Supermarket chains across Canada, including Loblaw Companies Ltd. (TSE: LCB) and Metro Inc. (TSE: MRU), are reporting significant revenue growth within their in-store pharmacy units, driven by soaring consumer demand for GLP-1 weight loss medications like Ozempic, even as generic alternatives introduce pricing pressures.
The Bottom Line
- Prescription-Led Growth: Pharmacy revenue increases at Loblaw and Metro outpaced their traditional grocery segments in recent reporting periods.
- Volume vs. Price: While generic alternatives reduce unit prices for active ingredients like semaglutide, surging prescription volumes are more than offsetting the deflationary pressure.
- Retail Expansion: Major grocers are expanding physical pharmacy footprints and adding digital weight-management services to capture long-term patient loyalty.
Decoding the Pharmacy Profit Engine Inside Grocery Chains
While discount grocery aisles have traditionally served as the primary battleground for supermarket revenue, retail balance sheets are revealing an unexpected growth driver hidden behind the pharmacy counter. The surging popularity of GLP-1 receptor agonists—originally developed for type 2 diabetes but widely utilized for weight management—is fundamentally reshaping retail pharmacy economics.
Major Canadian grocers are seeing volume increases for these therapies as accessibility widens. Loblaw, which owns Shoppers Drug Mart and Pharmaprix, reported an approximate 40% increase in GLP-1 sales across each of its last two quarters. Meanwhile, pharmacy revenues expanded at Loblaw and at Metro during their respective recent quarters, outperforming grocery sales growth.
But the top-line figures only tell part of the story. As regulatory bodies expand approvals for lower-cost generic alternatives, the market is undergoing a structural shift from an exclusive, high-cost therapy to a high-volume consumer staple.
| Company | Pharmacy Revenue Growth | Key Driver / Statement |
|---|---|---|
| Loblaw Companies Ltd. (TSE: LCB) | (Latest Quarter) | Reported ~40% growth in GLP-1 sales over the last two quarters; expects double-digit growth in 2027. |
| Metro Inc. (TSE: MRU) | (Latest Quarter) | Noted solid fundamental demand and rising prescription volumes compensating for generic pricing pressure. |
Navigating Generic Price Deflation and Volume Surge
Canada is the first G7 nation to approve generic versions of semaglutide, introducing immediate pricing deflation into the market. Health Canada has approved three generic products to date, altering the economic profile of a category once dismissed by critics as an exclusive treatment.
As Amar Singh, senior director and retail insights lead for Canadian retail at Kantar, noted during an interview, “On l’appelait autrefois le médicament des riches. Il était onéreux, mais aujourd’hui, avec l’arrivée des génériques, sa pénétration augmente, car son coût a baissé et davantage de personnes peuvent se le permettre.”
This democratization of access directly impacts retail margins. When generic variants enter the market, revenue per prescription typically declines. However, industry executives maintain that volume expansion acts as a natural hedge.
During a recent analyst call, Per Bank, directeur général of Loblaw, stated, “Nous commençons à constater l’impact de la mise en vente des médicaments à base de GLP-1. Il est encore très tôt, mais les premiers signes sont encourageants.” Loblaw leadership projects continued double-digit growth for these medications in 2027.
Echoing this outlook, Eric La Flèche, outgoing directeur général of Metro—which operates the Jean Coutu pharmacy network—told analysts that patient adoption metrics remain robust. “À mesure que l’offre de génériques continue de se développer, nous prévoyons que l’expansion continue de la catégorie GLP-1 entraînera une croissance du volume et de la contribution se situant dans la fourchette basse des 10 %,” La Flèche explained.
Supporting this thesis, Kathleen Wong, an analyst at Veritas, highlighted in an August note on Metro’s earnings that rising prescription volumes should offset a significant portion of the pricing pressure caused by generic rollouts.
Consolidating Retail Footprints and Patient Services
To capitalize on this sustained momentum, major food and pharmacy retailers are expanding their physical and digital footprints. Loblaw has opened approximately 200 stores over the past three years, with nearly half designated as pharmacies, according to Veritas data. Concurrently, Empire acquired nine Morelli’s pharmacies in Ontario embedded within Longo’s supermarkets.
Beyond filling prescriptions, grocers are redesigning digital ecosystems to capture the behavioral shift of consumers using GLP-1 therapies. Jo-Ann McArthur, president of Nourish Food Marketing, points out that these medications alter consumer diets, presenting supermarkets with opportunities to offer customized meal-planning services, specialized grocery labeling, and integrated digital wellness tools.
For example, Loblaw deployed an online weight-management portal late last year designed to connect users directly with healthcare professionals for medication eligibility assessments. By combining pharmacy foot traffic with targeted retail health services, supermarket chains are transforming dispensing counters into long-term customer acquisition hubs.
