. Robin is our operating system for store. We named it Robin because our stores' managers are superheroes. They're Batman. Robin is, of course, their trusted sidekick. I think of a store manager, you go into a store, and you spend time with the managers, they are inundated with an unreal amount of information. Every day, there are reports to review and systems to check and performance metrics to understand. There's memos coming from all sides of the organization, and of course, they've got to walk the store and see it for themselves what's happening in my aisles and with my customers and with my team.
Robin sits across all of that. Robin sifts through that information continuously, and it distills it into a simple, prioritized view of what that manager needs to know about their store on that day. It might flag things like, Per mentioned shrink is unusually high. Here's why. Have a look. Maybe it's going to identify a product that's selling at negative margin, and it's going to tell you if here's the issue, or maybe a product isn't moving at all, but it should be, and so it's going to tell you check the back room. It's going to flag all the things that are specific to your store that seem off that you should have a look at and tell you how to resolve them as well. Or managers can ask. They can just say, "Why are my produce sales down today?
Am I staffed properly for this weekend? Hey, this fixture broke. Take a picture of it, upload it. Who am I supposed to call to get that resolved? Probably their favorite, store manager's favorite feature is the Store Walk. Store managers, you go on a store walk with a store manager, you are going to learn, it is a retail master class. These folks can put Robin in their hand, walk the store as they normally do, and take photos or take notes of things that they think could be better, or they think have opportunity to improve. Maybe there is some spoiled produce that needs to be moved. Maybe there is a broken fixture. Maybe they see an opportunity or a hole. They are going to assign those tasks, those images, those notes. They are going to be able to track those.
They are going to be able to send them back to the appropriate person without knowing who the appropriate person is. They are automatically going to get assigned to the right person at head office or in their store. Increasingly, Robin is being proactive. It is becoming agentic. A lot of the information that we tell store managers, a lot of the insights, maybe they do not need to know at all. Maybe that is actually not something that a store manager needs to do. If we recognize that an item is selling a negative margin, AI can probably go identify why and fix that problem upstream. That should not be an insight that is shown to a manager and have them figure out how to fix that, right? The goal here is simple.
Managers spend dramatically less time finding and managing problems, and actually more time running their store, working with their teams, and spending time with their customers. What you have seen today, for me, for now, is AI moving from technology to real business impact at Loblaw. We invested early, right? We built the technology and the talent to operate at scale, and now we are applying AI across the full breadth of what we do. Right? Changing how customers engage with us, how our colleagues work, and increasingly how entire parts of Loblaw operate. Thrilled to get to share that with you. Hopefully, that was interesting. With that, I will hand it over to Gregers to talk Shoppers Drug Mart.
Thanks, Lauren. I am Gregers. I joined as president of Shoppers Drug Mart back in January. Just building on Lauren's, I think I have been to so many conferences and retail events. Everybody is talking about AI. The big difference that I have experienced is all of this, it is happening. It is happening every day in the company, and it is part of why retail was always exciting, but it is just doubly exciting now. The future of Shoppers Drug Mart, my main message for you today, is full of opportunity in the conventional retail part of it, but also in the beyond and parts of what you have heard Lauren talk about. I will present a bit about the future of Shoppers Drug Mart, and then I will ask my great colleague, Tania, to join, because we know there is a fair bit of interest in the topic of GLP-1s. She will cover that as well.
A little bit about myself. It is a very easy narrative. In my 20s, it was all about learning to lead. I started out as an officer in the Royal Life Guards. This is not me with the pained expression. It is actually my son crossing the same river that I crossed, and my father crossed that before me. Went on to study political science, dreaming of becoming a diplomat and making the world a better place. What ended up happening is that it was very clear to me that my path to make the world a better place would be in the private sector with the dynamism and the scale at which the private sector can move. Spent a few years consulting, doing what Per just said, dreaming of doing only strategy. Fortunately, I got into the real world in my 30s, and stepped into the wild world of media.
You can probably remember the early 2000s, newspapers were this thick and full classifieds, which was basically like printing money, and everybody was watching Flow TV. When I exited at the end of my 30s, of course, it was a completely different business. So spent 10 years doing what we now call transformation. Every aspect of the business changed, the business model, how we were organized, the technology, every single thing. What I learned is that as a strong incumbent, if you embrace technology, if you do it really fast, you can not only get ahead of your conventional competitors, you can actually also match the disruptors, the tech giants of the world. Then finally, I found my calling in my 40s, stepping into retail for a co-op company, much like Loblaw's, though not at the level of sophistication.
Came in actually doing Lauren's job with not quite the sophistication that Lauren has, and ended up running the conventional part of the business. Then I came to Matas Group in 2017, a health and beauty retailer, much like Shoppers, not with the pharmacy piece, and did a transformation, taking our digital business from 3% to 30% of the business, taking the company from Denmark into the rest of the Nordics. Then this opportunity of joining Loblaw, of joining Shoppers came up, and you all know the core numbers. It is a spectacular business. It is part of the fabric of Canadian society. Here are some of the stats. You will know many of them, but 1,400 pharmacies across Canada, another 400 in our Loblaw stores as well that we run.
I think the most important stat on this one is actually that we have a Shoppers within 10K of nine out of 10 Canadians. So we are very close to the customer, and that doesn't just matter in the physical world, it matters increasingly in the digital world as well. But an CAD 18 billion company, it is quite easy. It is split evenly between the front store and the pharmacy business. Clearly, the number one retailer in pharmacy and drug, and that is quite important because what happens when we open new stores, we over time become the preferred drug store, the preferred pharmacy of those communities. So a really strong starting point. Of course, I went through the brochure and the annual reports and read all about it.
I have spent the time since I came in, those wonderful first 100 days of just crisscrossing Canada, visiting every province, talking to colleagues and consumers and patients, and understanding what the business really is. It is quite awesome. I think the main takeaway for me is the level of connection Canadians feel with Shoppers Drug Mart, with Pharmaprix. There is an enormous level of trust in the business, and there is an enormous level of passion around Shoppers Drug Mart, around Pharmaprix, and above and beyond all the hard assets, that is probably the most important starting point and why I think we have an enormous license to seize growth opportunities out there. It is a relationship business. It is about forming a relationship with the customer, with the patient very early on and following the customer and the patient through life as her needs change.
The mechanism for that, the vehicle for that is PC Optimum. Per Bank said it is probably the world's greatest loyalty program. It is much more than loyalty. It is an insight into how consumers think, how they act, what phases they go through in life, and it is an ability to be ahead of the customer, ahead of the consumer at all times, and target everything we do to the individual customer and patient. So just a few spectacular numbers. PC Optimum members, they visit 5x as much as non-PC Optimum members. We cross-sell more, so 60% are more likely to add beauty, which we really like, and basket sizes are also bigger with PC Optimum members. So having that vehicle, that powerhouse that is PC Optimum is really the core of everything we do, and we do not really think of ourselves as a retailer.
We think of ourselves as someone having a lifelong relationship to the customer, executed through the loyalty program. Opportunity. I think there are three pillars of opportunity for Shoppers. There is opportunity in category, there is opportunity in our channels, and there is opportunity in customer segments. So for categories, we are fortunate to play in the beauty market, which is really interesting. I will get back to that. That has been a market that has consistently outgrown GDP, and we expect that to continue to happen. Then pharmacy, which is just growing structurally, and you will not be impressed by seeing a number that says 1.8% growth. That is the conventional pharmacy growth expected for next year. You need to layer in on top of that the specialty growth that Tania is going to talk about in a moment.
But two categories that have structural tailwinds, and where we are perfectly positioned to play a role. As for channels, there is headroom for more stores, and I can tell you, having been out to store openings, communities cheer when a Shoppers or a Pharmaprix opens. It is a big day in the community when a Shoppers opens its doors. There is a lot of headroom to build more stores. It is a very good case when we look at the investment, the IRR, and we see that our new store portfolio actually performs ahead of our expectations. So customers are really voting with their feet and voting for our stores. Per Bank said it, that Shoppers has not had the need to embrace the digital world as much because frankly, the stores were doing so well. I think we have a huge opportunity in online.
We know that this false myth, the myth that when you go online, you pretty much train the customer to move away from your stores and go online. We know now across retail that that is not true, that the stronger you become online, the stronger your stores become as well. We see a huge opportunity for growth in the online channel. Then finally, for customers and patients, we are very well positioned for the aging population. Richard just shared with me this morning a stat that by 2029, there will be more seniors than children in Canada. Of course, seniors have more need for the likes of Shoppers Drug Mart. We are positioned for long-term growth, and we believe Shoppers Drug Mart is a long-term sustainable growth case.
Four areas where we are investing, four areas where we see opportunity, four areas where we will be making a difference for customers. I will speak to each of these, adapting the store network, doubling down on digital, renewing the front store, and leading pharmacy and health responsibly will be covered by Tania. This is the new box that we have designed, sort of a fresh take on what a Shoppers Drug Mart look like. Those of you who have grown up with Shoppers Drug Mart, you will recognize this. It is not a foreign object that landed in Canada. It is very familiar, but still updated to be a modern store experience. We have runway to build a lot of stores. We think the right pace is building around 35 stores every year.
That is the kind of sites we can secure and still be picky about where we want to show up and get those prime locations because we are going to be around for a very long time. Again, once we open stores, we enter a market. Over time, we do become the preferred pharmacy, the preferred drugstore in that market, returning nicely on our capital. We are already pretty much everywhere in Canada. On dollars, we are the number one pharmacy in market share and in beauty as well.
We are already that number one position, and rather than invent something completely different for such a wonderful legacy asset, this is all about building on the strength we already have and really putting a lot of fuel to the core engine that is Shoppers Drug Mart and layering on a lot of the beyond that Lauren talks about and will be talking about. The front store. The front store is where we see the greatest potential for renewal, for bringing newness to the market. I am going to spend just a moment talking about beauty, because beauty for an investor is an amazing category. It is a big category. It would usually outgrow GDP. It is not particularly cyclical, so there would be a little bit of trading down in bad times and a lot of trading up in good times.
It's a category that when you have a downturn, it's one of the last categories to start dropping. It won't drop that much. When the good times come back, it exits really fast. Beauty is an interesting category to play in, and it's also from a margin perspective interesting because it's driven by newness, innovation, bringing new brands, new products to market. Every time something commoditizes, something new gets invented, and this happens in a deep collaboration across the value chain. In Canada, of course, with the demise of the Bay, a new space has opened up, and a lot of the big brands are looking for new points of distribution, for new retail partners who can take their brands and make them come alive.
What we've seen for beauty, in particular, is that this combination of discovering product online, but also going to the stores to test and smell and feel and get advice, and the human part of this is absolutely critical. The number of conversations that go on in our stores every day is quite spectacular. We believe that for Shoppers, there is an opportunity to build on this already strong position that we have and seize more ground, win market share within a very attractive beauty segment. You will see this come to life over the next year in existing stores, but also in the new builds. At the very other end of the front store, we have our food business, our convenience food business.
This is one area where we've had a little bit of a challenge where we haven't seen the kind of growth that we had hoped for. Canadians really appreciate using Shoppers as this convenience destination. But we had become maybe a little bit too streamlined, a little bit the same all across. As Per alluded to, we have been running programs to test out localizing assortment, bringing in more multicultural, working with prices to be more competitive, especially working with member prices and giving our PC Optimum members more value for money, and we're seeing a very nice return on those initiatives and are rolling out quite rapidly to our broader state.
There is this great sort of spectrum of going to a Shoppers, of having this exploration, engagement in the beauty part, walking through the store, ending up with a real value experience in the convenience part of the store. We also know that people go to Shoppers, and they usually have one product in mind. They're just out the door, go down, pick it up, run back. The opportunity for us to offer a little bit of treasure hunt, a little bit of finding a treat, something you haven't planned, is quite significant. We're now testing in a few markets this exit maze that you will have seen in other types of retail. We're seeing that when we get the assortment right, that is a very inspirational walk. I know Galen calls this a forced flow.
I call it a magic carpet ride, a guided tour of inspiration. This is increasing basket size. It is also helping us reduce shrink. The stores are the big component of our business. Online is going to be the big growth driver. We see that as we grow online, it is going to help our front store comps as well. We think there is quite a lot of headroom for Shoppers to get a fair share of the online market for beauty, for wellness. There is actually a fairly strong penetration in those categories when it comes to how the consumer shops. Shoppers is still very much a physical retailer.
We think on the strength of PC Optimum, on the strength of the store, on the strength of our brands, and the trust that we place in brands, if we partner with Lauren and all the stuff she is building, with David and the stuff that he has been building on the tech side, we have everything in the enterprise that is needed to supercharge our online growth. When we do that, we see incremental spend. We see that when people come to our stores to pick up and do this buy online, pick up in store, they actually buy something. They get inspired by this impulse opportunity. Right now, the only game in town for online is about speed. In the old days, people were okay with waiting one day, two days, three days to get their goods. That is no longer the case. Now it is about speed.
Of course, having 1,400 little PCs, not as fancy as this one, but little stores around the country and being able to fulfill from those stores is going to be a huge advantage for us as we dig deeper into the digital world. Then pharmacy and health. Our role as Shoppers is to take on the role as market leaders, to always be at the forefront of what is happening in health and pharmacy. But you do not run that kind of business as a retail business. It is about getting everything right every time and being very, very exact. This is about doing things right, but it is also an opportunity for us to play a broader role within the Canadian healthcare and pharmacy landscape.
If you follow me on this journey, we have an aging population with more needs, meaning an increasing prevalence of chronic disease. We have constraints on patient access. We have 6 million Canadians who are not connected to, attached to primary care. We have a government that frankly needs more players in the market to solve health care needs of Canadians. We are seeing an increased scope of what pharmacists can do in terms of services. We now have the option of not only connecting with the patient in stores once in a while when they fill or refill their prescription, but actually have an ongoing conversation and engagement, including what Lauren just showed us on PC Chat, to have an ongoing conversation with the entire body of our membership base, with all our patients, with all our customers on an ongoing basis in the digital world.
You can imagine everything from drug adherence. When you look at the numbers, it is quite remarkable how few people get a prescription, they do not fill it, or they get a prescription, and they forget to refill it. We can actually add in those little reminders. We can do it for you, but we can also do it for your parents. You know that if your dad drops off a drug, you actually get a notification, you can remind him to go pick it up. Quite spectacular. We can do it at scale, thanks to some of the things that Lauren just talked about. Also on the op side, there is an immense opportunity to rethink how we operate pharmacies. As part of my introduction, I spent a full day doing pharmacy assistant training.
I know you are used to digesting a lot of data and looking at If you want a really stressful day, come to a store, spend three hours as a pharmacy assistant. This is real work. The amount of information, the kind of questions you get, the service you are expected to deliver, but also seeing through the eyes of what you can do with technology, an immense opportunity to take away administrative tasks, data entry, and turn screen time into face time. A lot of opportunity to free up time. All of this compounded by the fact that the rate of drug innovation is increasing, so higher patient demands, more solutions, and a Shoppers that is, I would say, perfectly positioned to capture that opportunity and make a difference in the world. Just one example here of what we are doing.
Instead of pharmacists filling the scripts in the stores, we have built seven facilities to do central fill, and 60% of all eligible prescriptions are actually filled centrally, freeing up time for the pharmacist to engage with patients. This allows us not only to have those conversations across the counter that really matter to patients and consumers, it also unlocks capacity to provide services within the expanded scope and offer services to the patients. That is our cue, Tanya. To introduce Tanya. Tanya is my great colleague. She runs our healthcare businesses. Tanya's mother was with Shoppers as a beauty manager for 43 years. Tanya has been with the head office for 23 years, and before that, 10 years in the physical store. Whereas I am brand new, this is real experience. I will hand it to you, Tanya.
Thank you. Thanks, Gregers, and good morning, everyone. I am very excited to be here today to have the opportunity to go a little bit deeper on specialty medications and what that means. As Gregers mentioned, I spent the first 10 years behind the counter dispensing in a pharmacy, starting in my teens, and have been at the office for 23 years in various roles. But really where my passion lies is pharmacy and health. To have the opportunity to talk a little bit more about specialty today, I hope that everybody leaves with a better understanding of why this is such an important area for us. Just to sort of ground ourselves in the definition of what specialty is versus our core business. Gregers spoke about our core business, which is blood pressure, cholesterol, antibiotics.
That is still a very important part of our business, but specialty medicines or specialty molecules are more complex in nature. They treat more complex disease states. Think about oncology, rheumatology, multiple sclerosis, rare diseases. They are generally prescribed by specialists, so a dermatologist or a specialist, not a general practitioner or a family physician. They are high-cost therapies, so anywhere between a minimum of CAD 10,000 per patient per year, upwards to CAD 500,000-plus a year per a single patient. That is kind of the main differences between a specialty medication and what we would call our traditional business. Then of course, there is the category of GLP-1s that I will speak about as well, which is a subset of specialty drugs. Why is this so important to us? You would have heard Per and Richard talk about specialty at a high level in some of our calls.
This is where R&D, research and development, and innovation is happening with pharmaceutical companies, not only with Canada, but globally. Our team spends a good amount of time making sure that we are well connected to the pipeline of new products and therapies that pharmaceutical companies are launching that they will be bringing to Canada. We travel globally. We visit manufacturing sites. We make sure that pharmaceutical companies know that we are a partner of choice for them, and we can support those patient needs. If you look at the growth for each of the categories, specialty is the fastest-growing segment. It is growing at 13% versus traditional drugs growing at about 2%. Then you have GLP-1s within that at 17%. Within our Shoppers Drug Mart business today, specialty medications represent about 37% of our pharmacy business.
It is already a meaningful part of our business, and that is very intentional. We have been focused on the specialty category of drugs for about a decade now, investing in capabilities and assets to be able to capture this growth opportunity. Then you will see our market share within those categories. Although we under-index today versus our traditional share on the specialty category, we have made the investments, and we are well-positioned to take advantage of that growth. On the flip side, on the GLP-1 space, we over-index. So 28% of scripts filled in Canada for GLP-1s are filled within a Shoppers Drug Mart pharmacy. Just to give you a bit more flavor on the difference between traditional medicines and specialty, and what that means for a patient or for anybody in the room who knows somebody or who has been through this process on their own.
If I walk into a doctor's office and I have high blood pressure, I see my family doctor, he or she writes me a prescription. I actually leave the doctor's office with that piece of paper, and I walk into a pharmacy and fill that prescription, take it home, and that is sort of the standard process. For specialty, more complex drugs, the patient experience is very different. Gregers sort of alluded to it, but it is even more pronounced with specialists. Some patients wait anywhere from six months to 18 months, even longer, to see a specialist, to be able to get an appointment. Once they see that specialist, they will be diagnosed, and they will be prescribed a medication. As I mentioned earlier, these medications are CAD 10,000-plus per year.
Not many people are paying out of pocket for this, the journey for reimbursement, or what we call coverage, who is going to pay for the therapy, takes quite a bit longer. It can take anywhere from 30 days up to 90 days for the insurance companies or the provincial plans to pay for that product. It is also not something that you just hand to a patient and say, "Take one pill a day." There is additional training and clinical support required. We have nurses within our business who actually interact with those patients and support them clinically through their journey. Then there is training that can be done at store level. When they go into a pharmacy to pick it up, we have pharmacist centers of excellence who are actually well-positioned to support these patients through that process.
We have a business unit within Shoppers Drug Mart called Specialty Health Network, and that is their core focus. There are over 700 colleagues within this business who support these patients through that unique journey that I just spoke about. We are very uniquely positioned versus other retail pharmacies to be able to capture this fast-growing market. Of course, we have our 1,800 Shoppers and Loblaw pharmacies, physical locations across the country, which we have spoken about. We have 5,000 pharmacists who come to our conferences and events and training throughout the year who are specifically trained in supporting specialty patients. We actually have 3 million specialty prescriptions that we fill in our network every year, and we have got over 200% growth in the number of specialty patients that we have seen in the last three years.
Why we are uniquely positioned versus other retail pharmacies, because this is not an inexpensive business to run. The cost to entry or the cost to support and get access to these patients is very high. But we have made that investment over time, and we also have the assets that some of the other pharmacies would not have. The traditional specialty pharmacies that you can sort of see on the right, that is what they do. These are closed-door pharmacies that have the same 700 colleagues that I talked about, and they are shipping prescriptions to patients' homes. We have those 1,800 locations. We are sending daily prescription deliveries to those pharmacies. Our cost to serve is next to nothing. We put another injection or another specialty drug in the same delivery that is going to a store, so our cost to serve is very different.
Specialty players to deliver a cold chain product that needs to be temperature controlled and monitored and received by a patient at their home. Those are upwards of CAD 100 to have a specialty courier take those to their home. It is also really important to note that specialty patients are like all of us in the room. 20 years ago, specialty medications were infused. You would go to a clinic, you would sit there for three hours, you would have a product infused. So they were much more complex therapies. The advancement of science and the products that pharma companies have brought to the market, is changing the mode in which those medications are delivered. There are oral therapies now, there are self-injecting therapies that are very retail friendly, that can be delivered through a retail pharmacy.
As we've transitioned programs that pharmaceutical companies have asked us to support on their behalf from some of our competitors into the Shoppers business, 76% of patients who previously had those prescriptions delivered to their homes are picking it up in a Shoppers Drug Mart pharmacy. This is not an Amazon package. This is not a bottle of shampoo or a tube of toothpaste that can be left at the front door. These are pharmaceutical drugs that are CAD 20,000, CAD 30,000. You need to be home to sign for it. This is people who are working population, who don't want to be sitting at home for five hours once a month to receive a package. We are very uniquely positioned with the pharmacists that we have, with the expertise, the retail locations that we have, and our unmet cost to serve.
What are the categories that we're seeing the most growth in? The obesity and diabetes highlighted in red there is the GLP-1 category. Obviously, those are two of the fastest-growing disease states or indications that we're seeing growth, but that is not our only focus. If you look at oncology and dermatology, our Shoppers business, Specialty Health Network, is growing at 2% to 3% faster than the market. Those are areas that we've invested resources in, we've invested in the right capabilities to capture on all of the other specialty categories that are also growing very quickly. When we think about GLP-1 specifically, the growth in this category is phenomenal. As many of you know, everybody hears about it in the news and the media on a regular basis.
Here are some of the calls that we've put together from the various analysts on what this growth in this category could look like. While there is a range there, it sort of all comes within a similar range. They have various assumptions that drive the differences in their numbers. Some of the key factors or drivers that will influence the growth are a few things. One is coverage. Who's going to pay for these therapies? As all of these new medicines come to market, both private and public payers need to find the funds to reimburse these therapies. Coverage is a huge variable in these growth assumptions. Adherence. Gregers spoke about it. Patients starting therapy is one thing, but staying on the therapy indefinitely is another. Some factors are either side effects or cost and affordability.
That's another big factor in the growth in this category. There's a lot of new therapies coming to market, new entrants that are coming to market, and new methods. Again, there's some big oral products coming to market. There's a lot of patients who don't like to inject, and those oral therapies will open up another category or cohort of patients to start. Then the affordability, of course, that I spoke about. As the genericization happens, as an example, we've seen a lot of new patients start on therapy because the cost of the therapy is much more accessible for some. Just to give you a bit of a sense of the difference of who's paying for these medications across the three key categories that we talked about.
The traditional medicines, our core business, the blood pressure, the cholesterol medications, very little cash or under 20% of cash, and a good split between government-funded and private insurance. Your employers, your benefits that you have through work. On the GLP-1 category, it is interesting to see that very little funded by government because it is mostly for the diabetes indication, not for the weight loss indication, but a high concentration in cash. Almost 40% of people who fill their GLP-1 are willing to pay out-of-pocket within our network. That is 38%. That is helpful in the sense that it is not subject to government deflation and reform and those things that we have seen in the past.
On the specialty category, I guess it shouldn't be a surprise, but only less than 5% of people are paying out of pocket when the costs are as high as we said they would be. GLP-1s as a category, the growth has been phenomenal. Canada, as a country, ranks about number nine in the world on pharmaceutical consumption. In the GLP-1 space, we are number two next to the U.S. As a country, we over-index in GLP-1s. As I said, our market share is around 28% today. The Canadian market is about CAD 4.1 billion today, and if you kind of land in the middle of some of those assumptions or those calls that I shared, would be around CAD 8 billion by 2030. Our job is not to just wait for patients or Canadians to walk into a pharmacy and hand us their prescription.
I like to call it growing the top of the funnel. What are we doing to meet Canadians where they are needed, and to fill the gap in care that we talked about in terms of accessibility of healthcare providers. We have launched, late last year, a Shoppers Drug Mart weight management program. Think of this as the version of Hims & Hers or Felix Health, but better, because we have a retail offering that goes along with it. It is a fully virtual online program. Anybody in this room can access it at no charge. That is a huge differentiator of our program versus others in the market. You would be connected virtually with a nurse practitioner. We assess, we do the labs, we prescribe where appropriate.
It is not just handing over a prescription, but it is a longitudinal connection and journey with those patients. We have dieticians, we have nurses, they are interacting with our pharmacy teams, and we are connecting them with recommendations around diet and exercise. The end state would be also that we start to give them offerings of other assets that we have within the enterprise, whether that be recipes or grocery, and making those connections across the ecosystem. This program is endorsed by Obesity Canada. They have done a press release with us, so that is incredibly important to us reputationally from a brand perspective. This is backed by clinicians. It was co-developed with our two clinical advisors who are key opinion leaders or key physicians within the diabetes and obesity space. It doesn't stop there.
While GLP-1s today are used for diabetes and weight loss, the science behind GLP-1s, GLP-2s, GLP-3s, the next wave of this treatment therapy is very promising. It is exciting for Canadians, it is exciting for us at Shoppers and Loblaw because it is looking to be able to treat very different disease states. We are talking about pain, we are talking about liver, we are talking about kidney, addiction. The ecosystem that we have built and the capabilities that we have in our stores, both our pharmacy care clinics, our virtual care offerings, and the training and support that we provide our pharmacy teams, has us well set up to support the growth within the GLP-1 category as well.
With that, I am going to turn it back to Gregers to sort of talk about all of the assets we have in the enterprise and how we can support these patients in the best way.
Thanks, Tania. It is an absolute game changer, a big market. We are in a good position. What happens is once patients go on drug, their needs change quite a lot. We are getting smarter and smarter about what happens to food consumption, how the habits change, but also seeing that it is a real lifestyle change. It unlocks opportunities to rethink your fashion, your wardrobe, basically. It unlocks opportunities to rethink your skin regime, all kinds of things. It is quite a pivotal moment in the lives of patients when they go on that drug, and it unlocks quite a few opportunities on the front store. But even with my colleagues, when I hand over to Frank in just a moment, he is already thinking about how can we build our offering in our supermarkets to cater to a new segment of the population.
I think bringing it all together, Shoppers is an incredibly strong business. We are positioned to grow, a CAD 18 billion business delivering CAD 2 billion of EBIT. We are positioned for long-term sustainable growth, both on the front store driven by both innovation in the store, but also online, and also driven by structural tailwinds and all the work that we have done within specialty and connecting with all the digital and tech opportunities in the enterprise. Thank you very much. I will hand it over to my great colleague, Frank Gambioli.
Good morning, everyone. I am super excited to be here. I am Frank Gambioli, I lead the supermarket division. I have been with the organization 41 years. You might not think I look that old, but I started in Fortinos in 1985. It is actually the first grocery store I ever shopped in. It is kind of bittersweet. I have been fortunate to have 18 different roles in the company. You think that is just a tenure of over two years, and hopefully it was not because I was bad at those roles. I actually think I did a pretty good job. I wanted to start with giving you a quick overview. The supermarket division has 550 stores across the country. We serve over 8 million customers a week with 90,000 colleagues.
We have a 20% share of the conventional business, and we have a 25% of the hypermarket business, and that is basically Costco and Walmart. CAD 27 billion in annual sales, continuing to grow EBIT. The cornerstone of our strategy is retail excellence, as Per touched on. Three areas I am going to take you to today is merchandising excellence, differentiated value, and technology and AI, and what we are doing there, which Lauren touched a bit on already. Think about merchandising excellence. The area we are focused on, there are three areas we are focused on. When we think about multicultural, three years ago, multicultural was a single-digit business for us. We have been growing the last three years at double digit. It is going to be a CAD 2 billion business for us in the next two years.
We continue to see this as a growth engine, and the one advantage we have in our stores is we have the space for it to continue to grow here. We think about meal solutions. Meal solutions is another big area. You think about the restaurant business in Canada, last two years there has been over 5,000 closures, and you continue to see that cycle through. We can provide great value in this area, great quality. When you think about this is an CAD 800 million business for us, and we think in the next three years, we can scale this to over CAD 1 billion.
Gregors touched on GLPs, and natural value, even though we have been in this business for over 20 years, it continues to grow, and how we think about this business and how it could contribute to what happens with GLPs, we still think this is a big growth engine. We are still growing, I am going to say between 5% and 10%, and this is a CAD 1 billion business for us. I do not think there is anybody else in North America who does natural value as well as us in our stores. Right-hand side. Those who have been to our store, right-hand side is composed of general merchandise, HABA, and apparel. Think of our general merchandise business, we are seeing tremendous growth. Toys growing over 35%, that area is showing good growth for us. HABA, we put in cosmetic bars with cosmetic managers. We are seeing good growth, single digit.
I think with Danni and the team now, we see that as a big opportunity to grow. Gregers touched on it too. Pharmacies. We have 350 pharmacies in my stores. It is a big opportunity for us. I always use this analogy, some of our Superstores can do 10,500 flu shots in the fall. When you put that and scale that, it is actually a big push for us this year. How can we continue to grow the pharmacy? On the health and beauty on the core, we think we have a little bit of work to do there still, and Danni and the team are working through that with Elaine. Apparel, we launched licensed brands and national brands, very positive growth. I think the other area that Lauren touched on, we feel that there is a huge opportunity here to grow online.
We are just at the infancy stages, and I think with Brian coming on, that is a big opportunity and a big unlock for us to grow. Right-hand side, renovations. We have touched on it. Superstore, we have done 64 renovations. By the end of the year, we will have up to 99 done. We have done 37 value models, value models. Value models in our smaller stores, what we have done is we have taken the best of our right-hand side, and we have put it into our conventional stores or our smaller footprint Superstores. Tremendous. It is actually one of the things that shocked us a little bit because the growth on that has been very good. We continue to launch those, and they are very capital-light. When we think about value, I always say value has many different faces. When you look at price leadership, we launched a campaign in the Kitchener-Cambridge area that Per touched on.
We lowered almost 3,000 prices. In the Atlantic, in just over 60 stores, we lowered 4,000 prices. Initial results are very positive. We knew we needed to improve our price position in those areas. Initial stages working really well. We are leveraging Danni's. She is going to talk about her Stronger Together and how we buy better. We are being able to leverage that. We think about PC Optimum. It is our secret weapon. You heard them talk about that. We are able to give back CAD 500 million in points to our customers, 70% penetration, great return on sales that helps us drive market share. When we think about value beyond price, two and a half years ago when I started in the supermarket division, we knew we needed to get more credit for the value we provide.
You look at the top segment there, we have launched our value campaigns, which have been very positive. We continue to refine that. Bottom there, we think we can differentiate versus our discounts with fresh, discounters with fresh. We have been very successful at that. PC Express, PC Express is pick up in store, continues to be double-digit growth for us, and that is on a pretty mature business and a very big base, and that continues to grow, and we are leaning into that very heavily. That feeds into when we think about technology and AI, when I think about PC Express, our pickup in store, we have leveraged technology, and what is really important here is we have Superstores that are doing almost 20% penetration online. Instead of adding more space, we have added technology in. This technology allows our stores to pick a little faster.
If we were picking at 80 to 90 pieces, 80, 90 grocery items in the store, this tool is allowing us to get up to 200. We have actually set a benchmark of 150. We have been between 180 and 210. It has been very successful. We are launching this out next year across the network. That has been a big unlock for us. We look under cost controls. That is an electronic shelf label there. I am going to say between Mel and I, first in North America to launch our entire chain. You see some banners now in Canada just getting on board. We have been here for a long time. That allows us to reinvest our labor into different areas, be it front end, service. If anybody has ever worked in a store, the worst job in the store is putting up labels.
It has been very encouraging for the stores, too. We have Gatekeeper there. What Gatekeeper does is, obviously, you have heard of the retail theft issue we have. We call them runners. People would just run out of our stores, fill up buggies, and run out. That is a common occurrence every single day in our stores, and it continues. Gatekeeper stops them at the front door. If they have not gone through a till, it will deactivate the front wheels, because now we have four wheels, two wheels, depending on stores, it locks at the front door, and that has really, really helped us recover a lot. Lauren touched on Robin. Robin is a big tool. Just think about two years ago, a store manager or a franchisee used to do everything on a piece of paper. Go find the department managers. They see a hole in the shelf.
That technology, they just take a picture, email it directly to the department manager. Think of the efficiencies that has created. One of my favorites is AI use in our self-checkouts. We launched technologies that can identify produce. Why that is important is, I am not going to say people are stealing, people might be mis-scanning items. We saw just on bananas, organic bananas, sales go up 25%. It also detects that if you have not scanned an item, it will nudge them and say, "Hey, you forgot to scan this item." We have seen good returns here, fully launching in the next 12 months. Very, very promising. Scandit is the unit on the bottom there. It is basically a zebra. Just think of it as a phone.
This technology, what we are able to do is scan. You are going to hear about companies using robots to go up and down aisles. We find this more effective than the robots. Tried both. This will allow us to go scan a store, let us say a Superstore, in 45 minutes. That will bring back real data to the stores. It will create a pick list for the store. Think about in the past, we would have to go to the back room and say, "Hey, you did this and this. Go check." Johnny is running back and forth. Now this will create a picklist within 40 minutes. On top of that, it will tell the category people if that planograms have been completed and are compliant in that store. Technology will be rolling out between our businesses over the next couple of years.
Now, to close, we feel we're very well-positioned versus our competitors. As you can see, we continue to grow sales and EBIT. You think of our hypermarkets, we're very well-positioned in our hypermarkets, versus discount with lots more to offer. In our conventional business, we continue to show growth differentiating with value, assortment, and service and leveraging, leaning into price. The fallacy that we're not opening stores, we'll be adding in this year and next year over 500,000 sq ft into the retail market. We feel we're well-positioned, to continue to grow sales and EBIT. Thank you for the time today. With that, I'm going to pass it over to my colleague, Melanie Singh.
Actually, slight detour, Frank. We're going to give you guys a little bit of a break, freshen up your coffee cup, and then we're going to try and get ourselves back on track by starting at 20 after, or sorry, half past 10:00. Refreshments in the hallway, stretch your legs, and we'll see you back in a bit. Everybody, we'll try and get ourselves back on track here. Next up, we've got Mel Singh from our discount operations. One note, I've seen a few people taking photographs of the screen. We'll have the deck up shortly on our website. It's also going to be filed on SEDAR, so you should have access to it in a couple of minutes. Mel, I wore my socks for you. Let's go.
I need those socks. Good morning. It's nice to meet and see all of you. It's my pleasure to be here. As Roy says, I'm Melanie Singh. I lead the Hard Discount operations here at Loblaw. I've been here for 17 years. I've had various roles in merchandising, operations, procurement. My love affair with the hard discount business started in 1979. I know I'm giving my age away when I tell you this, but that's okay. In 1979, as a new immigrant to Canada, there's a new grocery store called No Frills that opened up at Vic Park and St. Clair. I called my mother last night, and she remembered right away because it was a family outing.
We went as a family to No Frills, and I was amazed as a kid about this grocery store, about how red the apples looked and about how it was great that we could go. As a kid, I'd always ask my parents for all these things, which I never got, but that was okay. I've since gotten over that. Can you imagine what my job is like today when I walk in a No Frills or a Maxi, and I was there as a kid? It's a fascinating thing for me, but it's an incredibly humbling experience because I understand what it means to shop at one of our grocery stores. It's my pleasure to be here with you today. From the hard discount perspective, we'll be 570 stores strong by the end of 2026.
Hard discount is anchored by two amazing brands, No Frills and Maxi. Why that's important and why that's an integral part of the story of hard discount is those two brands are iconic and symbolize value for customers. What we've seen over the past several years are we have two types of customers, value needed, the CAD 50 a week shop that Tara talked about, and value wanted, where they're looking for a different value. We've also seen the divergence. The under 35, hard discount's cool. I've never been called cool in my life, but I'll take it now. Second is, as the population ages and more people go on pensions, we see they're seeking value as well.
We also have the middle that just want to come for value that we offer, and Maxi and No Frills have made it their business to be the value leaders of Canada. I got a question at the break that asked me, "How are you doing this? How are you opening up a store almost a week?" We're really good at what we do, but that's beside the point. What we have done is we found a repeatable process, and when you have strong, iconic brands that resonate with your customers, it becomes a function of just time and how we make the process repeatable. With that, I want to take you on a little journey. I want to tell you a story about how this has evolved. I'm going to start with Trois-Rivières, Quebec.
Someone also asked me at the break, "I don't see Loblaw stores in Quebec." My good friend and my brother from another mother, Frank, and I will look at the network across the country, and we will collectively decide, should we convert a store? Trois-Rivières was a conversion. Trois-Rivières, as a Provigo, was a really good store. Trois-Rivières, a Maxi, does 5x the sales of a Provigo and is profitable year one and resonates with the customer. Equally as important, it doesn't erode the current Maxi store that we have in Trois-Rivières. It warranted a second store in that city. That's the story of Trois-Rivières. If some of you have gone to downtown Toronto and visited our store on Richmond Street, anybody? I think I toured with some of you there. It's freaky, right? There's two front doors.
I get mixed up all the time, and I go there a lot. When that store was presented to me from our real estate team, I was like, "Are you people crazy? This is a U-shaped store. There's two front doors. How are we going to make this work?" I drew it 12 times. We went back, and we looked at it 12 times before we said, "Okay, we think we can make this work." Guess what happened? It was an empty pocket for us. What happened was the store does 3x what we thought it would do, and it continues to grow, and it continues to resonate with the customers in that area. Finally, the story of Victoria, British Columbia. A year and a half ago, we had one store, one store on the island, Vancouver Island.
At the end of this year, we will have five. By the end of 2027, we will have five more because the catchment area, as Per talked about, warrants the discount presence we will give it. What the stores in Vancouver Island are doing are 2x and 3x the size of our projections. We are very pleased with how we rolled it out, but it is not one cookie-cutter experience we are doing across the country. We play to our strengths, and we play to the market. If you know me, you know I love all the people I work with, but I also love all the great jobs they do. Frank talked about AI. Every single piece of AI functionality Frank and Lauren talked about, I employ in my store. I do not care if it is 4,000 square feet to 80,000 square feet, it is in the store.
Robin, the macro space, the merchandising that Lauren talked about, the Scandit that Frank talked about as to doing shop floor walks, we employ all of it. PC Express, so delivery and online digital presence is present in Hard Discount, and we are growing exponentially. Loyalty, it is one of the big unlocks for us. Not only are you shopping discount, but we have created a loyalty program within Hard Discount that delivers value to our customers. What we see, and Per talked about it, our penetration in Canada, the Hard Discount market is 18%. The closest one we see is 22% in the U.K. We have room to grow, as he talked about, but we are going to grow intentionally, and he talked about it. 30 to 35 stores a year is what we are targeting. Why does this make sense? In the last three years, we have opened 200 stores.
You must have a repeatable process if you are going to open up 200 stores, but we are really pleased with what we see. What we see is that portfolio, the sales exceeding plan, we see year two and three comps outpacing our expectations, and we see EBIT positive less than three years. That is a great portfolio, and the work continues. How does the work continue? If I am sitting here as leading Hard Discount, there is opportunity across this country. I told you about Vancouver Island, but how are we thinking about it and taking this up a level? You would have heard earlier this year, we opened Caraquet, New Brunswick. It was the first time we took Maxi out of Quebec. Guess what happened? Resonated with the customer.
We will have four Maxi stores in New Brunswick by the end of the year, and it is resonating with the customers and delivering exactly the results we see Maxi delivering in Quebec. A year ago, precisely to the week, Per said, "Mel, we should go to Poland." When Per put up those six things of his leadership style, you know when he says, "We should go to Poland," you are going to Poland. That is how this works. Off we went to Poland, and I said, "Per, what are we doing in Poland?" It is the highest per capita discount stores in the world. We went because we knew we had underserved markets in Canada. We had population of 4,000, 5,000, 6,000, 7,000, and we needed an offering to deliver the No Frills brand or the Maxi brand to those communities.
What we saw in Poland, we brought back the inspiration, and we created Dutton, Ontario. What is Dutton, Ontario? Dutton, Ontario is a 4,000-square-foot store with 4,000 SKUs that you can do your full shop, operates as a No Frills, and operates at the entire promotional program of a regular No Frills. This is a No Frills that we can take across the country. It has been open since the end of July, but two things I would tell you. We dived deep within ourselves to figure out how to build it cheaper, and we dived deep within ourselves, and we are learning every day on how to operate it more efficiently. Those are the two things of Dutton, Ontario. For me, Dutton, Ontario represents one thing.
The first customer in Dutton, Ontario, the morning we opened, was an elderly gentleman with his son, and he said to me, he goes, "Thank you." I said, "For what?" He said, "I could walk to the grocery store. My son does not have to drive 20 minutes to go take me to a grocery store to do my shopping." He had me in tears, and I bought his groceries, so I mean, he is going to be my customer for life. Dutton, Ontario affords us to go across this country in underserved communities. Finally, Komoka. As Greg has talked about, we reinvented what it means to be a discount store. We have modernized it. I wanted to take you to Komoka, although I could not take you to Komoka today. The look and feel of the store does not make you feel discounted, shopping at discount.
As we roll this banner across the country and Maxi, they will be the same, the only difference is the front is not yellow in Maxi, it is blue. The new logo is there. We will roll this across the country, and as we open new stores, it will take shape as this. The sweet ingredients that we also have is right next door is my other brother from another mother, Gregers, with his new store, the look. Can you imagine the landscape of Komoka, Ontario, where you have the new No Frills, not feeling discounted to shop discount, and you have the Shoppers lending itself to what we can do best together. What we see is when Gregers and I go together, it is a winning proposition for many of our customers. We are delivering growth, we are delivering it in the right way.
We are delivering it, and we see the results from our efforts. We are providing value to our customers. The Maxi brand, the No Frills brand means something to Canadians, and they are assured value. It is that value promise we deliver each and every week. We are doing it through the most efficient way, both building stores, operating stores, and using AI where we possibly can. For me, the future is bright. The growth engine is there. We see the trajectory we have using every asset we as a company have, be it loyalty, be it what Lauren is doing, be it technology, what David is using, be it control brand that April has been talking about, selling T&T products, making sure Mary is giving me the best marketing campaigns I have. I am using every single piece of this company and what it stands for to drive the growth engine that is hard discount.
Thank you for your time. With that, I am going to bring up my good friend, Tina, from T&T.
Very good. Thank you.
No worries. Thank you, Tina.
Thank you so much. The ultimate Asian food destination. Some of you guys have toured my stores before. Some of you guys are stuck in London, U.K., dialing in, and actually, if you have never been before, it is a little bit hard to describe what a T&T is. But I hope that here are some images that help you along. This is what you would see as soon as you walk into the store on the right-hand side. This is our story. T&T stands for Tina and Tiffany. It is a business that my parents started, in 1993, named it after me and my sister, and my mother was the founding CEO. She brought to the store what she needed as a mother of three, and it is so amazing that we started in Richmond, B.C., and so many moms were desperate for what she brought just like in 1993.
There's a sentence in here that actually I want to blow out a little bit. It's this, T&T provides food that helps Asian families connect with their past and build cultural traditions in their lives outside of Asia and through time between generations. In pursuit of this cause, T&T has also become a destination for all Canadians for Asian food discovery. It's not just about selling bananas and bok choy. This is not the store that you need to go to, it's the store that you want to go to. What we do is about culture, it's about community, it's about identity, and it's about belonging. People find a piece of themselves at T&T, and sometimes maybe they find a bit of love. These are real.
This one bottom right, Mississauga, an engagement of a young couple, a couple coming on their wedding day to take their wedding pictures, and this bride right here took a bouquet of kale right off the shelf to make this picture shine bright. So you can see that we mean so much more to our customers. Identity, belonging, pride, and a lot of joy. The numbers follow. This is T&T's performance since 2009. We have been a proud part of the Loblaw family since 2009, and now we have over 41 stores across North America. My mother would never have thought one day we would go all the way to Quebec. You can thank Robert Sawyer for that, and she also never would have thought our recent venture would take us south of the border.
Our first store in the U.S. opened in Bellevue, Washington, and I thought in a 76,000 square foot former Walmart, and you should take a look at this video and hear it from what was the response in our first store in the U.S.
[Presentation]
It's true. Parking is a huge bottleneck for us in the U.S.A. We rock Bellevue, and most recently, we brought our format to San Jose. We opened up a 55,000 sq ft store, also happens to be in a former Walmart. What you can see here is the lineup on our opening weekend. It wasn't just the first hour, guys, it was for the first three weeks. We had this tent up for the first three weeks. I love this headline here, the first one, "Canada's cult favorite supermarket arrives in Hudson's Bay Area, and it's a showstopper." It literally gets the hairs on my arm standing up because cult favorite to describe a T&T. Usually, that's reserved for a Trader Joe's, right? But T&T has earned cult favorite already, even though we've got three stores.
You can see here, "The most hyped Asian supermarket is finally here." A lot of great headlines. In 2025, the Institute of Grocery Distribution, the IGD, did an international scan for stores of the future, and T&T is on that list as number 3. Customers tell the story the best, though. I'm taking you deep into RedNote. RedNote is the number one Asian social media platform out there. I've done a bit of translation for you. You can see here, "While Canada often praises American Costco, it's crazy that it's Chinese Canadians to make the breakthrough. Hopefully, T&T can expand to key Chinese communities across the U.S.A." "I can't face my friends in Seattle until I've been to a T&T. It's practically a social requirement." The guy at the bottom here, he did his research.
I immediately decided to buy Loblaw stocks because the shopping experience was unreal." So why T&T is winning in Canada and in the U.S.? Let's double-click on a few of these. The first is destination real estate. A quarter of our network in Canada is in regional malls. We are one of very few grocers that gravitate towards malls. We have a special sauce about bringing empty boxes, empty department stores back to life. We've seen it, you've seen it in Fairview Mall, and we're doing it in many locations across Canada. We don't actually have to be main on main, so we don't pay main-on-main rent, and people come to us from a very wide trading radius. Grocerants, I think the Financial Post said it the first. T&T is a grocery store plus restaurant. Kitchen and bakery are between 20% and 30% of our store revenue.
Highly popular, difficult to emulate, and it makes T&T a destination go beyond and appeal beyond the Chinese community. Actually, 40% of our customers today are non-Chinese speaking. Private label is also a very special part of our business. We have over 600 SKUs in Canada, 300 of them made it to the U.S. But what is so special about it? Because we learned from the best. No one in the world is better at private labels than Loblaw Brands Limited. That is such a beautiful thing about T&T and Loblaw together because Mary's team taught us the how to. We brought the authenticity, we brought the production, and now this is the number one Asian food brand in Canada. I can tell you, Americans love it. They are trying it, and they are buying it on repeat.
Value for money, social marketing, and amazing assortment round out the top six reasons why T&T is winning. You see some familiar names on this list. This is a list of the leading U.S. retailers' food stores' sales per square foot. No surprise, maybe, number one for sales per square foot is Trader Joe's. Trader Joe's, small stores, pretty high volume, top on sales per square foot, led by Costco. I am a little bit surprised Costco, being a wholesale club, is on this list. What is crazy is that T&T makes this list. We cracked the top 10 for sales per square feet in the U.S. Where on this list? Yeah. Wow, right? Number one, two, three. Third top for sales per square foot in our stores in the U.S. This is a great start, guys.
What we have built starting in Richmond, B.C., the fuel that we have had across the country. Our positioning in that we are agile and yet backed up by the enterprise of Loblaw is going to be a great growth engine for T&T and for Loblaw. Three major pillars. Number one, we are going to continue delivering our winning strategy. Number two, we are going to continue growing our Canadian base. We have got a solid pipeline in Canada. Somebody had already requested that they want an invitation to the opening of Empress Walk. That happens one month from now, October 8, Empress Walk, former Loblaw converted to a T&T. Coming up soon, Markville Mall, Sherway Gardens, Winnipeg Polo Park. We have got four locations converting Hudson's Bay locations with Cadillac Fairview. Even in markets that are too small population-wise for a T&T, Mel has got you. Frank has got you.
We have our products distributed from coast to coast, from Victoria to Halifax. T&T private label products are now available in No Frills stores, in Superstores, in Loblaw stores. That is the magic of all of us coming together. The and beyond is expanding in the U.S. Bellevue, I got it. We are focused now on finding our footing in California. On top of the three that we have already opened, five we have announced on the heels of that. The next one is going to be San Francisco, right in the heart of it. We are going to shake up that city. With each new store, we are learning more, we are gaining more confidence, and really going to be making waves in the U.S.
That is how we fold in into the Loblaw strategy, and I am so grateful for all the support that I have from this team, and I want you to watch for the headlines on T&T coming soon. Thank you so much. Who is next? Lauren, are you back?
I am.
Okay, you are back.
I was originally very excited I got to go after the break, and then they shifted, and now I have to go after you. Not too bad. Hello again. Thank you for welcoming me back. Great conversations during the break. I am going to move into what we call our digital connected ecosystem. This is the core of my portfolio. Like I said, AI underpins really everything that we do, but my portfolio actually consists of these three extraordinary businesses. We have got digital commerce at a very large scale, Canada's largest and most trusted, most beloved loyalty program, you heard quite a bit about it already, and a leading retail media business. Each of these is meaningful in its own right, but what actually makes this portfolio particularly powerful and quite hard to replicate, in fact, is how much stronger each becomes because of the other.
Per and I joke about this portfolio a lot. Sometimes, I think it's just the stuff that was handed to me, and other times it's like, no, there's actually a reason this all fits together. Our retail media business financially supports our e-commerce economics, helping us fundamentally change the profitability of that business. No longer is e-commerce a drag on our earnings. Retail media is helping bolster the financials inside of our e-commerce business to ultimately move to that profitability level. PC Optimum is actually the single best reason that our retail media proposition is so differentiated. The data that is generated from PC Optimum is actually what allows Loblaw Advance, our retail media business, to help CPGs so effectively reach relevant audiences and then actually measure what those customers bought. Digital strengthens loyalty.
A digitally engaged PC Optimum member, so a PC Optimum member who uses the app, actually spends nearly twice as much and stays 3x longer inside of our organization than a member who isn't digitally engaged, but engaged nonetheless. These aren't simply three distinct businesses sitting beside one another. They actually are reinforcing each other economically and strengthening the customer relationship, customer value proposition. I'm going to show you the value, in fact, that we're creating inside of each and why we think there's considerably more ahead. I'm going to start with digital commerce. This is already a significant business for us, CAD 4.5 billion in 2025. We're continuing to grow at roughly 15%. Particularly important here is that we're growing with improving economics. I said we're taking costs out of our headquarters, but we're also, as Frank mentioned, driving incredible profitability in our pick.
We're moving from about picking 90 units per hour to upwards of 200 units per hour. That's allowing us not only to drive our costs down and not have to increase labor as our sales increase, but actually that's improving our immediacy for the customer, for our value proposition for our customer. We can pick more, we can pick faster, we can get it into the hands of the customer. We're also making really targeted decisions to keep this e-commerce growth growing. This isn't growing because the market is growing. This is growing because we are actively pursuing that specific growth. You heard from Gregers, Shoppers Drug Mart is scaling out BOPIS, buy online, pick up in store. We've got this expansive physical footprint that allows us to get orders into customers' hands within 30 minutes.
We want to extend the convenience value proposition that Shoppers Drug Mart is so widely known and loved for into the digital space. We're also rethinking how customers discover products online. If I go into a store and I ask a customer, "Why haven't you tried shopping online?" They always tell me, they used to say, "I don't trust the fresh picking," but we've actually nailed that. Now they say, "Oh, I'm worried I'm going to miss out on something. I discover products as I'm walking the aisles." That's actually true. We have more than 100,000 products on many of our online portals. Great categories are getting buried on the digital shelf, so we've introduced something called virtual banners. These are curated destinations. Think of these as shops within shops. These are categories like toys, baby, even mission shops, something like East Asian food.
We build these as a micro shop. We actually, because we are able to understand what customers would actually care about these shops, we are able to target those customers with those shops. In the East Asian example, we are seeing category growth of more than 20% when we build and put these virtual banners with East Asian called A&P Jukon in front of customers. We are replicating that over and over to bring more of our assortment to the customers who perhaps are missing it or want more of it today. E-commerce growth, it is not simply moving with the market. We are actively creating more reasons to shop digitally with us using a combination of our scale and our stores, of course, and our customer understanding to drive that growth.
A quick double click on PC Express, our online grocery business, because our position in online grocery is particularly strong. It starts with the customer proposition. We have built the most comprehensive grocery convenience offering in Canada. I actually do not think we get enough credit for this, but we do pickup and delivery. We do planned next-day shop all the way to delivery in as little as 30 minutes. We are on all four major third-party marketplaces for grocery and meals. However a customer wants to shop online grocery, when they think, "I need groceries," we have made it so easy, so easy to choose us. That translates into share. I know Per mentioned it. Loblaw has about 32% or so of the Canadian grocery market in brick and mortar. We have got nearly 45% online in that same category. We significantly over-index in digital.
We also see substantial room to grow. This is in e-com penetration. Nationally, we are at about 6.5%. Stores in Western Canada, we see upwards of 20%. Superstore consistently, nationally, is operating around a 10% penetration. That is real evidence that materially higher adoption is achievable, and we are going to go after that by opening up more capacity. I think we are at 99% capacity out west in the stores that are pushing that 18%, 19%, 20%. Importantly, we want customers to shop both. Gregers mentioned it. We know a customer who engages with us in more places is more valuable, right? We see customers who shop in-store and online spend 2.3 times more per year than a customer who shops just in store. Growing PCX is actually about creating a more engaged and definitely a more valuable relationship with customers. Next is PC Optimum.
Gosh, I feel silly even talking about it still. It feels like all my peers have done an incredible job. It really is an important asset in our retail ecosystem, but more so important for customers to get the most value, particularly as budgets get tight and wallets get tight. It is the number one loyalty program in Canada. 18 million active members. More than 65% of our sales connected to a PC Optimum member. 60% in Shoppers, 70% in grocery. Yes, that gives us extraordinary reach, but the real advantage I find is what we learn from it. We have a very rich understanding of what our customers buy, what matters to them, and how to access them and engage them across the business. That allows us to make, yes, our experience increasingly personal and more relevant. That actually creates value on both sides.
Customers get better offers, more relevant offers. They get more value. Our merchandising teams actually use their promotional dollars way more precisely. Today, we generate about a 2.2x return on that promotional investment. Some weeks we see 3-4%. 3-4x, rather, it is just continuing to improve. PCO, much more than a loyalty program. The power of it is not also just scale, it is actually the breadth of the network around it. We have deliberately extended PC Optimum across high-frequency, everyday needs that matter most to Canadians. It starts with our own businesses, of course, grocery, health and beauty, apparel. It extends through to partners into financial services, fuel, meals, optical, digital services. The list goes on. Together, that gives members more than 4,600 locations to earn. An incredible number, the biggest in the country.
That breadth makes PC Optimum more useful, more valuable, and part of more moments in a customer's everyday life. There is an important economic component to it as well. A big benefit for us when members earn points outside of our own business, in many cases, in most cases, in fact, they come back to Loblaw to redeem them. Obviously, our customers see the value. What makes me happy, responsible for this partnership ecosystem, is that partners actually see that value just as clearly. My favorite example, Esso, we launched with them. They had operated their own loyalty program for decades, very much entrenched in Canada in their business. They first introduced PC Optimum as an earn-only on top of their existing program.
Very quickly, they asked to turn on redeem as well, and within a couple of years, they had sunsetted their decades-old own loyalty program in favor of just having PC Optimum. So really impressive. We see that response from many of our other partners as well. The reality is we are not done with this. We have an incredible pipeline. I am super excited. I cannot share too much today, but we have got an incredible pipeline of new partners coming into the PC Optimum network, making an already powerful program even more broader, more valuable. Another big opportunity for us on PCO, the app. Yes, we have 18 million members, but the moment a member starts to engage with us digitally, their relationship changes dramatically. They see more value, they spend more, they stay longer. Economics are significant. We track it.
This is a cohort that we have been really pursuing, this population, for some time. Over the last three years, we have consistently grown that population about 8%. They spend about CAD 720 more per year. 40% lift in basket from these folks because they are more engaged, because they better understand the program. Interestingly though, today, only 20% of those that move from member to digitally engaged member engage with one other digital product. So perhaps engage with PC Financial, PC Express, PC Health. But when they do, when they go from member to digitally engaged to even more digital products, that number, again, of their spend and their stickiness increases.
The answer there for us is, and the opportunity is really simply get more people into the PC Optimum app and make that app the place where customers can discover more and more from Loblaw, because we have so much to offer, and that is exactly what we are doing. This month, we are launching the brand-new PC Optimum app. This is effectively a super app for the Loblaw ecosystem. For the first time, we are bringing our entire digital ecosystem together in one place. I think today we have six apps. Customers can keep all those apps if that is what you would like, but they no longer need to. They no longer have to jump from one to the other, reauthenticate every time they do, start over, build a basket, tell you who I am and where I shop and what I like.
The experience in PC Optimum becomes more actionable. You no longer just see an offer. You see an offer, you click on it, you buy that product, you check out directly there. What makes this particularly exciting for me is that we are building it largely around conversation. I talked a lot earlier about how important conversation will be for customers engaging with our brand. Now, instead of asking customers to navigate Loblaw, they can simply ask us to solve a problem, and we can solve it across the entire ecosystem. Imagine telling chat, "I am going to Florida next week. Help me get ready." It can recommend a bathing suit from Joe Fresh, sun care from Shoppers Drug Mart, travel size snacks for the plane from Loblaws. Three businesses, three carts, but one conversation, and inside of one application.
Very few companies have the breadth of assortment and customer relationship and digital capabilities, and of course, the physical network, to bring an experience like this to life. For us, this is the natural evolution of PC Optimum from a loyalty app into really the digital front door to the entire Loblaw ecosystem. Lastly, Loblaw Advance. This is the and more, as Tina said, the and growth. This is our retail media business. The first thing to understand about Advance is the extraordinary scale of the audience we can reach. I do not think people appreciate this. Of course, the 18 million PC Optimum members, more than 2,800 stores, over 11 million Canadians are visiting our digital properties every single month. Actually, combined, we reach 92% of Canadian shoppers monthly. 92%. But what actually makes the reach incredibly valuable is when and where we can reach them.
Not just reach for reach's sake. Our advertisers want the advertising we offer because it is incredibly close to the shopping decision. While customers are browsing online, while they are walking by in our stores, seeing products side by side, while they are making decisions right there at the shelf. We put relevant messages in front of a customer at the moment it has the greatest chance of influencing what they buy. Then we can also see what happens. We know if what they saw, they bought. So we combine the reach of a major media platform with something media platforms do not have. We can actually say whether a customer who saw this ad bought this item or not, and maybe even what they bought instead. That makes Advance incredibly valuable to brands.
We can help them reach the right customers when it matters most and show them what happens. We have turned that Advance advantage into this incredibly growing suite of products for brands. We help brands reach customers inside our stores. We have screens, we have audio, we have even on receipts they are buying on printed receipts. We reach them while they are shopping on our digital properties, sponsored products, display ads, video ads. We reach them outside of Loblaw, too. We use our customer understanding to help brands reach relevant audiences across platforms like YouTube and Meta and connected TV, and we still can measure that as well. We have even turned our data capabilities into products that brands are buying, are subscribing to. We have a product called Lydia I am going to talk a little bit about.
There are multiple ways for brands to work with us and multiple ways, importantly, for us to grow. We have grown about 24% annually since 2023. Importantly, we expect the business to exceed CAD 100 million in EBIT for the first time this year. No longer an emerging opportunity. This is a scaled, profitable growth business with significant runway still ahead. Three areas for that significant runway. The first is in-store. This is probably the biggest untapped opportunity we have in Advance. We built our retail media largely digital first. If you talk to a lot of the international players, they started in-store. Today, they would tell you in-store is their biggest channel, not because it is where they started, but rather because that is where advertisers want to be.
We believe the same is going to happen in Canada, and because we have only begun to build out in-store Tremendous amount of runway for us. We have a meaningful footprint in our stores today. We have roughly 1,800 screens across our store network, but most actually sit on the periphery of our stores. Customers see them on their way in, they see them on their way out, but as we have come to learn, they have already forgotten what they saw on the screen by the time they get to that product. That is why we are moving those ad units directly into the aisles on end caps, aisle blades, right beside where customers are making their decisions. We plan to grow from roughly 1,800 screens today to 4,700, more than 2.5x our current inventory, and we are introducing new formats. We have incredible formats.
We were in Georgetown last week. We have broadcasting onto the floor. Uncrustables had a great spinning ad. You cannot miss this thing. We have holograms, produce bins wrapped in screens. Pretty incredible stuff. Marketers love this stuff, right, Mary? We are not simply adding more screens, we are dramatically expanding our media inventory, moving closer to the moments of purchase. Second is measurement. This one allows us to participate in media spend even when the advertising does not run with us. We only have so much reach. I know it sounds like a lot, but there is only so much. People spend more time on social media than in our stores, unfortunately. The idea here is simple. A brand runs an ad somewhere else, we securely connect the customer who saw that ad to the actual purchase data on our side, and we tell that brand whether their advertising drove sales.
We provide the measurement, we earn a share of that media spend, and we do not have to own any of the inventory, we do not have to run any of the selling. We started this with connected TV. We did a partnership with Bell, first of its kind in Canada, and actually very few examples globally. An advertiser like Procter & Gamble, who spends, I think, billions in Canada on TV, can actually see for the first time, did their TV ad drive sales when those customers buy. Now we are taking that same capability into a much larger pool of media space, social and digital media. Platforms like Meta, platforms like TikTok. That changes the size of this opportunity for Loblaw Advance meaningfully, right? If Loblaw's measurement is underneath the billions of ad dollars being spent everywhere across Canada, not just inside of our ecosystem, we have a huge opportunity to unlock.
Lastly, Lydia, Loblaw Data, Insights and Analytics. This is a platform I described. It is a platform that is quite large today. We do about CAD 70 million a year in top line from this platform. CPGs subscribe to Lydia to understand and manage their business within Loblaw. Meaningful. The product actually has extraordinary number of reports to understand what is happening in your business, over 100. Unfortunately, what we saw was advertisers were only looking at two or three, and therefore the product itself is only as valuable as those two or three reports. We said, let us take the power of AI and completely transform this product. Let us take all the data that exists inside of our organization, layer AI on top and below it, and allow CPGs to actually converse with their data. That is exactly what we did. We transformed Lydia into an AI-first product.
Just think of it as ChatGPT for your business with Loblaw. By the way, nobody is doing this yet. Some may, but nobody has this today. No retail media business has a product of this caliber. This fundamentally changes not only the opportunity because of who can use it. For example, marketers can ask, "Who is buying my product? What else do they buy?" Supply chain teams can ask, "How is my on-shelf availability? Where am I struggling? What stores? What can I do?" Executives who are running these CPGs can just say, "Where am I losing share?" They do not have to wait days or weeks for answers. Users can build dashboards, investigate issues, drill deep, assign work, you name it. Everything that we can do in Robin, you can do on Lydia. This step change in the utility of Lydia changes the entire economics of this product.
We have got 3,000 customers of Lydia today. We have got probably 8,000 or 9,000 other customers who are not using Lydia yet because they did not know that it can do things like this. This is a really easy product to understand. We go into boardrooms with CPGs, we demo this, they are buying it. This is a truly differentiated product combining data and capabilities of AI in brand new ways, meaningful growth opportunity, probably 30%-40% opportunity for Lydia inside of our organization. That is it. I am really proud of these three exceptional businesses. Each compelling growth story of their own, of course, but combined, a really meaningful and hard to replicate ecosystem of digital e-commerce, retail media, data, loyalty. You name it, we have got it. With that, I will hand it over to April on brands. Thank you very much.
From exceptional digital products to exceptional physical products. Mel made a really bold statement yesterday, actually. She said, "I've got the best job in the organization." I'm sorry, Mel, but I think I've actually trumped you at that one. I'm April Preston, and I've got the absolute privilege of looking after our private label brands at the moment. I want you to picture the scene. It's 2012, Loblaws at Maple Leaf Gardens has just opened, and it's news all around the world, and a food and retail expert comes over from the U.K. to have a look at this store. It was so exceptional. That person walked in through the door and was so blown away by the brands they saw showing up there.
They said to themselves, "If you ever work for another retailer, the only place you can go to, another major grocer, will be Loblaws." Fast-forward to last year, 13 years later, the phone rang. It was a headhunter. I never pick up for headhunters. On this particular occasion, they said, "This is Loblaw." I thought, "Right. That's it. They've asked me to join the team. I'm going over there." In February this year, I landed in Canada, moved countries, moved jobs, and I can say exactly the same as Per said earlier, actually, it's the best decision I've ever made, and I'm absolutely delighted to be here. It's an absolute privilege. My specialist subjects, really, are brand strategy, customer insight, product innovation, and product and packaging excellence. I've worked over 40 years in the industry.
Hate to say that, but work out how old I am. In that time, I've sort of either launched or overseen the launch of over 20,000 products. I've also led the transformations of three really strong heritage brands. Again, I would say the same as Per said, we've got a lot of parallels here, but when I landed here, I really didn't feel this was a sort of turnaround job. This was building on something that was really strong already. Over those 40 years, that experience has taught me a huge amount, and it's primarily the biggest thing I've learned is the power of a unique brand portfolio and the role innovation plays in that. I want to talk to you today about innovation because that's where the growth is going to come from in the next few years.
This experience has taught me other things as well, and my last job was actually with a business called Holland & Barrett, who some of you might know. It's a U.K. retailer. They're a health and wellness specialist. It's given me a deep immersion into the world of health and wellness. What that means is I cover a load of categories, not just food. My early career was primarily food, but this put me in an ideal position to be able to come and support Gregers as well as Frank and Mel to really expand our portfolio of products. Here in the last six months, what's really been cemented in my mind, what I've been learning as I've been going around is that we've got a really rare combination here.
We have got trusted brands, we have got customer reach, we have got technical expertise, and we have got brilliant retail execution, and all of that is what is needed to really capitalize on the growth that is happening in the market at the moment. The first thing that struck me when I started to see the data, and this is what I had seen right back in 2012, manifesting itself on the shelves, but these brands are not small, private label alternatives like many global retailers have. They are some of the most powerful brands in Canada. I mean, President's Choice, number 1. I mean, T&T Supermarket brand, we are number two, second only to T&T, which is we have got both of those within our portfolio. We have got Farmer's Market, we have got no name, we have got Sirage, we have got Life Brand, and we have got a number of others as well.
The key thing about this portfolio of brands is that they cross all the most important consumer dynamics at the moment in terms of quality, in terms of value, in terms of multicultural food, and in terms of everyday essentials. We are really ideally placed. This matters from a commercial perspective because these brands drive penetration, they drive margin accretion, which is really important, customer preference, and customer loyalty. The thing that excites me the most in all my 40 years, what I have started to see that I have never seen before, is there is data coming through to say there is a massive shift with consumers. They are actively choosing private label brands now. Before, it was a bit of a compromise. They are almost as good as the national brands, but they are a bit cheaper, so I will go for it. What has happened is that has switched.
The data and the growth projections on our brands, on private label brands, is huge because they are now being seen as the brand, the place to go for quality and innovation and really understanding consumer needs. That is what is so exciting, and that is what is going to really turbocharge our growth over the next few years. I mentioned innovation. There is a whole new opportunity for growth as we move from private label being from an exceptional substitute to the preferred choice.
Our approach when we are developing these brands always starts with a really simple question, "Why would customers choose to come to us and buy our brands over others?" For me, our brands give them a reason to prefer us, but it is the innovation that is going to keep them coming back, keep them interested, and keep them talking about us, and that is what my team are laser-focused on at the moment. Innovation, I call it a catalyst. It is a catalyst for growth. It is what gets people and it gets them talking, and that lifts the whole category. It lifts national brands, and it lifts our categories in total. How we approach our innovation is the key to unlocking this new era of growth I have talked about, and we are ideally placed to capitalize on that.
Now, I am going to take you into a few product examples because I do not think there is any better way of explaining our innovation approach than talking specifics. Have a look at these because you are going to be eating quite a lot of these for lunch, so you can start planning what you are going to pick as we go through. If you want to be highly competitive in the market, we need to deliver best quality and best value. To do that, what we are always looking for is how do we get volume and scale? One of the ways that we do that, I have got this approach that we call half a step ahead. Actually, the business was already doing it when I got here, but this is how I describe it.
This is about taking something that is very familiar to people, but putting a new twist on it so it feels new and interesting. I have got an example here, this Strawberry Tripleicious. You are having this one for lunch, by the way, so save some room for pudding. This is the fastest new line that we have launched this year, and the reason is because it is half a step ahead. Everybody loves strawberries and cream. It is an absolutely delicious combination. Well, I think you do in Canada, anyway. We certainly do in the U.K., come Wimbledon. This is strawberries and cream in flavor, but the new and interesting part is it is a mashup between a cheesecake and a pie. Nobody has done that before. Nobody has seen that before, and that is what really piqued the interest.
This is where the volume and scale comes in, and that is what allows us to deliver quality and value. You can get this one for lunch as well. This is one of my favorites, actually. This was actually launched in 2024, but I think it is a brilliant example of a really iconic product, and we have got hundreds of these. Iconic products inspire loyalty and they inspire repeat purchase, but they do not happen by accident. They come from true expertise, and Lauren talked about this earlier, and it is the same in my team. You have got to have recipe expertise. You have got to understand processes, ingredients, and execution. It is all really important for creating incredible products.
The competitive edge here for a Loblaw brand is it comes from our people, comes from their experience and their capability, and I have been so lucky in the team that I have inherited when I arrived back in February. We have got product developers, technical experts. We have got insights. We have got sourcing. Danni Peirce is going to talk to you next. We have got brilliant category partners. We have got brilliant retail partners. This is what really helps us create these products that stand up to the test of time. This example, as I said, is delicious. You will be tasting it at lunchtime, but it took true expertise to create this product, and this happens every single day in my team. You are not going to be eating this one for lunch, I promise you but this is about our pet nutrition. There is a bit missing from the slide.
The packaging's dropped off for some reason, but what we're always striving for within our brand portfolio isn't simply to match the national brands, it's to beat them. It's to beat them on what matters most to the customer. You don't need to see the detail on the slide there, but you just need to see the number of green ticks. Every single one of those green ticks is an important thing for our customers that we deliver through this pet nutrition brand. Besides that, you can see our competitors in the national brands and how much better we are than they are. You look at the price there, we're CAD 57 per 100 grams, half the price of Purina, for example.
We don't use this on our marketing, but the number of people that have said to me this food gives their dogs the cleanest poop in the marketplace. Honestly, it's a really important We should use this in marketing, though. But it's a really important thing. They talk about the one hand scoop. This is what our dog food does. That's the lengths that we go to to make sure that our product is delivering against customer expectations and what's important to them. One of the other ways we lead is by taking a powerhouse category approach. Some of you might know this as sort of creating destination categories, but this is really about creating categories that strategically customers choose to come to us for.
You can't do this with every category across retail, so you have to be very specific about the ones that you're going to choose. This is a great example of the chips category that we have built as a powerhouse within our organization. It's a great example of where the work that we've done in our private label brands has lifted the whole category, and we have grown market share both for our own brands and the national brands by taking this approach where we really, really wanted to make sure that we stand out against our customers. Interestingly, the other thing you'll see here, this is a range we launched this summer, Canadian flavors. I call it Canadiana. This is a massive growing area for us at the moment.
Made in Canada, Canadian flavors, all things Canada are very, very important to our customers at the moment and something that we're really focused on. I wanted to have a top secret slide to sort of talk about all the things that are coming through, which I can't do because it is all top secret, bit like Lauren, but there's some really exciting stuff coming in this space over the next year or so. A core role of our brands is democratizing quality. How can we make better products more accessible through scale, through price, and through technical capability? We've got an incredible greenhouse grown program, which is a great example of this, where we use technical innovation to ensure that we've got great tasting, affordable tomatoes available all year round.
This solves a real customer problem because that quality. Does anyone like horrible, hard, not very tasty tomatoes? I know I do not. Or tomatoes, I should say now I am in Canada, sorry. This solves a real customer problem, quality, consistency, freshness, availability, and it really builds trust in our brands. This is what keeps people coming back. This is where our private label brands are so powerful because we can take quality that might otherwise feel premium or seasonal or inaccessible, and we can make it accessible to all of our customers. Health. I mentioned Holland & Barrett. I think one of the reasons I am here is certainly Galen and Per, "Can you help us do what you did at Holland & Barrett?" Frank talked about it as well in terms of natural foods.
This is just one of the biggest areas of growth at the moment. I think to really excel here, what we need to do is deeply understand the market, deeply understand our customers and what is important to them. You need to be very clever at spotting the difference between a trend and a fad. A trend is something that is here to stay. A fad is something that is flash in the pan. I think the really exciting thing here and what we are really building on is how the health market has shifted in the last 10 years. 10 years ago, it was all about Weight Watchers, it was about deprivation, it was about taking stuff out. It was low sugar, it was low fat. The whole world has changed now. Health is a positive thing. It is about putting more in. It is more protein, more functional benefits.
This is the stuff that gets customers excited, that they resonate with, and this is the stuff that we are building. Here is an excellent example of a range of functional drinks that we have launched. I think you might even have them for breakfast, actually. Really helping customers with their gut health. We know the science is really emerging. We follow the science in health and wellness. As I said, we do not follow the fads. Your gut health, this is just a little top tip for everybody here, your gut health is the key to your overall health and wellness. So if you are going to do one thing for your health, look after those little microbiomes inside and make sure you eat plenty variety of plants. I am just going to finish with one final example. No Name For Me, and I have given out a sweatshirt today.
I know somebody who is very pleased to have received one. This is the most important battleground in the market. As we all know, value is not just about price, it is that combination of cost, quality, trust, and that emotional connection. It shows up differently across each of our brands. No Name For Me really stands out. It is a genuine standout because it delivers quality at the price customers believe in, but it has got a tone of voice that is cheeky, distinctive, and emotionally connected. Honestly, you will see some of the stimulus around the room. We have got some incredible products coming through here that people just cannot believe the price they are at. It is not just an opening price point private label range. It is not just kind of the cheapest.
It's a true brand, and that's the message I want to leave you with across our entire portfolio. These brands are powerful and have got so much growth potential. Just in summary, our private label innovation does more than shift share. When we get it right, it grows total categories. Every year, we launch over 500 new products, which create buzz, anticipation, and excitement, and it gives customers more reason to choose Loblaw. We've got another 500 coming this year that I am really, really excited about. We're already strong. We've got trusted brands with meaningful scale, strong market positions, and attractive economics. As customers increasingly choose private label for quality, innovation, and value, not just price, we are so ideally placed.
Our ambition is really, really clear, and I've sort of created this phrase since I arrived because I think it captures what Per talked about. We're going from strong to unstoppable here. That's what we're intending to do with these brands. We're going to be driving trips, we're going to be driving baskets, we're going to be driving loyalty, margin accretive growth, and long-term category leadership. What I want to leave you with today is a very short video. It brings to life our number one brand, Canada's number one brand, actually, President's Choice. It brings to life how we earn that position in the first place, but more importantly, how we're going to maintain that going forward. I'll just play this for you.
Birds flying high, you know how I feel. Sun in the sky, you know how I feel. Reeds driftin' on by, you know how I feel. It's a new dawn. It's a new day. It's a new life for me, and I'm feeling good. Clouds driftin' by, you know how I feel. Moon in the night, you know how I feel. Yeah, feelin' good. You know how I feel. It's a new dawn. It's a new day. It's a new life for me, ooh. Ooh, ooh. Ooh. Feeling good.
I love that tune. Just for any music buffs out there, Muse, who do that version, they are actually from my hometown in the U.K., so it's got emotional connection with me. I'm now going to hand you over to the incredible superwoman, my fellow Brit, Danni. I couldn't do what I did without her team doing what they do, so I'm really delighted that she's following me up on the stage now.
Thanks, April. Always a difficult act to follow. Here we go. I always feel like I am doing karaoke when I do this. I am Danni Peirce. I lead our apparel and our non-food team, and also our sourcing function. I am here today to talk to you about how we are using our scale to unlock savings. Those savings is what we are reinvesting back into price. You have heard it from Per, from Gregers, from Frank, from Mel. We are here to support them in doing that. In terms of myself, I joined Loblaw last year. I moved here to Canada. My background, you can probably tell I am British originally. I have been in retail for over 20 years.
I started my retail career with Tesco in the U.K., and have been on a bit of a worldwide journey that has taken me through Australia, the U.S., and then I moved to Canada from Asia, where I worked for a big retail conglomerate out there called the DFI Retail Group, where I was most recently the CEO for 7-Eleven. I would not recommend to anyone moving from the equator, where I lived in Singapore, to Toronto in February. I spent my first week with my husband and my kids wearing a ski suit. You will be pleased to know that we have now adapted and very happy to be here in Canada. Similar to Per and to Gregors, I spent my first few weeks very much out in stores with our operators, listening and learning, as well as spending time with our growers and supplier partners.
I heard firsthand the fantastic partnerships and relationships that we had with our growers and supplier partners. I saw the great capabilities that we had across the organization as well. There was one thing that became clear as I listened to what could we do better, and it was about how do we utilize our enterprise scale and go forwards with one enterprise voice to be able to unlock savings across the organization. The reason that we can do that is because we have tremendous scale here in Canada. When I talk about that scale, this is the scale that I am referring to. Across our team, we spend CAD 45 billion across all these different categories, across grocery, across fresh, across health and beauty and non-food, and across GM and apparel. Really few retail organizations have the breadth of purchasing that we do.
The opportunity here was how do we buy better? How do we increasingly act as one enterprise? This is the thing that makes me want to get out of bed and leap out of bed and come out to work every day, is because every dollar that we save gives us the ability to invest back into price. It gives us the ability to invest back into our customers, and that is what fuels our growth. You saw it on one of Per's earlier slides. We said, "Right, we do not want to be Canada's best buying team." We think that is too easy. Actually, we think we have got the capabilities to build the world's best buying team, because we have got the scale, and we can turn that scale into value for our customers.
We said, "Right, well, how are we going to do that?" There are three ways that we're going to do that. One is we're going to source better. We're going to pay the right cost for the products that we're buying. Secondly, we've got to source closer. For us to win, Canada's got to win. We've got to build Canadian supply capacity, which is particularly important to support April's plans as well. Then finally, we've got to source for resilience. We've got to complement that with what we buy in Canada, but there are many products we can't get here in Canada. We've got to be the best at buying globally as well. All of this is supported by a future-ready team, and you heard Lauren talk a little bit about what we're doing in terms of AI there.
This is what we set out to do 18 months ago, and the great news is that we're already starting to see some really meaningful results from this. Before I get into cost decreases, I'm going to talk about fighting on behalf of Canadians when it comes to cost increases, because cost increases is a normal part of retail, but our job is to ensure that any increases that we take into our business are fair and are justified. We've introduced a new approach to how we look at cost increases and the discipline into how we review them. We've got better market intelligence. We've got the tool that Lauren referred to, an AI tool that takes into account all of the commodity data that we have, and we make sure that every cost increase that we assess, whether it is justified or not.
Then what we do is we have one enterprise voice in our supplier conversations. This year, that enabled us to push back on CAD 220 million of unjustified cost increases that otherwise would have come into our business and would have been passed on to customers at a time when grocery prices are the top thing on their minds. This is one example where coming together as an enterprise is making a meaningful difference. The other piece is on tariffs, and yesterday was round two of tariffs, and we were hoping we would never have to say that, but we are. We will again operate for our customers with the same transparency that we did last time. Every product that is tariffed will have a T on it.
It will be fewer products this year than it was last year, but the tariffs are particularly centered on non-food and health and beauty products, but the tariffs this time round are up to 50%, as you will know. We only pass on the penny-for-penny cost increase to our customers. Loblaw will never profit from any of these tariff increases. What we have done is we have a very disciplined way of dealing with these, and as soon as those tariffs roll off, then our cost will immediately revert back. These aren't costs that get built into our cost base over the long term. It's data, it's AI, and it's having one enterprise voice that has enabled us to do this.
This is cost increases, but the next bit is where it gets really exciting because this is how do we take our scale and enable stronger, more strategic partnerships to lower costs for our customers. I have three examples here for you. The first one is in produce. In produce, we would typically have spot bought. We would have bought out in the market when we needed products. What we have done on several of our produce categories is we have come together as one enterprise, pooled our volumes together, and we have agreed longer term contracts with our produce suppliers. That gives them the stability to be able to know what to plant. That gives them the stability to know what land they need to lease and better economics, which we are then able to share.
This is with Canadian growers, so this has been fantastic for us and there is more that we are going to be doing in this space. The next one is on meats, where we have taken a portfolio approach across the enterprise. Instead of negotiating the cost of individual products independently, we have come together and we have negotiated as one enterprise across a category. We have seen tremendous results from that as well in terms of our costs. Finally, on confectionery, this is a typical grocery category. There is a theme. We have come together as one enterprise. We have aligned on where we see growth opportunities, which suppliers we really believe that we can win with, and we have been able to use that to be able to secure savings in the confectionery category as well.
These are three very different categories, but one consistent approach, which is how do we use our scale to unlock cost and then be able to pass that on to the customer. Sourcing closer. We need to make sure that we have a strong Canadian supply base. We have onboarded 200 new Canadian suppliers so far this year, which is really exciting, and we have made it easier as well for our Canadian customers to find Canadian products in our stores. We have now over 35,000 products that have maple leaves on the shelf tags. We are really proud of our small supplier program. We now have over 1,200 small suppliers in that program. Over 90% of those suppliers are Canadians. We are really proud of this program because we are really tapped into what is important to our small suppliers.
We know it can be hard to deal with a big organization such as ourselves. We have a dedicated team to deal with any queries and to help our small suppliers to navigate. We know that cash flow is so important to these suppliers, and so we have 7-day payment terms for our small suppliers. Finally, Made-in-Canada fund, and we have Cornell from Wittington here today. We have partnered with Wittington Investments. It is a CAD 100 million fund. We have helped to provide a pipeline of suppliers into that fund, and this is very much targeted at categories where we are reliant on imports here in Canada and finding ways to partner with suppliers and invest in suppliers to build up Canadian supply. We have had some great successes coming in radishes, in trout, in leafy greens.
This is really exciting and is going to make a really meaningful difference here in Canada. Then sourcing for resilience. Per talked a little bit about this earlier. A couple of years ago, we joined what was at the time a European buying alliance. It has now become, with our presence, it has become a global buying alliance. You can see here the partners. Every retailer that is part of it is the number one grocery retailer in the market they operate. This year we have put well over CAD 1 billion of cogs through this program. It gives us access to a global supply base we did not have access to before. Because our volumes are 5x bigger than when we go alone, we are seeing really significant savings. This is on control brand products.
We are seeing anything from 5%-25% savings on the products that are going through AMS Sourcing. We are going to be doing more of this. This is a fantastic initiative for us. The other benefit of it is that we have also been able to dual supply some of the products, some of our best sellers, which in the past we would have been reliant on one supplier. It gives us more resilience there as well. This is the most important part. Myself and my team, we are focused on unlocking savings, delivering lower costs. That means that the presidents and the divisions can invest into price. That drives traffic into our stores, expands our share, and enables us to lead in growth. That creates the flywheel.
I will never be out of a job because if we can grow, then we can go back again and again, and this creates a repeatable playbook for us to be able to go and secure more savings. Thank you very much for your time. With that, I am going to hand over to Sonya from the Lifemark team. Thank you.
I am going to test my microphone before I walk up there. Maybe not this one. Thank you. There we go. We are going to change gears a little bit. Anyone heard of Lifemark before? Anyone know what we do? You have heard a lot about product. You have heard a lot about retail. That food just before lunch. I am standing between you and lunch right now, and the first thing I am going to do is ask everyone to stand up, arms over their head, because that is what we do. We do physical health, and you have been sitting for way too long, just to be clear. How are those sciatic nerves? My name is Sonya Lockyer. I am the President of Lifemark Health Group. I have spent more than 25 years in healthcare, relatively new to Loblaw, so I joined in 2023.
I arrived about six months before Per, so I had everything under control by the time he showed up. I started as a clinician in frontline healthcare before moving into management consulting, then into healthcare operations. Took my first CEO role at 38, almost a decade ago, if you can believe it. Much of my career has been spent leading businesses through significant change. You will notice on this slide there is a military insignia as well. The army taught me how to endure transformation, so you want to put it there. Anything from turnarounds to acquisitions. I spent most of my time in Canada, but did take a short stint internationally over to Europe and the Middle East.
I did that for inspiration because I said, "There is no way Canada is doing it right." I came back saying, "We are doing it mostly right, just not quite as efficiently as we need to." These experiences are incredibly relevant to what we are building at Lifemark today. Most Canadians know Shoppers, right? They know Shoppers. They know pharmacy. They understand that side of healthcare. Lifemark extends that healthcare presence into what we call community-based rehabilitation. Ours is a people-powered business. You will hear Rob shortly talking about how he ships products. You heard about Danni, about how we buy products. We sell people. We sell people helping people. Think about hands-on therapy. We have more than 6,000 team members that are helping Canadians recover from injury and illness. The injury can happen on the soccer field, very simple, acute injury, twisted ankle, tennis elbow.
Anyone over the age of 45 has probably experienced that, all the way to some pretty significant catastrophic injuries that could happen at the workplace, could happen in a motor vehicle accident. We serve people from the military with amputations, for example. We have the full spectrum of rehabilitation care. Today, I want to give you a sense of the scale of Lifemark. We are small, but we are mighty. I think the joke of the quarter is who is growing faster, T&T or Lifemark? I would like to say Lifemark. We are pretty good. How did Tina do is always what I ask. The growth we have delivered since joining Loblaw, which has been quite remarkable. Talk about the power of the enterprise getting behind a small business and seeing what it can do.
Then, of course, our path forward to the number that Richard really likes to think about, which is CAD 100 million in EBIT. Here is our scale. Let us start with that. Today, we are approximately 370 clinics across Canada. As I said, roughly 6,000 team members caring for Canadians. We generate roughly CAD 700 million in revenue in 2025, and we are currently seeing our same-store sales ranging from 8%-10%. That being said, the last couple of months has been exceptional, so I am excited about what is going to happen next year. But perhaps the most interesting number on this slide is actually the CAD 6 billion market growing at 4%-5% that we are part of. From the physical plant standpoint, i.e., the number of stores we have, we represent about 8% of that market. From a sales standpoint, we represent about 13% of that market.
That tells you something important about the opportunity ahead of Lifemark. Rehabilitation and care in Canada remains highly fragmented. Local regional providers, you walk through the door, quality not always certain. We have an opportunity inside of Lifemark, even at our scale, to continue to grow. The focus for growth for us is actually very practical. I like to call it practical growth in healthcare. It means more clinicians. It means more locations and ultimately more access for Canadians that need it. Gregors touched on the aging population. Being mobile, enjoying those things in life will become increasingly important as Canadians age. When people first hear of Lifemark, physio, right? That is what comes to mind. Community-based rehabilitation is roughly 50% of our revenue today. If any of you walk into an outpatient rehabilitation clinic, it usually has physiotherapy written on the door.
Physiotherapy is about 60% of our revenue from a community-based standpoint. But we are a diversified healthcare services business. So we have medical assessments, occupational therapy, the largest occupational therapy provider in Canada. We have massage therapy, we have mental health, vocational rehab, veterans care I mentioned, occupational health, and seniors wellness. So that is a very diversified health service offering that touches from acute all the way to specialty services. Our funding model is equally diverse. Approximately 65% of our revenue comes from third-party payers. That is always lovely. That would be insurers. So think about motor vehicle accident, your insurance is going to pay. Think about workers compensation boards if you are injured on the workplace. Employers pay as well as governments. The remaining portion is usually covered by an extended health benefit, which most people in this room would have.
Then roughly 10% of our revenue would be private pay, i.e., patients are paying out of their pocket for the services that we deliver. This breadth is actually one of Lifemark's most important strengths, because you put it all together, we have a diversified funding model, we have a diversified customer base, and we have geographies that are also diverse. Combine that with a growing, highly fragmented industry, we see a very attractive runway ahead. How do I think about that runway? I think about it in three chapters. I like to say, sometimes we actually growing as fast as we are at Lifemark, we traverse these chapters very quickly, so we are often setting strategy sort of a year, 18 months. The first way I am thinking about strategy is what we have today, which is very important.
It was very important when we first joined Loblaw that we cemented our foundation. We now have a national footprint, coast to coast, strong and evolving affiliate network. What that means is we do not necessarily have to own the clinic to have access to the clinicians. When our capacity is constrained internally, we can find a clinician in the Yukon, in Prince Edward Island to service that customer and patient need, and that is a very strong affiliate network. Of course, our customer relationships. So we have built a very strong platform. What do we do now? This is essentially what we are working on, effective immediately, is growing care across our channels. I will talk a little bit about that in a second, but that is doing more with what we already have. The second piece is how do we expand that network?
Acquisitions has been a significant source of growth for Lifemark since joining Loblaw, but before that as well. New locations. I get very excited when I see Mel talking about No Frills and Shoppers across the parking lot. We are not there yet, but I cannot wait till there is a Lifemark right there as well. Isn't that going to be great? There is the opportunity, of course, in the longer term, which is once we have the scale, once we have the sophistication, we will be able to partner in a different way across the enterprise. We will be able to unlock the customer experience differently within Shoppers, and that is what gets me excited. We have the platform, we know where the growth is coming from, and really, we have a track record of delivering it. Let us get into that track record.
Since joining Loblaw in 2022, Lifemark has delivered 18% sales CAGR. Very impressive. This has been on, I would say 50% organic, 50% inorganic. That is a question I always get asked. "Is this all M&A, Sonja?" No, it is not. Our same stores are doing extremely well. We are doing a lot better with the assets that we have under the hood. When I think about this growth as someone who is dedicated her entire career to healthcare services, it is what is behind these numbers that is really cool. Think about it. 1.5x as many clinicians helping Canadians. That is more access. 20% more locations across the country. We added 40 new locations last year. We have improved our operating efficiency. You hear in healthcare, we always talk about bending the cost curve. We have been talking about it for about 20 years in Canadian healthcare.
Lifemark is actually doing it. Our margin has improved by 125%. That means we are reducing that cost to serve, which is allowing us to reinvest back into more access for Canadians. For us, growth and access goes together. That is the passion. That is what drives everything inside of Lifemark is how do we help more Canadians? Every time we add a new clinician, expand a clinic, or enter a new community, we create more capacity to care for Canadians. That track record gives us the confidence for the next phase of growth. Here we are today. First, we are going to start growing our existing, we call these patient channels, we call them customer channels, but our channels. We already have the clinics, we already have the clinicians and the customer relationships. What really changed over the last three years is our scale.
We can now see our business in a different way, which we could not before. We now have the expertise and the capabilities within Lifemark to grow these channels much more deliberately, expanding what we offer, where we offer it, and to whom we offer it. This creates significant opportunities to do better within the network that we already have. It is not lost on us that the network needs to expand. We need more physical points on the map, and we will get those in two ways. We will continue our acquisition trajectory, but we will also build new locations, because that is going to be important. Last but not least, strengthening the operating model.
At 370 clinics, up roughly 150 since we were acquired, you need systems, technology and data and common ways of working that will allow us to operate consistently in the future and at what I would call a national enterprise scale. For me, that one is important as an enabler of the other two. We already have the scale, but how do we now make that scale work harder for us to improve the efficiency of how our clinicians are delivering care every day? Talked a lot about AI. Guess what went live inside of Lifemark yesterday? Ambient AI. That means my therapists are going to have their hands on patients, not on keyboards. They are going to have a conversation with their therapist, and the Ambient AI is going to write their note.
If you think about access and expanding access, the number one thing that clinicians talk about in Canada, they do not like the administrative burden that comes with delivering healthcare. If we were not inside of the Loblaw network, we would not have launched Ambient AI yesterday. Very proud of that. The future is bright. When I look ahead, I see a business with significant runway. We operate in a CAD 6 billion fragmented market. We demonstrated that we can grow 18% since joining, and we have a clear path. I can feel the CAD 100 million in EBIT. It is there. But what excites me most is what this growth is going to allow us to do for Canadians. One thing I did not mention, born in rural Newfoundland, small fishing village. There is no healthcare where I grew up.
When I left the military, I said I will serve my country in a different way, and it is to fix this healthcare system. It is a very tough. I will not see it in my lifetime, but Lord knows I will try. Every new clinician, every new location, every service we offer, ways of working changes. We get to build more capacity to care for Canadians and keep this country moving forward. That is the Lifemark growth story. Growth creates access, and I am very excited about what Loblaw, Shoppers and Lifemark can build together when we just get a little bit bigger. Rob, where is Rob? Rob is between you guys and lunch. It is going to be fun, though. Thank you very much.
Thanks, Sonya.
You're welcome.
Wow, that was inspiring. Fixing Canadian healthcare. Now you get to hear about supply chain. Forklifts. Sometimes I say to Per, I'd almost do this job for free until I got to do shit like this, and then I say, "I deserve a raise." Galen's here. I always say I'm not going to do this, but I did it. You know what, though? The F-bombs are going to be kept to a minimum for sure. My name's Rob Wiebe. I've got the privilege of leading the Loblaw supply chain. A little about myself, I've been here 42 years. Frank says he moved up because he was really good. Sometimes I think I moved up just because I was sort of the guy hanging around, and no one else would hire me, so they took pity on me and moved me up. But 42 years. Met my wife here.
She worked for Loblaw. Family, I've got one kid who's an engineer in Victoria. My daughter's a successful business person in Winnipeg. Then I got one hammerhead that runs up and down the field for the Saskatchewan Roughriders, so pretty happy with him. Some days. But I think one of the things I'm most proud of within the Loblaw supply chain is really about what we've done in terms of Go Further Women and really moving women ahead within the supply chain. It's really been something that's been close to my heart for quite some time, and we've had incredible operators that set really hard targets in terms of how many women we'll hire into our workforce.
I'm happy to say, in this distribution facility, we are 56% women, so over half are women within this DC, and that, I think, is an outstanding achievement for the management team here. Thanks. That'll help me, and if my legs start shaking, I'm going over here to the podium. This thing's not What are we doing here? There. This is our core supply chain for Loblaw, and we're really a supply chain to the shelf. What I love about focusing on this slide is we can never forget about our core. We're going to talk about the cool, sexy things a little bit later around how we're going to build revenue and those kinds of things. But this starts with we service Loblaw first. We service Shoppers Drug Mart, we service Frank's stores, we service Mel's stores, and that's that.
There's no fooling around on. See, Galen? I'm getting better. There's no room on that in terms of what time you're going to be there. Get there on time. Make sure your fill rate is good. That's non-negotiable. We only get to do the cool shit that we're going to talk about after this because we get the core right. As I said, that's non-negotiable. I've got a meeting every Tuesday morning where I have to face my brothers and sisters. I have to explain to them if I shit the bed, they're going to be on me. I've got to make sure that we do a great job, and they're going to hold me accountable, and well they should. Per, as I'm sure you've heard, is super good at holding us accountable as well. This is really our cost base.
Right now, we're very happy with where we're at from a cost perspective. Remember, this graph would include layering in fixed costs that we'll take in this building. We've been taking that most of last year and all of this year, and we're still able to bring the cost down. A lot of that is both driving the revenue, but it's also laser-focused on cost. We've got some of the most discreet labor standards in the country in our conventional distribution facilities. When you think about that, it's really when you come to work, we're going to track you from the time you're in the building and all the activities that you've performed. We give you a certain amount of time to do that work. When you leave, we understand when that is as well.
We want to make sure our workforce is productive. We're happy to pay some of the better wages in the industry, but we want to make sure that the work follows that as well. That really extends to our operational excellence. You got to see a facility here, which is our brand-new facility. I think you went through the 45. I'm not sure if you went through the 55, but you can see how many perishables we're doing. Within this building, of all the product that we're picking, we're over 90% within the automation. You don't hear that a lot for other retailers, but we've been very successful at working with our suppliers and getting the packaging we need that will support us through the automation. That's been a tremendous help for us as well.
I'm not sure, Roy MacDonald did show you a graph around what we do from a productivity perspective on the network. What we've really, I think, the team has done an incredible job on is understanding what best fits automation, and then what do we leave in our conventional network. That's why you're seeing such a strong performance from a productivity perspective and also from a cost perspective. There's also the commercialization. We want to grow a supply chain as a service. You probably heard about a little bit of that from Amazon, some of those other folks. I think when you reach a point and you feel you're quite good at what you're doing and world-class. You can start to do that for other people. It's not all food that we're doing.
It would be a lot of resources that we are working on as well, but I will get into some of those examples later. We have confidence in our plan to get to the CAD 400 million. We have been doing it already. I will show you that on the next slide. You do not need to worry about that yet. That is it. Why are we able to do this, and what is unique about Loblaw? I am going to talk about our diverse delivery network, the fact that we are within 10 minutes of 90% of the Canadian population with our stores, that we are in almost every small community every night because of the nature of the delivery of grocery business. There are other retailers that would be doing the same thing. Why are we unique? We have been on quite a journey in terms of getting product through our distribution network.
93% of the product that you will see in a store comes through our distribution channel. Of that 93%, 90% of that product, we control the transport on. From the time it is ordered, the time it is manufactured, we pick it up, and we bring it to our distribution facility. That level of penetration that we have got now gives us a unique ability to really service the Canadian marketplace in a different way from what some of our competitors can do. This is the exciting slide. Right now, we are running about CAD 200 million. We are going to do a little better than that this year. We are about CAD 200 million on 2025. 2026, sorry, anyway, we are going to be better than what we are saying here in 2026. We are very confident in our ability to build to the CAD 400 million.
When you think about what supply chain as a service is for us, it is warehousing. As we build these automated distribution facilities, we have got conventional facilities that we pull volume out of. Generally, you would say, "I will just close that distribution facility." What we chose to do is really repurpose that and go to the market and say, "We will offer you a complete supply chain package, both transport and warehouse." What I love about warehouse is the stickiness of the warehouse, because once you are in the warehouse, it is harder to get out. It is harder to pull that out and go to a separate warehouse. You have got inventory issues. You have got demand forecasting issues. We take care of all of that for many of our customers. On the freight forwarding side, this is really around the Loblaw scale.
We built our international network on small shipments because we started 10 years ago. These are small shipments that originate in China, originate in Asia, and we would have to build less than container loads. We have become incredibly good at doing that in an economical way, to the point where now we control much of the inland logistics. We started that with Loblaw, and now we offer that for our customers. Really excited where that can take us as well. We are more mature on the domestic truckload and less than truckload. Domestic truckload is pretty easy. You haul a load to Vancouver from Toronto. We will unload it at our distribution facility. We will pick up for a customer. We will get that unit back.
The key here is we are Canadian Pacific Kansas City's largest intermodal partner, and we would be in the top 10 for both Canadian National Railway and with Union Pacific down in the U.S. We are really happy about how we are positioned and how we can continue to grow that business. When you think of less than truckload, I like this example probably the best. There is a manufacturer in Stettler, Alberta, manufactures geothermal pumps for the petroleum industry. His biggest problem was he had an LTL service that would come up, but they only came up three days a week. He said, "I do not know when we are going to be finished. We may not be finished on a Tuesday, and I want to ship it on a Wednesday.
Right now, that service will not allow me to do that." I said, "Look, we are there seven days a week. We haul groceries. As long as it is in a crate that it will work in a food-safe trailer, we can haul that product." He is happy to do that. We can be incredibly flexible for him. When you think about the towns that we service from a grocery perspective, you can really start to gauge the level of concentration we can put into that market once we put our minds to it. We are really excited about what that can be as well. Cross-border U.S., we are doing that today. That would have been the first one we did.
A lot of that was because we did not feel we were being treated fairly from a freight rate perspective through COVID, and we decided to take more control of our freight, get our trucks, put our own trucks on, get a pickup in the U.S., and then bring our own produce back. We are now doing that to the tune of almost 1,000 loads a week. It is a pretty significant piece of the business for us. Because we are a little worried about what is going on south of the border, about 20% of our drivers are located south of the border. If there is an issue at the border, we can dispatch American drivers both from Great Falls, Montana, and Indianapolis, and we are going to continue to grow that. Again, we are pretty bullish on where that can go.
The U.S. brokerage, very, very new for us. That really comes about because a lot of customers say, "Well, I do not mind giving you my Toronto to California load, but I need you to take Toronto to Ohio. I need you to take Toronto to Kansas." If we do not have a ready backhaul on our own gear, then we need to find a way to help them with that load, and we do that through what is called freight brokerage. While again, it is in its infancy, there is a tremendous amount of growth, especially because you are servicing the U.S. market 10x the size of Canada. Again, we feel really good about that as well. Look, I have bored you long enough. You guys want lunch? I do not blame you. It is really good lunch.
Roy, did they get that puddle cleaned up you said there in the tent?
I think so.
There you go. That's what I got for you. Hopefully at Q&A, you've got good questions. I'm not a very good speaker, but I'm a pretty good question answerer. Love to hear it. Thanks a lot.
All right. Yeah. Thanks, Rob. Your guys got that cleaned up, and they arranged for the rain to stop, so we're good to go now. We're running a little bit behind. We'll cut the lunch time down to 45 minutes, if that's okay with everybody. We'll adjourn out the same door you came in. You'll see the tent on your left. Follow the crowd. There's some great food waiting, and we can continue the conversations offline. Enjoy, and we'll see you back after lunch. Thank you. What time? It's what? 20 after. We'll be back five after 1:00. All right. All right. Good afternoon, everybody. Okay, back. Welcome back. I hope everybody had a great lunch. Mary's incredible team helped put this together. We brought in one of our company chefs, known affectionately as Chef Tom, who curated the meal and put everything together.
Hope you guys all enjoyed it and you've identified some good finds for your shopping basket this weekend. We are going to bring it all together now. The last official portion of it will be Richard Dufresne, our CFO. I will get him up here in a second. He is going to bring this whole thing together and talk about our financial framework and consistency. You might have noticed an odd sight in the food tent this afternoon. We are lucky enough to bring Michael Van Aelst back from retirement for a day. Apparently, it was raining in Montreal and he could not golf, so he is going to join us today. He is going to lead a fireside chat with our Chairman, Galen Weston, after Richard is done, so it is going to be an exciting afternoon. With that, let me call Richard up to the stage.
Thank you, Roy. Good afternoon, everybody. My name is Richard Dufresne. Whoop. That one? Okay. My name is Richard Dufresne. I have been with the group for over 15 years. Long enough to know this business quite well, but not long enough to stop being excited about what is to come. My goal this afternoon is to connect all you have heard this morning with our numbers and describe why we all think that the great performance we have historically is going to continue going forward. If I start, all of you have seen the strong performance we have delivered over the years. Consistency has been a theme, but the nature of our business being necessity-based retail leads itself well for stable growth and earnings. Our performance is strong despite us having significantly invested in our business over the last few years.
We have invested in our stores, we have invested in supply chain, we acquired Lifemark, we are investing in T&T U.S., and we have also ramped up our AI initiatives. Despite all of these investments, we delivered consistent performance. This investment phase is essentially peaking now. Many of you are familiar with our financial framework. This framework was introduced years ago as a concept to reflect the specific nature of our business. Our business is inherently low growth, but to deliver acceptable returns to our shareholders, we determined that we needed to deliver more absolute earnings growth. The way to do so requires us to grow our expenses at a lower rate than our top line. We refer to that as operating leverage. Through operating leverage, we can transform a 2%-3% top line growth into 4%-6% EBIT growth.
Further, because of the significant excess cash flow we generate with our business, we can grow EPS growth by another 2%+ . This is a framework. It is not financial guidance because if you look what we have been doing recently, our top-line growth has actually been way higher than that. We are closer to 4%, and that is because we built many new stores. The concept is more important than the numbers, and that is what I wanted to convey. To illustrate numerically what I mean by the framework, we generate about CAD 65 billion of sales and about CAD 5 billion of EBIT. To deliver 8%-10% EPS growth, we need to grow EBIT by CAD 250 million-CAD 300 million a year. That is exactly what we need to do. Very roughly, we expect Mel and Frank to deliver about CAD 100 million of EBIT growth year in, year out.
Gregers should give us around CAD 150 million of EBIT growth, and our growth business is the balance. If you were to look back in the last three, four years, this is more or less what we've achieved with a bit of put and takes, but that's how we've done it. This is actually a very crude outcome of the very rigorous annual budgeting process that we launch every spring. But that's how we look at our business year in, year out. Since the EQ deal just closed, we thought it would be maybe too early to invite Chadwick to talk to you, but we have Daniel with us today, so thanks for coming, Daniel. But here is financially what we're trying to achieve here. Again, roughly, PC Financial, we're generating about CAD 120 million of earnings.
We expect that our 25% share in EQ, which we'll get to at some point next year, will generate more or less the same CAD 120 million of earnings, but with higher growth and less volatility. On top of that, we expect, and that I'm looking at you, Daniel, right now, that you will issue more Mastercard annually than we've done in the past. If Daniel issue more Mastercards, we're going to be issuing more PC Optimum points, which will translate in more sales. So win-win-win. This is what we're trying to achieve here. I want to be very quick on this one. It's just very interesting to simply compare our financial performance with some of our peers. Our share price CAGR is best in class, as is our EPS growth.
What it shows to me is that we're clearly ahead of our Canadian peers, but we also fare quite well when we look to our global ones. Capital allocation is a process we take very seriously. For each decision, we challenge not only the cash flow but also the amount invested. You've heard about this a little bit this morning. Many times over the past few years, we found ways to improve our returns, not by generating more sales or earnings, but spending less capital to generate a similar level of return. This is not easy. It's actually been difficult, but it's proven very useful for us to accept a number of projects that otherwise would have been rejected. Bottom line is the discipline that we've instilled on ourselves has allowed us to deliver an improving return on invested capital over the last five years.
Bottom line, though, the most important metric that drives our ability to continue to deliver on our strategy remains our new store performance. At the end of this year, we will have opened 200 new stores in three years. About half grocery stores, mostly discount, and half Shoppers. Essentially, all of these stores are doing well. This is giving us the conviction that discount food stores and Shoppers Drug Mart boxes continue to resonate with customers. We therefore plan to continuing to open new stores at that pace we've been going at, 70 to 75, which is probably 35 new stores, 35 Shoppers. But I need to remind everybody, on the food side, this represents only 1.5% of square footage growth. I said it, CapEx is peaking. We've ramped up both our new store and our supply chain capital.
Our supply chain program will slow down considerably once our second automated DC in Caledon opens in 2028. Caledon will be essentially a carbon copy of this building. Our new store capital will continue. Therefore, starting in 2028, you will see a meaningful reduction in our CapEx, and this additional cash flow will be allocated towards share buyback. Whichever way you want to look at Loblaw, we generate significant amount of free cash flow. With EBITDA close to CAD 7.5 billion, CapEx of CAD 2 billion, dividends of CAD 600 million, we still buy back more than CAD 2 billion worth of our stock every year. All of this while maintaining a very strong balance sheet. We have the right strategy. On core retail, Frank is running a lower growth but growing EBIT business that is gaining market share versus its peers.
Mel is winning a lot of market share through her square footage growth while slowly growing EBIT margin as it drives scale. By the way, I have said it, she is only adding 1.5% of square footage growth. Gregers is running a business that has tailwind in both pharmacy and beauty. If you go to the far right of the slide in our growth businesses, all of them are growing earnings at double digit. All are reaching some form of scale other than T&T U.S. EQ should start contributing to our growth hopefully in 2027. As you go back in the middle, our digital business, namely food e-commerce, leads in market share. You look at personalization and connected healthcare, this is clearly differentiating us from everybody.
I am sure you got this, we are at the forefront of AI of any Canadian and maybe any North American retailer. You heard April, private label leadership will continue to fuel growth as it has done in the past, but I feel we are just on the verge of actually ramping it up even more. Last but not least, sourcing is now harnessing our scale and driving real business results. It is hard for me to not be excited at what is coming next for Loblaw, but I still have one more slide. We feel our framework has longevity. I just walked you through how I think about our core retail business. 2025 and 2026 were harder years for us because of the drag of ramping up new stores and ramping up a new DC. Also, T&T U.S. is also a real drag on earnings, okay?
2027 becomes relatively easier as those drags will be gone. I want to be very clear, okay? We are not changing our framework. The framework stays the same. It is just that from your perspective, we had to work much harder in 2025 and 2026 to deliver our framework. That is now behind us. As we project our growth businesses, because they are growing double digit, we see them representing 20% of our earnings five years from now, versus about 10% today. To conclude, we feel very well positioned in our markets. I hope you feel that we have the best team, and therefore we should continue to perform. I will invite Galen and Mike for the fireside chat. Thank you.
I can get around here.
Welcome back.
Thanks, Galen. Feels different this time.
Yeah. You are not usually up on stage.
Nope. No, and I'm wearing golf pants. A little bit of symbolism there.
Yeah.
Great to have you here.
Yeah, great to be here. Did everybody enjoy your lunch? I don't know what it was, but I didn't eat. I was like, I tried to eat, and then I was chit-chatting with people, so I didn't get to eat very much. Mary, and to your whole team, thanks. It was really terrific.
Yeah. Difficult to eat in those situations. But it's great that you're here in front of shareholders and giving us some views, and I certainly would appreciate it if I were sitting on that side. Particularly because as chairman of the board and the largest shareholder at Loblaw, you have a significant vested interest in the businesses that were discussed today. I'd like to explore both perspectives. If we start off, as a fourth-generation leader, you've often said that as a family business, that means thinking in decades, not quarters. Do you see any tension between the long-term view that you take versus the priorities of investors, many of which have much, much shorter views?
I was asking, "What's the average time horizon for people in the room? Will it be three to five years?" He's like, "No, more like a quarter or two." Maybe a couple of people might get up to two years. I think from a big picture perspective, you could imagine that there's a tension between a generational outlook versus a quarterly or even an annual outlook. I think where we are now, that tension is at a historic minimum. Why? Because of the financial framework that Richard articulates and reiterated here today. We've designed that framework intentionally, to have a sensible set of targets. We're not trying to maximize profit in any given year. What we're trying to do is to deliver consistency of performance and anchor all of our planning around that framework.
In doing so, we create for ourselves the capacity to do what we need to do to sustain the business for multiple quarters and ultimately decades, which is a really important priority for me, and is something that Per and I are completely aligned on in how we think about that framework. He was the one who came to us and said, "Actually, we need to put a bit more top-line growth here to ease the pressure on that operating leverage just a little bit," because if there's too much pressure on the operating leverage, it can lead to us making short-term decisions that will negatively impact that kind of generational outcome. As Richard described, over the last four or five years, we've been on an investment peak.
It's the fact that we've been making investments in technology for 20 years, and in our estate, in SAP, in our warehouse management systems, in our new supply chain distribution systems. Those are the infrastructure foundations that have allowed Lauren and David, and others to build on top of, to move in these really innovative areas so rapidly. We're going to try and strike the balance all the way through, and if that means that we deliver 10% instead of 15% one year because we want to push value to the consumer, we're going to do that if we feel that strategically we need to do it. I don't see any tension. Certainly, there's no tension between me and Per and between me and Richard, and our goal today is to make sure you don't feel any tension between us and you guys.
Consistency is what we're committing to, and that's the basis on which you should be investing in Loblaw.
Certainly makes it a lot easier to invest long term when you have the short-term results, right?
100%.
It was about three years ago that you stepped back out of the CEO role and Per stepped into that role. I always find it interesting to think about how you let go and how you transition that. Can you provide some insights into how you work together with Per? Also, how you are investing your time within the company and some of those areas that maybe you're having a harder time letting go as the other chairman might not.
Maybe I just won't let go of a couple of things. No, that's a good question. First of all, let me say this. Per joined us three years ago, and he is an absolute pleasure to work with. For me, that is incredibly. It's a gift, really. When you combine that with how exceptional he is as a retailer and as a leader, I count myself extremely privileged as the representative of the ownership group of the company. What Per brings in addition to his retail excellence, is he's got great values, which are really synergistic with my own approach and my family's approach to how to do business. He's super competitive, so he always wants to win, which is kind of exciting. It keeps us all on edge, I think. Making sure that we feel the same competitive intensity even at my level.
Then we have different strengths, and I think we have found over the last couple of years that those strengths are very compatible. They're very synergistic with one another, and it means we spend a lot of time chatting and talking. As someone who feels such a generational sense of responsibility for Loblaw, to be working with somebody who wants input and wants to sort of brainstorm on things, it's a really lovely combination. Per, I appreciate it, as you know very much. How do we work? There are a few places that I stay particularly interested in. It won't surprise those of you who know me. The work that the organization's been doing around its digital ecosystem, PC Optimum, PC Express, this recent launch of PC Health and the AI chat assistant.
These are areas that have been really close to my heart for many years. Per and I've been working really closely together on those to continue to push the level of ambition and aspiration so that we can take advantage of this technological advancement that we have. So those are two. Along with Sonya, I'm very passionate about opportunities to improve the Canadian healthcare system, and the combination of our digital capability with our physical footprint, which includes Lifemark and obviously Shoppers Drug Mart. That's an area that I spend a lot of time with Per and the team on.
The third one, April and I were just chit-chatting about, as a one-time, long-time spokesperson for President's Choice, I get a disproportionate number of fabulous President's Choice lunches where I get a chance to talk to April about what she's doing and where she's going and what she's thinking about. We have very similar aligned ideas around opportunities going forward. So those are kind of the three areas I spend the detailed time in Loblaw on. Of course, when it comes to the long-term strategy, capital allocation, should we be thinking of any materially different steps, I'll collaborate very much with Richard and with Per on those things. We got a lot of other things going on in the group and the organization. Richard and I had our first board meeting at EQ Bank just a week or so ago.
We're doing some really interesting things at Wittington from a private capital allocation perspective. Danni talked about one of the areas of partnership that Wittington's private investment group is working with Loblaw. So I guess I feel we have a group with this very attractive construct of a private holding company with a tremendous amount of financial flexibility. We have a public holding company that gives us enormous flexibility around the structure and ownership of our public operating businesses. Then we have Loblaw generating a tremendous amount of cash flow. We have Choice Properties, which has just announced a very significant transformational deal and also generates a significant amount of cash flow.
So one of the things that I do at George along with Richard and others is how do we optimize this incoming cash flow, and make sure that we use it to strengthen the long-term position of the operating businesses and the collective. I think that the group is very much in a situation where the whole is greater than the sum of the parts. That's been a long journey to get to that place. It's no surprise that Choice describes its relationship with Loblaw as its single biggest strategic advantage. We're increasingly seeing synergies between Wittington and Loblaw and Choice that are also driving value for Loblaw and, of course, other parts of the group.
Since you brought up the structure, maybe I will jump to that question, and I have a feeling it will be a pretty short answer. But I was asked over the years, what is the purpose of Weston staying public? Particularly, I think as you have made acquisitions at Loblaw, you have made acquisitions at Choice, both businesses are getting to the point where they probably cannot make too many more acquisitions, at least in their immediate disciplines. So what is the purpose from your perspective of keeping Weston public?
Yeah, you are right. We do get asked that question a lot, so thanks for asking it again. George is a 97-year-old public company, okay? It was listed in 1929, which seems weird. I did not know they were doing IPOs in 1929, but apparently they were. I share that because the current circumstances of George Weston with two terrific operating businesses, quite different to the circumstances of George, say, in the 1950s. Over the course of 100 years, we have been in the pulp and paper business, we have been in the fishing business, we have been in the milling business, the sugar business, the packaging business, the chocolate bar business. We have basically been in almost every business, the bakery business, cookies. We have a long history of doing different things inside and through George Weston.
As part of that architecture, we have had multiple public companies inside the George Weston holding company structure. That flexibility has been extremely valuable to the family over that kind of generational outlook. Just because it does not look that it looks a little bit redundant today does not mean that it is going to be redundant 25 years from now or 30 years from now. It serves a very effective purpose for us as a family. I see no time horizon right now where taking that entity out of the public markets would make sense. The holding company discount is 14%, and you guys will get a 14% bump if I was to buy out your shares in George tomorrow.
Over the next 10 years, we will do a lot better than 14%, in our view, by holding George and benefiting from the growth and success of both Choice and Loblaw. That is certainly how I see it. I do not really want to tie up another CAD 20 billion or whatever the number is, CAD 10 billion in George stock right now. I would rather have that flexibility to put that cash to work to support other ambitions that we have, whether in Loblaw or at Choice or privately.
Okay. It is a bit longer than I expected.
I do not know. You said you wanted the exact, so anyway, there you go.
All right, so back to the operating business. What gives you the greatest confidence in Loblaw's long-term outlook? At the same time, that might not take too long, but same time, what is the biggest concern that you are looking at that you are seeing lately? Is it regulatory reform or potential for new competition?
Yeah.
Consumer health?
Yeah.
A lot of risks out there.
Well, look, I think it's exactly what Richard put up on the board. Why are we all have such high conviction around Loblaw? We have a terrific core business in food and drug. That core business is being aided by a small but meaningful new store growth tailwind. In retail businesses, a new store growth tailwind is profoundly helpful. Per brought a type of thinking to our strategy, which was, "Hey, we can do a little bit better here. We can do a little bit more here and take," as I said, "that pressure off the SG&A." So the fact that we've got that going and the fact that it is working as well as it is the first thing that gives me confidence. The second is that non-core business growth.
So the fact that is going to increase, let's say from 10% of total earnings to 20%, should give everybody here a sense of, wow, these guys have another non-competitive, highly accretive, fast-growing pool of earnings growth that has reached a level of scale that makes it meaningful to the overall enterprise. So that's the second pillar, which has been strategically in our minds now for eight or 10 years, but is now actually achieving the level of contribution that we wanted, and we'll move beyond that. So those are the two things that give me lots of conviction. What do I worry about? Well, we have great competitors here. Despite what the federal government says, we compete aggressively with Walmart and with Costco and increasingly with Amazon. They all have unique strengths that they bring to the market that make them difficult to compete against.
But I'm not afraid of them. I don't think our management team is afraid of them. We also have great strengths that we bring to the market to effectively compete against them. So we're hypervigilant. We watch them very carefully, we respond to them, and we play our own game as well. I probably worry more at my level about the things that are outside of our control. Hyperinflation in cost of living and particularly the cost of food, that is something that I do occasionally lose sleep over. It's out of our control, and it has a tremendous capacity to impact the way that our business functions, both in terms of how do you manage costs in the context of sort of a difficult inflationary environment, and then what's the political and regulatory response to that type of volatility. I worry about that a little bit, too.
I do not see it imminently, but there is so much destabilization in the world, you have to keep an eye on it. It makes investing every extra dollar in lowering prices or putting low-priced food formats into the country ever more important. It is an imperative that not only we are seen to be lowering prices for Canadians, but that we are actually lowering prices for Canadians. That is our best defense against that type of uncertainty, and I know Per and the management team are totally dedicated to that.
Okay. From your perspective, and I know we have talked about a lot of areas of growth already today, but are there any significant investments that were not discussed today that Loblaw or Shoppers Drug Mart might need to maintain that moat that they currently have? Is there anything from a geographic growth perspective that people should be thinking about and anything that is off the table?
Yes. I think we have a great plan. Our framework gives us the capacity to make the necessary investments to drive the core strategy forward. Maybe two areas that we would ask ourselves about regularly. One, is there an opportunity to deploy capital in inorganic places that increase the size, scale, or growth rate of some of these non-core businesses? Lifemark is an example of an adjacent non-core business. Maybe there is an inorganic opportunity to scale that up. Supply chain. I do not know, maybe supply chain as a service. Rob comes to Per and Richard and says, "You know what? We can do more if we acquired some supply chain assets." We ask ourselves, are there places where we can grow our adjacent businesses more effectively by deploying some inorganic capital? That is one.
I want to say, this is not me saying this is what we are going to do. This is just me saying, we ask these questions. Is there an opportunity? Hmm, do not know. We have been asking them for 10 years. We have only done a couple of things in that respect. The second one, are there other geographies that we would consider? We are a big business. I think it is important to ask ourselves that question on a periodic basis. I would just say this, that if we were going to deploy capital in another country, we would do so against a format, a concept, or a business that we felt met accretive growth aspirations, that met accretive earnings metrics, and that is something we felt had a really strong chance of winning. We are not going to go out there and buy a business in Loblaw that we need to fix.
This would be about businesses that we could confidently bring into the fold that would expand our geography and do so in a manner that was accretive to the financial framework. Which would be the same, by the way, in any adjacent businesses in Canada.
Great. I guess just to wrap it up, you have had the unique opportunity to lead this company as a CEO. You are the largest shareholder, you are now chairman. What is the one message that you want to leave shareholders with today?
I think confidence. I hope that you have seen today a really talented group of executives who know their stuff incredibly well, that have a passion and energy that is both about execution and also about bringing excitement and innovation to the things that they do. If I am excited, you guys should be excited, and that you can have real confidence that if you were to put a CAD against the Loblaw stock price, this team will deliver against their commitments from a financial perspective.
Great. Thank you. I think that is all our time.
Okay. Mike, thanks. I really appreciate you coming. Thanks. Hi, how are you?
Great. We are getting to the end of the first session because the Q&A will not be recorded, so I will just do a short wrap-up before we go to the Q&A. I just want to dwell a little bit with the framework. I always ask during launch a few questions that with all the great ideas that you guys have, how can you then manage to stay within the 8-10? If all comes true, which of course it will not, we hope and we work hard that it will, then why will you not deliver more? I think to what Galen said, what we will do, we have a few levers to keep it down. If we were so lucky to do better, we could invest faster in the U.S. with T&T.
I know Tina, she will be very happy to do more than three stores a year and with that growth rate and the performance that you are doing in T&T, then that would faster turnaround to be a great contributor to our profit. Also investing back in prices and in customers. That is something that we are already doing now because of the work that Danni Peirce is doing. So we have reduced a significant amount of prices in the east with the Real Canadian Superstores. As I said, we have a test in Newfoundland on Shoppers. We have a test in Zehrs, so we are investing back in our customers. When we do that, we will be better priced than a few of our Canadian competitors, and we will get very close to some of the others.
By doing it, and hopefully others cannot follow us, we will be more competitive and we will be able to basically support our revenue, not only in the short term, but also in the long term. Because supporting with better prices is real and something that customers want us to do, and we just started that journey, and it is so great. Last week, I was in Zehrs Cambridge, talking to customers, talking to our colleagues. Their excitement about us going out lowering prices, that is something that you really, really feel. It is great, and we can do it at the same time as a minimum, keeping the margin percentage. That is not going to be hurt because like the AMS Sourcing in Europe, we will be able to take some of that profit to margin and more importantly, to customers. Okay.
Today, I think I will use the phrase that April used, if we can go from strong to unstoppable, then I would be really, really pleased. I hope that you experienced a very strong and very diverse team with significant experience within each their field. Also a team that are bringing new ideas. I think it's a good mix of long-term experience from Loblaw, some younger people from abroad. I think we have four Europeans up there with all their odd ideas. We have young talents from Loblaw, from Canada, who are pushing all of us like you're doing, Lauren, all the time together with David. It's fantastic to be in a team, and I hope also that you sense that we like each other. We like to work together.
When we like each other, when we like to work together, then we allow ourselves to push each other harder because we want a win together for customers. We want to win. We are not, as, what are you saying, Mel? We don't want to lose, we just. We want to win more. We want to win more. That's how we are. I think just some of the ideas that we have, whether it's right-hand side, it's food relying in Shoppers, it's a new beauty concept that Greg is bringing, it's e-commerce in Shoppers, it's a strong pharmacy growth, it's the GLP-1s, it's our strong cost discipline. We haven't talked a lot about it, but Galen here alluded to it. We are very disciplined about taking cost out. We're also using AI to take cost out.
We need to get that SG&A leverage over time because it's so easy that it just creeps up. When it's doing well, it can just creep up a little bit, a little bit more. So we have a philosophy like on the VP level, one in, one out. We actually took our number of VPs down from, I think from 210 to 160, 170 over the last year. So we can do more with less fewer. I would rather invest more people in stores and give customers more service. Then there's a new rule, the Hard Discount stores. It's a healthcare chat. What can they do to book more appointments at Shoppers? Then we have the Beyond Saturday, why we are here today. What can Rob do with his supply chain?
You saw the CAD 400 million up there, and I never seen Rob promise a number that he hasn't delivered. So I trust in him and as much in his team to go about and do it. You saw Lifemark with Sonya, also a lot of great ideas. Tina, the excitement that you're bringing to your team, to U.S. I think you are in trouble, if any, right? Then the retail media. So we have those businesses that support us going forward. Again, going on, have you heard about anything? Of course, we are positive. We believe in the future, and I think we have a business that are very well-balanced no matter where the economy goes well or it goes sour because we have a third is Shoppers, two-thirds is food.
One third of food is Hard Discount, one third is conventional, and one third is our Real Canadian Superstore. We are very well-balanced to meet the needs of Canadians. Well, of course, if customers have less money, if they suffer, our concept will be lower. Do not worry, we know it is an important number. Even if a little bit lower, we will do our utmost to deliver within our framework. I think with these words, I would say many thanks for you to show up today. It is much appreciated that you want to take a day out of your busy calendar to show up and listen to us and the team. Thanks for coming. Then probably close the online, and then we will go over to Q&A. Thank you.