Deliverable 5 - Interpreting Key Performance Indicators/ Excel File, Summary, Data Visuals, Dashboards, ScoreCard
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F O L LO W U S
ICB code 3700A company and industry analysis
Current Environment • The US personal care, drug and grocery store industry was sluggish over the six months to April 2020 amid the coronavirus (COVID-19) pandemic outbreak worldwide.
• The US personal care, drug and grocery store public market weakened in the six months between October 17, 2019 and April 17, 2020, by an average of 3.64% with five out of ten companies analyzed by Mergent had experienced fall in share prices.
• Canada’s personal care, drug and grocery store industry posted a weak performance over the six months to April 2020. The coronavirus widespread has been deeply affecting the Canadian beauty and personal care industry.
• The share prices of the leading Canada personal care, drug and grocery stores firms analyzed by Mergent, fell by an average of 4.75% from October 17, 2019 to April 17, 2020.
Industry Profile • The US Census Bureau reported that the estimated health and personal care stores seasonally adjusted retail revenue rose by 0.80% to US$59.29 billion in the two months to February 2020, from US$58.82 billion a year ago, while the estimated revenue of grocery stores across the US totaled US$117.07 billion, 2.81% up from US$113.87 billion.
• The US International Trade Association stated that the personal care and beauty industry posted a significant part in the US economy which creates job opportunities across the country.
• Canada’s personal care, drug and grocery store industry is steadily expanding by producing diverse products to keep up with the shifting of spending behavior, lifestyle and demographic.
• The health and personal care seasonally adjusted retail trade witnessed a revenue growth of 0.75%, to C$4.03 billion (US$2.87 billion) in January 2020, from C$4 billion (US$2.85 billion) in January 2019, while grocery stores sales increased as well by 3.79% to C$8.22 billion (US$5.86 billion), from C$7.92 billion (US$5.65 billion) in the same period, the Statistics Canada reported.
Market Trends and Outlook • The US market has seen a growing presence of skincare products formulated with probiotics over the past few years.
• Pharmaceutical companies in the US are among the factors in the hiking prices as they want to gain higher profits causing rapid rise in healthcare expenditures.
• The preference for organic food is growing significantly among Canadian consumers due to the exposure to chemicals used in pesticides and fertilizers that can cause harms to human’s health and to the environment.
• In Canada, there is a growing number of companies’ incorporating CBD into their products to cater to their consumers with wide array of skin conditions.
CURRENT ENVIRONMENT UNITED STATES • Sector Overview • Sector Performance • Sector Indexes • Leading Companies • Mergers, Acquisitions and Alliances • Initial Public Offerings
CURRENT ENVIRONMENT CANADA • Sector Overview • Sector Performance • Leading Companies • Mergers, Acquisitions and Alliances • Initial Public Offerings
INDUSTRY PROFILE UNITED STATES • Industry Overview • Sector Employment • Industry Segments • Policy and Regulatory Environment
INDUSTRY PROFILE CANADA • Industry Overview • Sector Employment • Industry Segments • Policy and Regulatory Environment
ENVIRONMENTAL, SOCIAL AND GOVERNANCE • Companies’ Environmental Efforts • Socially Responsible Companies • Good Corporate Governance Matters • Company ESG Ratings
MARKET TRENDS AND OUTLOOK UNITED STATES • Emerging Probiotics Skincare • Clothing Retailers Branching Out to Different Segments
• Sky-high Drug Prices • Market Outlook
MARKET TRENDS AND OUTLOOK CANADA • Demand for Organic Food Grows • Cannabidiol (CBD) Permeated Personal Care Market
• Sensory-Friendly Grocery Stores Emerges
• Market Outlook
CURRENCY CONVERSION TABLE THE SCOPE OF THIS REPORT KEY REFERENCES COMPARATIVE COMPANY DATA INDUSTRY REPORTS COVERAGE
Contents Key Points
Personal Care, Drug and Grocery Stores North America
JUNE 2020
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Personal Care, Drug and Grocery Stores
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Personal Care, Drug and Grocery Stores North America
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The North America Industry Reports are published by FTSE Russell, headquartered in Fort Mill, South Carolina, USA. Each industry sector report is updated every six months. FTSE Russell, a leading provider of global business and financial information on publicly traded companies, operates sales offices in key North American cities as well as London, Tokyo and Melbourne.
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Personal Care, Drug and Grocery Stores
Consumers are trying to minimize the risks associated with frequent shopping by buying goods in large quantity which have caused empty shelves across stores. More consumers have resorted to cooking at home with the closure of several restaurants as they stay indoors. However, grocers are worried of their employees’ safety and health, consequently, most companies including Walmart Inc (NYSE: WMT), Kroger Co (NYSE: KR) and Target Corp (NYSE: TGT) are reported to deploy employees’ temperature checks and provide masks and gloves for safety precautions. Consumer are prioritizing their expenditure on needs to survive during the crisis and the impact may be felt by beauty market.
In 2019, there are several drugstore chains plan to shut down across the country including Walgreens Boots Alliance Inc (NASDAQ: WBA), HealthPartners and CVS Health Corp (NYSE: CVS) in 2019 and more to come in 2020. These companies are closing multiple underperforming and slowing new openings in locally and internationally. The industry is facing challenges such as high operating costs and declining reimbursement rates for
medications. This could result in more job cuts in the future. It is also to better position themselves in the coming years.
Online retailer Amazon.com (NASDAQ: AMZN) will be launching its own grocery store format in Los Angeles, California which is different from its Amazon Go and Whole Foods. This highly anticipated store is predicted to open in 2020 and offer shopping experience with a combination of in-store shopping and online ordering.
Sector Performance
The US personal care, drug and grocery store public market weakened in the six months between October 17, 2019 and April 17, 2020, by an average of 3.64% with five out of ten companies analyzed by Mergent had experienced fall in share prices. Among the selected companies, retail titan Walmart Inc was the strongest performer with its share price rose by 10.25% from US$119.84 to US$132.12 in the reviewed period. The high gain was supported by investors reacted positively
Sector Overview
The US personal care, drug and grocery store industry was sluggish over the six months to April 2020 amid the coronavirus (COVID-19) pandemic outbreak worldwide. The nation is currently under lockdown restrictions and Americans are ordered to practice social distancing to slow the spread of COVID-19. The crisis has led to massive mall and store closures affecting except for essential retailers like grocery and drug stores so companies are shifting to online services by offering deliveries and pick-ups to adapt to the changes in shopping patterns.
Current Environment United States
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Personal Care, Drug and Grocery StoresCurrent Environment United States
towards companies involved in supplying essential goods as demand for products such as food and household goods soars.
Meanwhile, global beauty firm Coty Inc (NYSE: COTY) was the weakest performer as its shares declined by 43.63% to US$5.75, from US$10.20. The drop was led by the challenging environment affecting the beauty sector during the COVID-19 occurrence. The firm also predicts that its upcoming fiscal third quarter of 2020 sales to decline and COVID-19 is forcing the company to cut Executive Pay by 25%.
Sector Indexes
The FTSE Global Equity Index measures capital growth of an industry or sector within a mixed time period to determine the worldwide performance of personal goods sector in the US. The index showed the industry had a negative total return of 16.43% in the three months ended April 17, 2020. It also recorded a negative total return of 13.81% in the year-to-date, April 17, 2020. This showed the softening of the overall sector over the period.
Leading Companies
Based on Mergent analysis, CVS Health Corp had the biggest revenue growth. It reported a robust revenue result which grew by 22.91% to US$66.89 billion in the quarter ended December 2019, from US$54.42 billion a year earlier, while its net income also surged by 513.30% to US$1.74 billion, from -US$421 million. The healthcare company’s acquisition of Aetna insurance business in November 2018 and higher volume in both the Pharmacy Services and Retail/Long-Term Care segments help drove sales up. Furthermore, the solid net profit was thanks to the increased operating income impacted by Aetna, and higher claims volume and enhanced purchasing economics in the Pharmacy Services segment.
In the similar period, Coty Inc, however, was the worst gainer in terms of revenue. The company’s revenue decreased by 6.37% to US$2.35 billion, from US$2.51 billion. The company reported that its revenue in the quarter was impacted by negative foreign exchange and decline in its Consumer Beauty division.
Table 1: Stock Performance of Leading US Personal Care, Drug & Grocery Stores Companies
Companies Closing Price Percentage
ChangeOctober 17, 2019 April 17, 2020 Walmart Inc (NYSE: WMT) US$119.84 US$132.12 10.25%
Lululemon Athletica (NASDAQ : LULU) US$204.96 US$225.86 10.20%
Colgate-Palmolive Co (NYSE: CL) US$68.08 US$73.42 7.84%
Procter & Gamble Co (NYSE: PG) US$116.63 US$124.69 6.91%
Kimberly-Clark Corp (NYSE: KMB) US$135.62 US$141.94 4.66%
Church & Dwight Co (NYSE: CHD) US$73.76 US$73.55 -0.28%
CVS Health Corp (NYSE: CVS) US$66.50 US$63.36 -4.72%
Estee Lauder Companies Inc (NYSE: EL) US$187.7 US$174.26 -7.16%
Walgreens Boots Alliance Inc (NYSE: WBA) US$55.94 US$44.50 -20.45%
Coty Inc (NYSE: COTY) US$10.20 US$5.75 -43.63%
Average Rise/Fall -3.64% Source: Mergent analysis
Table 2: FTSE Global Equity Index Series - USD (Total Return)
FTSE Index Name Value Return 1 day 1 week 1 month 3 months Year-to-Date
Personal Goods Sector US$776.70 2.67% 2.32% 13.52% -16.43% -13.81% Note: Based on end-of-day data for the Total Return Index as at April 17, 2020 Source: FTSE Equity Index
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Personal Care, Drug and Grocery Stores
Meanwhile, Walgreens Boots Alliance Inc’s posted lowest net earnings growth year-on-year (y-o-y) in the quarter ended February 2020 by -18.45%, from US$1.16 billion to US$946 million. The firm reported a decrease in operating income due to lower US pharmacy gross margin and y-o-y bonus changes, partially offset by cost savings from the Transformation Cost Management Program. It also experienced a decline in its retail pharmacy international sales mainly from its struggling Boots UK sales as well as in Chile and Thailand.
Mergers, Acquisitions and Alliances
Mergers, acquisitions and alliances in the US were inactive in the period between January and April 2020. The most notable deal was Yum! Brands Inc’s (NYSE: YUM) merger with the Habit Restaurants Inc. The transaction adds the first fast-casual concept to the acquirer’s portfolio of iconic global restaurant brands such as Kentucky Fried Chicken (KFC), Taco Bell and Pizza Hut.
Current Environment United States
Table 3: Revenue and Net Income of Leading US Personal Care, Drug & Grocery Stores Companies
Companies Revenue Percentage
Change Net Income Percentage
ChangeQ4 2019 Q4 2018 Q4 2019 Q4 2018
CVS Health Corp US$66.89 billion
US$54.42 billion
22.91% US$1.74 billion
- US$421 million
513.30%
Lululemon Athletica
US$1.40 billion
US$1.20 billion
16.67% US$298 million
US$218.50 million
36.38%
Estee Lauder Companies Inc
US$4.62 billion
US$4.01 billion
15.21% US$557 million
US$573 million
-2.79%
Church & Dwight Co Inc
US$1.14 billion
US$1.07 billion
6.54% US$144.40 million
US$142.80 million
1.12%
Colgate- Palmolive Co
US$4.02 billion
US$3.81 billion
5.51% US$643 million
US$606 million
6.11%
Procter & Gamble Co
US$17.21 billion
US$16.46 billion
4.56% US$2.92 billion
US$2.75 billion
6.18%
Walgreens Boots Alliance Inc
US$35.82 billion
US$34.53 billion
3.74% US$946 million
US$1.16 billion
-18.45%
Walmart Inc US$141.67 billion
US$138.79 billion
2.08% US$4.14 billion
US$3.69 billion
12.20%
Kimberly-Clark Corp
US$4.58 billion
US$4.57 billion
0.22% US$547 million
US$411 million
33.09%
Coty Inc US$2.35 billion
US$2.51 billion
-6.37% - US$21.10 million
- US$960.60 million
97.80%
Source: Mergent analysis
Table 4: US Personal Care, Drug & Grocery Stores Mergers, Acquisitions and Alliances
Announcement Date
Acquirer Target Deal Value Deal Status Form of the Transaction
Deal Purpose
Country
February 24, 2020
Core-Mark Holding Co Inc (NASDAQ: CORE)
Core-Mark Holding Co Inc
US$60 million
Pending Buyback Create shareholder value
US - US
January 6, 2020 Yum! Brands Inc
Habit Restaurants Inc
US$337.02 million
Completed Merger Improve operational efficiency
US - US
Source: Refinitiv
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Personal Care, Drug and Grocery StoresCurrent Environment United States
Initial Public Offerings
The number of the industry-related initial public offerings (IPO) activity subdued in the period between January and April 2020. Supermarket company Grocery Outlet Holding Corp kicked of secondary offerings of shares of common stock in January 2020. The firm announced a total of 16,000,000 shares were offered at US$33 per share to the public.
Table 5: US Personal Care, Drug & Grocery Stores Initial Public Offerings
Filed/Issue Date
Listing Date
IPO Issuer Name Ticker Issue Type
Offer Price Amount Country
April 15, 2020
April 16, 2020
Filed Performance Food Group Co
NYSE: PFGC Follow On
US$22.50 US$303.75 million
US
April 15, 2020
April 16, 2020
Priced Performance Food Group Co
NYSE: PFGC Follow On
US$22.50 US$303.75 million
US
March 25, 2020
March 26, 2020
Filed XpressSpa Group Inc
NASDAQ: XSPA
Follow On
US$0.20 US$1.49 million
US
March 25, 2020
March 26, 2020
Priced XpressSpa Group Inc
NASDAQ: XSPA
Follow On
US$0.20 US$1.49 million
US
January 29, 2020
January 30, 2020
Priced Grocery Outlet Holding Corp
NASDAQ: GO
Follow On
US$33 US$528 million
US
January 27, 2020
January 30, 2020
Filed Grocery Outlet Holding Corp
NASDAQ: GO
Follow On
US$33 US$528 million
US
January 16, 2020
January 20, 2020
Filed Aspen Group Inc NASDAQ: ASPU
Follow On
US$7.15 US$15.02 million
US
January 17, 2020
January 20, 2020
Priced Aspen Group Inc NASDAQ: ASPU
Follow On
US$7.15 US$15.02 million
United States
Source: Refinitiv
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Personal Care, Drug and Grocery Stores
Besides hand sanitizers and soaps, there is also high demand for products such as tissues, masks, gloves and household cleaning goods. The sales of hand sanitizers, and masks and gloves showed initial signals of shifting consumer behavior, increased 477% and 122% respectively as early as the last week of January, and posted 639% and 377% growths respectively in the week ending March 14th compared to the 2019 average, according to the Statistics Canada.
Businesses are escalating for most Canadian grocers and pharmacies as customers began to stock up since the Covid-19 outbreak. With stores limiting operating hours and for safety measures, online shopping soars for convenience. The changing buying habits will make Canadians more comfortable with online retail environment.
In December 2019, Trump administration has proposed certain prescription drugs importation plans from other countries where Canada is included as its drug prices are much cheaper. Canadian authorities are concerned that this will put its drug supply at risks as there might not be
enough supply to meet US demand. American consumers are crossing borders and making online purchase to bring in Canadian drugs into the US.
Sector Performance
The share prices of the leading Canada personal care, drug and grocery stores firms analyzed by Mergent, fell by an average of 4.75% from October 17, 2019 to April 17, 2020. HLS Therapeutics (TSX: HLS), a specialty pharmaceutical firm, was the strongest performer during the timeline. Its stock price rose by 25.85% from C$14.66 (US$10.45) to C$18.45 (US$13.15). The announcement of Vascepa’s approval by Health Canada at the end of 2019 and Vascepa’s launching date influenced the increase of its share price in the reviewed period. Vascepa is an approved medication to reduce cardiovascular risk.
Commercial dermatology firm Crescita Therapeutics Inc (TSX: CTX) was the weakest performer over the six-month under review as its share price declined by 51.14% from C$0.88
Sector Overview
Canada’s personal care, drug and grocery store industry posted a weak performance over the six months to April 2020. The coronavirus widespread has been deeply affecting the Canadian beauty and personal care industry. Consumers are cutting back on their spending on premium beauty and other personal care products and concentrate more on buying necessities in the uncertain duration. There is a surging demand for hand sanitizers and soaps as they are reported to reduce the risk of the infection.
Current Environment Canada
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Personal Care, Drug and Grocery StoresCurrent Environment Canada
(US$0.63) to C$0.43 (US$0.31). The company’s stock price continued to fall following the declaration of Covid-19 a pandemic.
Leading Companies
Based on Mergent analysis, Metro Inc was the top performer, as its revenue grew by 7.84% to C$3.99 billion (US$2.84 billion) in the quarter ended March 2020, compared with C$3.70 billion
(US$2.64 billion) the previous year. The increase was contributed by its improved grocery stores and pharmacies same-store sales by 9.70% and 7.90% respectively in the period. The shift in its Christmas holiday sales represent 0.60% of the food same- store sales number.
Meanwhile, Crescita Therapeutics Inc had the lowest gain. Its revenue decreased by 38.39% to C$3.82 million (US$2.72 million) in the quarter ended December 2019, from C$6.20 million
Table 6: Stock Performance of Leading Canada Personal Care, Drug & Grocery Stores Companies
Companies Closing Price Percentage
ChangeOctober 17, 2019 April 17, 2020 HLS Therapeutics (TSX: HLS) C$14.66 (US$10.45) C$18.45 (US$13.15) 25.85%
KP Tissue Inc (TSX: KPT) C$9.11 (US$6.50) C$9.80 (US$6.99) 7.57%
Cascades Inc (TSX: CAS) C$11.93 (US$8.51) C$12.75 (US$9.09) 6.87%
Metro Inc (TSX: MRU) C$56.23 (US$40.09) C$59.72 (US$42.58) 6.21%
Loblaw Companies Ltd (TSX: L) C$71.50 (US$50.98) C$73.93 (US$52.71) 3.40%
Alimentation Couche-Tard Inc (TSX: ATD.B) C$39.17 (US$27.93) C$40.38 (US$28.79) 3.09%
George Weston Ltd (TSX: WN) C$109.28 (US$77.92) C$105.10 (US$74.94) -3.83%
North West Co Inc (TSX: NWC) C$28.07 (US$20.01) C$24.37 (US$17.38) -13.18%
Domtar Corp (TSX: UFS) C$45.05 (US$32.12) C$30.46 (US$21.72) -32.39%
Crescita Therapeutics Inc (TSX: CTX) C$0.88 (US$0.63) C$0.43 (US$0.31) -51.14%
Average Rise/Fall -4.75% Source: Mergent analysis
Table 7: Revenue and Net Income of Leading Canada Personal Care, Drug & Grocery Stores Companies
Companies Revenue Percentage
Change Net Income Percentage
ChangeQ4 2019 Q4 2018 Q4 2019 Q4 2018
Metro Inc C$3.99 billion (US$2.84 billion)
C$3.70 billion (US$2.64 billion)
7.84% C$176.20 million (US$125.63 million)
C$121.50 million (US$86.63 million)
45.02%
North West Co Inc C$553.10 million (US$394.36 million)
C$532.50 million (US$379.67 million)
3.87% C$16.30 million (US$11.62 million)
C$13.10 million (US$9.34 million)
24.43%
George Weston Ltd C$12.11 billion (US$8.63 billion)
C$11.72 billion (US$8.36 billion)
3.33% C$443 million (US$315.86 million)
C$281 million (US$200.35 million)
57.65%
Loblaw Companies Ltd
C$11.59 billion (US$8.26 billion)
C$11.22 billion (US$8 billion)
3.30% C$257 million (US$183.24 million)
C$231 million (US$164.70 million)
11.26%
Cascades Inc C$1.23 billion (US$876.99 million)
C$1.20 billion (US$855.60 million)
2.50% -C$26 million (-US$18.54 million)
-C$67 million (-US$47.77 million)
61.19%
Alimentation Couche-Tard Inc
US$16.60 billion US$16.52 billion 0.48% US$659.90 million US$612.10 million 7.81%
KP Tissue Inc C$348.10 million (US$248.20 million)
C$359.33 million (US$256.20 million)
-3.13% -C$6.11 million (-US$4.36 million)
C$37.96 million (US$27.07 million)
-116.10%
Domtar Corp US$1.24 billion US$1.39 billion -10.79% -US$34 million US$87 million -139.08%
HLS Therapeutics US$13.94 million US$16.66 million -16.33% -US$12.22 million US$369,000 -3,411.65%
Crescita Therapeutics Inc
C$3.82 million (US$2.72 million)
C$6.20 million (US$4.42 million)
-38.39% -C$483,000 (-US$344,379)
C$3.11 million (US$2.22 million)
-115.53%
Source: Mergent analysis
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Personal Care, Drug and Grocery StoresCurrent Environment Canada
(US$4.42 million) a year earlier. The firm reported that the decrease was reflected from its out- licensing business due to the timing of a C$1,321 (US$941.87) sales milestone under the Taro Agreement in the similar quarter of fiscal 2018, which did not recurrence in the current quarter. It also recognized a decreased in royalties from the global net sales of its anesthetic cream, Pliaglis, mainly due to US distributors did not purchase product in the period as they had enough inventory. Packaging and tissue producer Cascades Inc’s net earnings for the quarter ended December 2019 had the highest growth which was a net loss improved year-on-year (y-o-y) to -C$26 million (-US$18.54 million), 61.19% up from -C$67 million (-US$47.77 million). One of the factors affecting lower net loss was advantageous prices for raw material across its four businesses, reduced energy expenses in all segments apart from Specialty Products, and business acquisitions completed in the one-year period strengthening the operating results.
On the other hand, HLS Therapeutics had the weakest net income growth. Its net income dipped by 3,411.65% to -US$12.22 million in the quarter ended December 2019, compared with US$369,000 in the corresponding quarter of fiscal 2018. The company witnessed a cut in Clozaril product sales, lower Absorica royalties and the
rise in other operating expenses like the selling and marketing costs and medical, regulatory and patient support costs linked to preparations for the launch of Vascepa and CSAN Pronto that pushed adjusted earnings before tax, interest, depreciation and amortization (EBITDA) down.
Mergers, Acquisitions and Alliances
Mergers, acquisitions and alliances activity in Canada was relatively quiet in in the period between January and April 2020. Based on the data by Refinitiv, one of the largest alcohol and cannabis retailers Alcanna Inc (TSX: CLIQ) purchased Canadian Liquor Retailers Alliance LP interest from Ace Liquor Corp which was valued at US$4.44 per unit.
Initial Public Offerings
The number of the industry-related initial public offerings (IPO) activity subdued between the period of January and April 2020. Food company The Very Good Food Co Inc announced that it has filed preliminary prospectus for IPO of common shares with the securities regulatory authorities in British Columbia, Ontario, Alberta and Saskatchewan provinces.
Table 8: Canada Personal Care, Drug & Grocery Stores Mergers, Acquisition and Alliances
Announcement Date
Acquirer Target Deal Value Deal Status
Form of the Transaction
Deal Purpose Country
March 19, 2020 Champignon Brands Inc (CSE: SHRM)
Novo Formulations Limited
US$2.84 million
Pending Merger Improve operational efficiency
Canada - Canada
January 22, 2020
Alcanna Inc (TSX: CLIQ)
Canadian Liquor Retailers Alliance LP
US$13.18 million
Completed Acquisition of Remaining Interest
Expand presence in primary market
Canada - Canada
Source: Refinitiv
Table 9: Canada Personal Care, Drug & Grocery Stores Initial Public Offerings
Filed/Issue Date
Listing Date
IPO Issuer Name Ticker Issue Type
Offer Price Amount Country
January 10, 2020
N/A Filed The Very Good Food Co Inc
N/A IPO N/A US$2.68 million
Canada
Source: Refinitiv
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Personal Care, Drug and Grocery Stores
The agency’s recent data showed that the exports of toiletries and cosmetics increased by 0.88% from US$1.14 billion in January 2019 to US$1.15 billion in the same period in 2020. Meanwhile, imports totaled US$1.05 billion, 0.95% up from US$1.06 billion. The most popular products are including beauty, skin care and hair care, thanks to the highly innovative and quality goods. The US International Trade Association stated that the personal care and beauty industry posted a significant part in the US economy which creates job opportunities across the country.
Sector Employment
Based on the estimation by the Bureau of Labor Statistics (BLS), the total employment in grocery stores experienced a fall of 0.61% to 8.10 million in the fourth quarter of 2019, from 8.15 million in the previous year, while in beauty stores it decreased by 7.14% to 524,000, from 564,300. The sector also witnessed a drop of 1.89% to 2.08 million, from 2.12 million in pharmacies and drugstores’ employment in the same period.
Mounting demand in personal care has also improved employment in the manufacturing sector. Under the personal care and home goods production, the employment reached 332,700 in the fourth quarter of 2019, 0.24% up from 331,900 in the same quarter in 2018, according to the BLS.
The BLS also projects that personal care and service industry employment will expand by 17% from 2018 to 2028, faster than the average rate for all other occupations. Furthermore, the growth will generate about 1.20 million job creations. Personal care employment also includes personal aides due to growing elderly population. Additionally, pharmacy occupation is likely to move statically from 2018 to 2028 because of the increasing orders through mail and online pharmacies.
Industry Segments
Skincare
The skincare segment continues to evolve over the years with various partnerships and innovations,
Industry Overview
The personal care, drug and grocery store industries are among the important components of the US major trade activities. The US Census Bureau reported that the estimated health and personal care stores seasonally adjusted retail revenue rose by 0.80% to US$59.29 billion in the two months to February 2020, from US$58.82 billion a year ago. In the similar period, it also indicated that estimated revenue of grocery stores across the US totaled US$117.07 billion, 2.81% up from US$113.87 billion.
Industry Profile United States
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Personal Care, Drug and Grocery StoresIndustry Profile United States
thus, it experienced booming market growth. In the competitive crowded skincare market in the US and global, research and development (R&D) is crucial to remain in the crowd as many startups are joining the market and to keep up with the changing consumer preferences.
Americans’ exposure to lifestyle and social media especially the younger generations drives the mounting demand for skincare products such as moisturizer, sunscreens, face masks, cosmetics, body scrubs and body lotions. This has forced skincare companies to be more innovative with the help of emerging trends and technologies. They are developing more personalized products based on consumers’ skin types to cater to many groups of consumers through technology integration. For instance, Neutrogena launched its Mask iD service using its own application called Skin360 to design a 3D printed sheet mask where it will recommend what ingredients you need in the masks according to face area it needs.
Safe and clean products are increasing in popularity among consumers nowadays. Demand for chemical-free, natural and organic products has witnessed growth in recent years fueled by consumers’ awareness of what they are applying onto their skin. Despite being mostly more expensive in the market, consumers are willing to spend more for the benefits contained in the products. Although women are the primary consumers in the skincare industry, men are also showing interest in the products.
Hair Care
Many American companies are leading the hair care market due to increased presence of local brands that focus on providing high quality hair care products such as shampoo, conditioner, mask, serum and colorant for diverse hair types. Shampoos have been popular in the segment as they are a daily essential. Companies are also producing hair products ranging from affordable to luxurious lines to give more alternatives to consumers. For example, Procter and Gamble Co (NYSE: PG) and Johnson and Johnson (NYSE: JNJ)
alone offer varied selection of hair care line to fit consumers’ demand and preferences.
Like skincare, there is a rising number of consumers who are willing to spend more for their hair care. Consumers also seek for chemical-free, skin- friendly and cruelty-free hair care. The high accessibility to information on products drives growth in the segment. They are more attentive of the benefits of the products for healthier hair. Moreover, with more hair treatment products available in the market, they can treat their hair at home instead of doing it at saloons.
OTC Drugs & Grocery Stores
In the US, there is a high access for consumers to purchase non-prescription medicines as a first treatment for minor sicknesses like allergies, common cold, skin inflammation and fungal infections. Millions of Americans purchase over- the-counter (OTC) medicines on an average of US$442 annually, according to the Consumer Healthcare Products Association (CHPA). The study done by the CHPA discovered that the OTC drugs consumption helped save healthcare systems by billions yearly.
There are also more than 750,000 retail outlets selling OTC products in the US, compared to 54,000 pharmacies. The association also reported that the sales of OTC medicines rose by 1.70% to US$35.23 billion in 2018, from US$34.64 billion in 2017.
The US is home to many giant grocers, for instance, Albertsons Cos Inc, Kroger Co (NYSE: KR), Costco Wholesale Corp (NASDAQ: COST) and Walmart Inc (NYSE: WMT). The BLS reported that grocery stores sales in the fourth quarter of 2019 grew y-o-y by 3.28% from US$170.23 billion to US$175.81 billion. The sales expanded as companies develop through mergers, collaborations and partnerships. Grocers have
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also been diving into technologies to improve consumer experiences and e-commerce is growing significantly.
Policy and Regulatory Environment
On March 17, 2020, the US Food and Drug Administration (FDA) has announced it is taking steps to ensure that there will not be food supply-
chain disruption by issuing a temporary policy for FDA Food Safety Modernization Act (FSMA) supplier verification onsite audit requirements during the widespread coronavirus public health emergency. This action is to meet the spiking demand of food and essentials nationwide and at the same time continuing to manage supplier verification activities that are outlined to ensure food safety and following the Government’s travel restrictions and advisories.
Table 10: Total OTC Retail Sales from 2015 to 2018
Table 11: Seasonally Adjusted Grocery Store Sales
Source: Consumer Healthcare Products Association
Source: US Census Bureau
US$32.88 billion
US$33.76 billion
US$34.64 billion
US$35.23 billion
2015 2016 2017 2018
US$56.77 billion
US$56.81 billion
US$56.65 billion
US$57.70 billion
US$56.17 billion
US$57.23 billion
US$57.45 billion
US$57.69 billion
US$58.13 billion
US$58.75 billion
US$58.76 billion
US$58.25 billion
US$58.30 billion
US$58.56 billion
US$58.68 billion
US$58.57 billion
US$58.50 billion
54.5 55 55.5 56 56.5 57 57.5 58 58.5 59
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
Oct-19
Nov-19
Dec-19
Jan-20
Feb-20
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The health and personal care seasonally adjusted retail trade witnessed a revenue growth of 0.75%, to C$4.03 billion (US$2.87 billion) in January 2020, from C$4 billion (US$2.85 billion) in January 2019, the Statistics Canada reported. With abundant personal care trends and shifting consumer behaviors, a slew of new and innovative beauty products and skincare formulations hit the market.
Grocery stores sales increased as well by 3.79% to C$8.22 billion (US$5.86 billion), from C$7.92 billion (US$5.65 billion) in the same period. Technology advancements are taking over traditional stores by combining physical and digital approaches to give unique experiences for customers in stores. This has benefit retail companies as competition tightens and consumers nowadays are also eager to try latest products and services’ developments offered.
The agency’s latest data showed that the seasonally adjusted exports of toiletries and cleansing products on a balance of payments basis fell by 1.26% to C$628 million (US$447.76 million) in the first two months of 2020, from C$636 million (US$453.47 million) in the previous year. This was contributed by a lower January 2020 export. Meanwhile, imports fell by 14.71% in the similar timeline totaled C$1.16 billion (US$827.08 million), compared with C$1.36 billion (US$969.68 million).
Sector Employment
In retail sector, grocery stores employment increased by 3.22% y-o-y to 410,122 in 2019, from 397,310 and employment in health while personal care stores grew by 1.27% to 199,717, from 197,207, according to the Statistics Canada.
There is an expanding demand for personal care and over-the-counter (OTC) drugs which contributed in the increasing pharmaceutical and medicine manufacturing employment. The segment rose by 3.52% to 30,853 workers in 2019, against 29,804 a prior year while, the soap and cleaning compound manufacturing employment decreased by 1.54% to 16,542 workers, from 16,801.
Industry Segments
Skincare
Skincare segment in Canada is known for its quality, clean and green skincare products that are in high demand globally, from facial to body care to suit consumers’ healthier lifestyles. Local brands constantly bring in fresh ideas to their ingredients and packaging. Pioneers of natural and
Industry Overview
Canada’s personal care, drug and grocery store industry is steadily growing by producing diverse products to keep up with the changing of spending behavior, lifestyle and demographic. The industry’s revenue growth is highly influenced by consumer preferences and spending.
Industry Profile Canada
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organic skincare in the beauty industry such as Province Apothecary, Graydon, Wildcraft, Smith Farms, Bathorium, Rocky Mountain Soap Company and Basd Body. Figures from Statistics Canada showed that cosmetics and fragrances retail sales posted an increase of 6.30% from C$1.27 billion (US$905.51 million) in the third quarter of 2018 to C$1.35 billion (US$962.55 million) in the same quarter in 2019. This includes colognes, face creams, facial masks, makeup remover and face powder, mascara, lipsticks and hand cream.
Nowadays, multistep facial care is popular, and it involves additional products such as facial mask, essence and serums in their daily skincare routine to achieve and to retain healthy and clearer skin. However, some consumers switch to minimal skincare steps, therefore, brands are making products with several benefits in one product. Furthermore, plentiful brands tapped into international markets through digital mediums to reach customers better.
Hair Care
Canada’s hair care market is a diverse and potential destination for hair care innovations in partnership with established companies globally. Its growth is driven mostly by millennial and aging population
from seeking nourishing alternatives to normal hair care products. High presence of both small and multinational companies stimulated customers’ demand. Many brands aim to create several shampoo lines to deliver to consumers with various hair kinds and textures.
Local brands are progressively dipping their toes into the market to compete with multinational brands that are already dominating the segment in Canada. They are aggressively competing by innovating products to fit current consumer trends with both affordable and premium products. In support of cruelty-free and vegan products, several large private Canadian brands like Sudsatorium, BKIND, Boo Bamboo, Green Beaver and Cake Beauty are creating safe and unique hair goods ranging from shampoos, hair styling and hair treatments.
OTC Drugs & Grocery Stores
There is a growing exposure to self-care practices among consumers, thus, many opt to use OTC drugs as their first treatment. The Consumer Health Products Canada (CHP Canada) reported that approximately 73% of Canadian deemed themselves with health literacy as excellent or sufficient. Additionally, the association learned
Industry Profile Canada
Table 12: Non-Prescription Drugs Sold in Retail
Source: Statistics Canada
C$23.74 billion (US$16.93 billion)
C$23.99 billion (US$17.10 billion)
C$23.78 billion (US$16.96 billion)
C$23.87 billion (US$17.02 billion)
C$24.37 billion (US$17.38 billion)
Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
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that over three-quarters of Canadians would rather handle their own non-severe illness and only one out of seven Canadians consult with doctor the minor sickness, such as headaches, coughs, allergy and colds.
The revenue of non-prescription drugs sold in retail saw a decline of 3.93% to C$935.35 million (US$666.90 million) in the third quarter of 2019, from C$973.65 million (US$694.21 million) a year earlier, according to Statistics Canada. In August 2019, the Government announced the enactment of lower patented drug prices in the country which was primarily planned to come into effect in January 2020 but delayed to July 2020.
Grocery stores’ revenue grew by 2.65% to C$24.37 billion (US$17.38 billion), from C$23.74 billion (US$16.93 billion) on a quarterly basis most probably due to food prices surging following several factors occurred locally and globally like weaker Canadian currency and effect of trade of uncertainties with China, based on the report by Dalhousie University and University of Guelph, Canada.
Policy and Regulatory Environment
Canada is moving into banning single-use plastics by 2021 to reduce harmful plastic pollution. The disposable plastics include plastic grocery bags, straws, swizzle sticks, cutlery and plates, according to the Canadian officials. The Government will also work with provinces and territories to introduce standards and targets for plastic products and packaging manufacturer. Plastic shopping bags are officially banned in several provinces such as Nova Scotia, Prince Edward Island, Newfoundland and Labrador as environmental concerns mount.
Table 13: Seasonally Adjusted Grocery Stores Sales
Source: Statistics Canada
C$973.65 million (US$694.21 million)
C$977.23 million (US$696.76 million)
C$1.01 billion (US$720.13 million)
C$985.35 million (US$702.55 million)
C$935.35 million (US$666.90 million)
880 900 920 940 960 980 1000 1020
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
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Companies’ Environmental Efforts
Personal care, drug and grocery companies recognize the importance of protecting the environment and the effects of their operations push them to manage various programs and initiatives to reduce footprints. Many companies in North America are taking their approaches into account from energy efficiency to managing water consumption and waste reduction to combat climate issues.
Companies in the sector are gradually shifting into sustainable packaging and green formulations. In addition, companies are also incorporating sustainable sourcing partners to ensure that they achieve their goals. Brands are innovating solutions and progressively cutting down on plastic use in their products, thus, including recycled materials in their packaging. Nowadays, eco- friendly packaging and labeling are developed and promoted creatively. This can attract more of customers’ attention to purchase their products along with exposing them with more information on protecting the planet due to pollution from production processes and wastes.
Socially Responsible Companies The firms in the sector play an important role in integrating social initiatives in corporate culture and many firms understand its significance over the years. Socially responsible organizations can create and improve stakeholder values such as employees and communities, thus, strengthening investors’ confidence. Companies should foster diversity and inclusion in workplace, organize community events, and teambuilding programs to stop gender, class, religion and race preferences in the sector to sustain and attract consumers and talent pools. Furthermore, personal care, drug and grocery companies have come out with assorted products of different price ranges and functions to cater diverse consumers conditions.
Good Corporate Governance Matters
Personal care, drug and grocery companies these days emphasize on corporate policies implemented to administer themselves, guide into effective decision-making, adapt to regulations and meet the needs of stakeholders with the swift changes
Environmental, Social and Governance
There is an increasing amount of personal care, drug and grocery companies integrating environmental, social and governance (ESG) practices in their businesses. Consumers are also increasingly aware of their health and impacts of the business practices towards the environment and society. In recent years, ESG reporting is an advantage for companies to nurture their value as well as improve sales figures to sustain companies’ long-term performances.
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Personal Care, Drug and Grocery StoresEnvironmental, Social and Governance North America
in consumer behavior and trends. Good corporate governance also underpins consumers’ trusts, improve shareholder value and a major investment driver in the flourishing companies in the sector.
Company ESG Ratings
FTSE Russell has developed ESG Ratings to measure a company’s risk and performance across a variety of ESG areas. A risk-relative scoring
method is used, with a company’s exposure to each theme influencing indicator applicability and weighting rather than taking a generic or sector only approach. The ESG Ratings and data model allows investors to understand a company’s exposure to and management of ESG issues in multiple dimensions. Selected ESG ratings for leading companies are shown below. Of the companies assessed, Colgate-Palmolive (NYSE: CL) has the highest ESG rating.
Table 14: The Top 20 ESG Ranked Personal Care, Drug and Grocery Stores Companies
Company Country ESG Rating Colgate-Palmolive (NYSE: CL) United States 4.3
Kimberly-Clark Corp (NYSE: KMB) United States 4.0
Nike, Inc Cl B (NYSE: NKE) United States 3.9
Procter & Gamble (NYSE: PG) United States 3.8
PVH Corp (NYSE: PVH) United States 3.8
Sysco Corp (NYSE: SYY) United States 3.8
Hanesbrands Inc (NYSE: HBI) United States 3.7
Clorox Co (NYSE: CLX) United States 3.6
Kroger Co (NYSE: KR) United States 3.6
Coty Inc (NYSE: COTY) United States 3.5
Metro Inc (TSX: MRU.TO) Canada 3.5
Estee Lauder Co Inc (NYSE: EL) United States 3.4
Church & Dwight Co, Inc (NYSE: CHD) United States 3.3
CVS Health Corp (NYSE: CVS) United States 3.3
Under Armour, Inc Cl A (NYSE: UAA) United States 3.3
Under Armour, Inc Cl C (NYSE: UA) United States 3.3
VF Corp (NYSE: VFC) United States 3.3
George Weston Ltd (TSX: WN.TO) Canada 3.3
Tapestry Inc (NYSE: TPR) United States 3.2
Avon Products United States 3.1 Source: FTSE Russell
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Including probiotics in skincare routine can help soothe skin, boost glow and combat multiple skin issues such as sensitive, polluted and acne skin. Several established brands as well as independent brands have already launched their probiotics infused skincare line in the market including Clinique, Estee Lauder, TULA, Juice Beauty and Purlisse.
With their popularity in skincare goods, the ingredient is being adopted in topical hair and scalp treatments. The trend is slowly shifting towards haircare and further expansion in the segment is expected in the next few years. There is a growing demand for natural personal care products, increased interest in keeping healthier hair growth and scalp, and the personalization trend moving down from skincare to haircare routines. Aveeno and Tela Beauty Organics are among the hair care brands that incorporated probiotics ingredients in their product ranges.
Clothing Retailers Branching Out to Different Segments
Challenging economic conditions, massive number of rivals and escalating online retailers have been
weighing on clothing brands. Consumers nowadays have many options to select from thousands of brands from many channels. Many retailers in the US faced massive store closures and companies must position themselves in the fast-fashion industry. Local fashion brands tapped into different markets to survive and maintain consumer demand. Over the past few years, there is a growing number of fashion retailers that dived into the profitable beauty market.
Brands are gradually diversifying their products to boost brand awareness due to a stiff competition and uncertainties present in the modern fashion market. It can be a one-stop shop for customers when shopping for clothes and other products such as cosmetics and home goods. This strategy provides enjoyable and convenient shopping experience both online and in physical stores, while adapting to changing market demand.
Some companies go for collaborations and some initiate their own R&D to tap into other markets. Furthermore, the fashion houses can capture customer loyalties along with reaching out to new customers as they are able to offer consumers with variety products, thus, boost sales. American
Emerging Probiotics Skincare
The market has seen a growing presence of skincare products formulated with probiotics over the past few years. Probiotics are live microorganisms or good bacteria that is found in food like yogurt, kefir and kombucha. The products are developed with specific strains of bacteria that have proven skincare benefits from cleanser, moisturizer and mask to serum. The ingredient is originally known to have positive impact on human gut health, and they can improve the skin conditions too. It helps to protect the skin and balance the skin microbiome.
Market Trends & Outlook United States
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Personal Care, Drug and Grocery StoresMarket Trends & Outlook United States
Eagle Outfitters Inc (NYSE: AEO) rolled out its own wellness and personal care line in October 2019. The line is called Mood that joins the budding CBD product trend. Sequential Brands Group (NASDAQ: SQBG) yoga wear and products brands, Gaiam, will also be expanding into bath and personal care goods which is expected to launch in 2020.
Sky-high Drug Prices
Prescription drugs’ (Rx) prices skyrocketed over the years in the US. The complexity of the country’s healthcare system and lack of transparency in the drug supply chain structure create circumstances favorable to reduce competition and price maximization. Moreover, pharmaceutical companies are among the factors in the hiking prices as they want to gain higher profits causing rapid rise in healthcare expenditures. They are increasing prices for brand-name medicines that are already available in the market. As for specialty and generic drugs, new medications entered the market fueled the price improvement.
For example, around 1.25 million Americans of all ages have type 1 diabetes. They depend highly on insulin, but the rapid price increase is leaving diabetic patients with hard choice, according to the American Diabetes Association. Based on a study done by the Health Care Cost Institute, patients with type 1 diabetes annual health care spending per individual escalated nearly half by 48.34% from US$12,467 in 2012 to US$18,494 in 2016. It also stated that the average price all insulin products including brands Lantus, Levemir and Humulin N rose from US$0.13 per unit to US$0.25 between 2012 and 2016.
The Centers for Medicare and Medicaid Service (CMS) reported that the retail prescription drug spending rose by 2.50% to US$335 billion 2018, from US$326.80 billion in 2017 which was faster than the 1.40% growth in 2017. Trump pledged to bring down the cost of prescriptions. Trump’s administration still grapples with ways to reduce prices. Setbacks occurred due to challenges of political conflicts and those in pharmaceutical industry refusing to change. Escalating prices has
caused many Americans to purchase cheaper medications across the border on medications through online or by travel. However, Food and Drug Administration (FDA) has warned consumers to order drugs from borders Mexico and Canada concerning the risk of contaminated or counterfeit products.
The Government, the US Department of Health and Human Services and the US Food and Drug Administration (FDA) addressed a possible importation of certain prescription drugs from Canada in December 2019. This is to provide safe importation of prescription drugs, effective and more affordable drugs for American patients.
Market Outlook
The younger generations will continue to have a huge impact on the personal care industry particularly in skincare in the coming years, thanks to the high accessibility of internet to do some researches on products and online purchases. More new trends are anticipated in the next few years especially in the personal care industry. Influence from international trends will also play a major role in the industry, for instance, Korean skincare which promotes unique skincare steps that will lead to consumers trying out multiple brands and products to include in their routine.
Retailers will continue to face challenges such as health and safety, supply chain and labor force a period of time with the coronavirus outbreak spreads throughout the US. With consumers practicing social distancing this may increase the demand for groceries and other essential goods through e-commerce.
The pharmaceutical industry is poised for continued growth but with an upcoming presidential election the country, attention has been focused on drug pricing. National health spending is estimated to expand at an average of 5.40% for 2019 to 2029 and to reach US$6.20 trillion by 2028, according to the CMS, driven by the escalating medical goods and services prices.
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In the past days, there was a niche market for organic products where consumers would find them available from natural food retailers or farmers market but these days they are being marketed and traded extensively across various channels. The country is included in the ten leading organic food market in the world stage.
Organic food is embraced by various age of consumers and mostly by millennials as they are highly aware of the environmental, health and economic benefits. Millennials and University Graduates topped the weekly organic products buyers in 2017 with 83% and 78% respectively. Based on the Canadian Organic Trade Association’s (COTA) 2017 market report, the estimated total organic market was C$5.40 billion (US$3.85 billion), 54.29% up from C$3.50 billion (US$2.50 billion) in 2012, while the size of organic food and beverage (F&B) market within mainstream sellers totaled C$4.40 billion (US$3.14 billion). Fruits and vegetables remain as the key organic products purchased by consumers in the F&B market.
The Canadian Government announced it is funding a total of C$992,131 (US$707,389.40) to the COTA in June 2019. The contribution is to help strengthen and shape competitiveness in the industry. Additionally, the investment will help to develop local and international market
opportunities for high-quality food products as well as continue to reinforce public confidence and underpin optimistic reputation of local brands on a global level.
Cannabidiol (CBD) Permeated Personal Care Market
CBD is making waves in personal care industry including cosmetics and skincare products. Since cannabis is making its way in Canada in July 2018, attitude towards cannabis changed as consumers are becoming more educated on the benefits of the plant. It is said to be beneficial for people with skin issues such as dry skin, eczema and soothe inflammation. The industry is grabbing the significant market opportunity, gaining a lot of attention since the opening of the regulatory market. There is a potential expansion in CBD market in the next few years.
CBD is known to be a popular ingredient for skin, from acne facial wash to moisturizing hand creams. Canada legalized products extracted from industrial hemp-derived CBD which has less than 0.3% tetrahydrocannabinol (THC). As for topical CBD products including oil, creams and balms, they are used is to relief aches and pains without the presence of any psychoactive effects. The
Demand for Organic Food Grows
The preference for organic food is growing significantly among Canadian consumers due to the exposure to chemicals used in pesticides and fertilizers that can cause harms to human’s health and to the environment.
Market Trends & Outlook Canada
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pain treatments are available medically and sold by licensed seller. Canadian consumers are hungry for healthy products. There is a growing number of companies’ incorporating CBD into their products to cater to their consumers with wide array of skin conditions. For instance, Whole Hemp Health produced natural skincare line made of organic hemp seed oil. MAV Beauty Brands’ (TSX: MAV.TO) Marc Anthony True Professional released hemp-derived hair collection. There is also a wave of personal care products coming from cannabis companies like the Yield Growth Corp’s (CSE: BOSS) subsidiary Urban Juve which launched its own beauty products. The connection between cannabis producer and cosmetics and beauty companies will drive further growth of the market.
Sensory-Friendly Grocery Stores Emerges
The Empire Co Ltd, (TSX: EMP.A) owner of supermarket chains including Sobeys, Foodland, FreshCo, Safeway, Thrifty Foods and IGA kicked off numerous of sensory-friendly grocery stores across the country. This idea of grocery shopping experience was started after a successful pilot at one of Sobeys stores located in Prince Edward Island in 2018 as it worked closely with the Autism Society to comprehend better of people with sensory sensitive.
The innovation received positive feedback from consumers, thus, it spread quickly across the country. The idea of the sensory-friendly is to offer diverse customer base but primarily to lift awareness of people with sensory disability. This initiative will aid consumers diagnosed with autism or other conditions when shopping by removing sensory stimuli that can overwhelm an individual with sensor sensitivities.
During the sensory-friendly shopping hours, the stores’ lights will be dimmed, and any sounds such as music, announcements, machines will be turned off. This will make less stressful and overwhelming experience for the people.
The Empire advances efforts by deploying Sensory-Friendly Shopping hours weekly at over 450 stores across the nation. The firm also plans to add more locations which can influence other retail companies to follow suit in the future. The specialized shopping experiences are to provide calmer, less bright and quieter environment.
Market Outlook
The outlook for Canada personal care, drug and grocery store industry is likely to remain stable over the next few years thanks to various innovations that continue to fuel the industry. Companies continuously incorporate technology and adjusting business strategies to adapt with changing consumer behavior and current trends.
Local young and independent brands are thriving in the beauty and personal care market with their creativity and innovation that are attractive to younger generations. The growing number of startups and foreign companies in the Canadian market will create more collaborations and alliances among companies to fortify competition in the coming years.
Nowadays, consumers show a high interest in healthy lifestyle that will impact the industry especially in personal care and grocery. The rising popularity of Canadian organic food brands including processed products will provide broader selection for consumers in stores and help drive exports. The huge appetite for organic food products will also push the agriculture sector where it will create more opportunities for the organic fertilizer industry.
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Currency Conversion Table
Currency exchange rates as of April 17, 2020
Currency Unit Units per US$ US$ per Unit
US Dollar (US$) 1 1
Canadian Dollar (C$) 1.4026 0.7130
Source: Federal Reserve Bank of New York *Note: Base currency is US$
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The Scope of this Report
This report looks at the consumer personal care, drug and grocery stores industry in the US and Canada. The report examines the current environment as well as global and regional affairs that influence the development of the various industry segments using available data. Key financial results of leading public companies and other major players in the industry are also provided.
Research analysts draw on a range of credible industry and company data sources as well as news and information services to research and analyze the current trading environment, industry landscape and market trends and outlook for a particular sector. Primary sources are used, unless otherwise indicated, and include company data, e.g. annual reports and company financial results; macroeconomic and trade data; data and information from global and country regulatory, industry and trade bodies; government data; and
reports from industry organizations and private research organizations.
Industries covered by the Industry Reports are defined by the Industry Classification Benchmark (ICB) coding system and companies for each industry are identified using the standard industry classification systems and leading companies are identified on this basis. This report involves the following ICB codes: 3767 Personal Products; 5333 Drug Retailers; 5337 Food Retailers & Wholesalers.
Standard Industry Classification codes (SICs) relevant to the industry include: 8059 (Nursing and Personal Care Facilities, not elsewhere classified); 8361 (Residential Care); 5411 (Grocery Stores); 5261 (Retail Nurseries, Lawn and Garden Supply Stores); 5311 (Department Stores); 5122 (Drugs, Drug Proprietaries, and Druggists’ Sundries); and 5912 (Drug stores and Proprietary Stores).
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Key References
United States
US Consumer Product Safety Commission The National agency represents protecting the public from unreasonable risks of injury or death associated with the use of the thousands of types of consumer products under the agency’s jurisdiction. http://www.cpsc.gov
US Department of Commerce (DoC) The department’s mission is to foster, promote, and develop the foreign and domestic commerce of the US; it also provides key information and statistical analysis of the US economy and US industries. http://www.commerce.gov
Census Bureau This US government bureau provides data regarding economy, geography and demography of countries around the world. http://www.census.gov
Bureau of Labor Statistics (BLS) The Bureau of Labor Statistics is the principal fact- finding agency for the Federal Government in the broad field of labor economics and statistics. http://www.stats.bls.gov
Federal Reserve The Federal Reserve is the US central banking system and is responsible for US monetary policy, as well as supervising and regulating banks, maintaining the stability of the financial system and providing financial services to depository institutions, the government, and foreign official institutions. It also conducts research into the economy. http://www.federalreserve.gov
Canada
Government of Canada This is the primary internet portal for information on the Government of Canada, its programs, services, new initiatives and products, and for information about Canada. http://canada.gc.ca/
Statistics Canada Statistics Canada is the national statistics agency that represents the official source of Canadian social and economic statistics. http://www.statcan.ca
Entertainment Software Association of Canada (ESAC) ESAC represents major video game console makers, publishers, large and small independent developers as well as national distributor. It provides important economic, demographic and public opinion data about the Canadian video game industry. http://theesa.ca
GDSourcing GDSourcing (Government Data Sourcing) is a government-run research and retrieval company that specializes in helping researchers to access statistics collected by the Canadian Federal Government as well as other non-government organizations and agencies. http://www.gdsourcing.ca/works/Retail.htm
Trade and Economic Analysis Division (EET) The Canadian Trade and Economic Analysis Division was established in September 1996 with a mandate to provide economic research, analysis, and policy advice to assist the formulation and implementation of Canada’s international trade and foreign policies. http://www.dfait-maeci.gc.ca/eet/menu-en.asp
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Comparative Company Data United States
Company Name Country Code Ticker Exchange Primary SIC Other SICs
Walmart Inc USA WMT NYSE 5411 5311 5331 5399
CVS Health Corp USA CVS NYSE 5912
Walgreens Boots Alliance Inc USA WBA NMS 5912 6719
Procter & Gamble Co (The) USA PG NYSE 2841 2676 2844 2834
Kimberly-Clark Corp. USA KMB NYSE 2679 2676
Reckitt Benckiser Group Plc USA RBGPF OTCBB 2844 2841 2842 2035
Colgate-Palmolive Co USA CL NYSE 2844 2841 2047 2843
Lauder (Estee) Cos, Inc. (The) USA EL NYSE 2844 5122 5999
Coty, Inc. USA COTY NYSE 7231 5087
Beiersdorf AG USA BDRFY OTCBB 2834 2844 2899
Church & Dwight Co Inc USA CHD NYSE 2841 2842 2844 2812 2819
Lululemon Athletica Inc USA LULU NMS 2389 5621 5611 3949
NU Skin Enterprises, Inc. USA NUS NYSE 5122 2833
Edgewell Personal Care Co USA EPC NYSE 2844 2676
Company Name Total Revenue - FYE - 1 Total Revenue - FYE - 2 Total Revenue - FYE - 3 EBITDA - FYE - 1 EBITDA - FYE - 2 EBITDA - FYE - 3
Walmart Inc 514,405,000,000 500,343,000,000 485,873,000,000 24,267,000,000 27,830,000,000 32,844,000,000
CVS Health Corp 256,776,000,000 194,579,000,000 184,786,000,000 16,403,000,000 6,743,000,000 11,809,000,000
Walgreens Boots Alliance Inc 136,866,000,000 131,537,000,000 118,214,000,000 7,269,000,000 8,361,000,000 7,200,000,000
Procter & Gamble Co (The) 67,684,000,000 66,832,000,000 65,058,000,000 9,182,000,000 16,419,000,000 16,371,000,000
Kimberly-Clark Corp. 18,450,000,000 18,486,000,000 18,348,000,000 3,817,000,000 2,948,000,000 4,023,000,000
Reckitt Benckiser Group Plc 16,083,358,429 15,464,047,590 7,706,432,808 4,272,042,336 3,933,208,715 1,979,447,668
Colgate-Palmolive Co 15,693,000,000 15,544,000,000 15,454,000,000 3,965,000,000 4,118,000,000 4,064,000,000
Lauder (Estee) Cos, Inc. (The) 14,863,000,000 13,683,000,000 11,824,000,000 2,939,000,000 2,583,000,000 2,156,000,000
Coty, Inc. 8,648,500,000 9,398,000,000 7,650,300,000 -2,766,400,000 849,500,000 115,700,000
Beiersdorf AG 8,473,298,870 8,647,813,098 6,556,596,674 1,359,346,636 1,372,573,606 1,100,500,554
Church & Dwight Co Inc 4,357,700,000 4,145,900,000 3,776,200,000 1,023,700,000 940,000,000 870,700,000
Lululemon Athletica Inc 3,288,319,000 2,649,181,000 2,344,392,000 837,734,000 568,233,000 510,426,000
NU Skin Enterprises, Inc. 2,420,416,000 2,679,008,000 2,279,099,000 331,822,000 302,669,000 337,131,000
Edgewell Personal Care Co 2,141,000,000 2,234,400,000 2,298,400,000 -296,500,000 261,400,000 41,500,000
Company Name Net Income - FYE - 1 Net Income - FYE - 2 Net Income - FYE - 3 EPS - FYE - 1 EPS - FYE - 2 EPS - FYE - 3
Walmart Inc 6,670,000,000 9,862,000,000 13,643,000,000 2.2800 3.2900 4.4000
CVS Health Corp 6,634,000,000 -594,000,000 6,622,000,000 5.1000 -0.5700 6.4700
Walgreens Boots Alliance Inc 3,982,000,000 5,024,000,000 4,078,000,000 4.3200 5.0700 3.8000
Procter & Gamble Co (The) 3,897,000,000 9,750,000,000 15,326,000,000 1.4500 3.7500 5.8000
Kimberly-Clark Corp. 2,157,000,000 1,410,000,000 2,278,000,000 6.2800 4.0500 6.4400
Reckitt Benckiser Group Plc 2,784,615,760 8,359,419,210 1,492,511,670 3.9069 11.8726 2.1136
Colgate-Palmolive Co 2,367,000,000 2,400,000,000 2,024,000,000 2.7600 2.7600 2.3000
Lauder (Estee) Cos, Inc. (The) 1,785,000,000 1,108,000,000 1,249,000,000 4.9100 3.0100 3.4000
Coty, Inc. -3,784,200,000 -168,800,000 -422,200,000 -5.0400 -0.2300 -0.6600
Beiersdorf AG 853,170,382 825,941,672 688,523,152 3.6761 3.5483 2.9643
Church & Dwight Co Inc 615,900,000 568,600,000 743,400,000 2.5000 2.3200 2.9700
Lululemon Athletica Inc 483,801,000 258,662,000 303,381,000 3.6300 1.9000 2.2100
NU Skin Enterprises, Inc. 173,553,000 121,887,000 129,437,000 3.1300 2.2100 2.4500
Edgewell Personal Care Co -372,200,000 103,300,000 5,700,000 -6.8800 1.9000 0.1000
Company Name Total Current Assets - FYE - 1 Total Current Assets - FYE - 2 Total Current Assets - FYE - 3 Long-Term Debt - FYE - 1 Long-Term Debt - FYE - 2 Long-Term Debt - FYE - 3
Walmart Inc 61,897,000,000 59,664,000,000 57,689,000,000 50,203,000,000 36,825,000,000 42,018,000,000
CVS Health Corp 50,302,000,000 45,243,000,000 31,229,000,000 64,699,000,000 71,444,000,000 22,181,000,000
Walgreens Boots Alliance Inc 18,700,000,000 17,846,000,000 19,753,000,000 11,098,000,000 12,431,000,000 12,684,000,000
Procter & Gamble Co (The) 22,473,000,000 23,320,000,000 26,494,000,000 20,395,000,000 20,863,000,000 18,038,000,000
Kimberly-Clark Corp. 5,057,000,000 5,041,000,000 5,211,000,000 6,213,000,000 6,247,000,000 6,472,000,000
Reckitt Benckiser Group Plc 6,322,520,516 7,326,141,508 2,804,556,244 12,346,278,956 15,553,193,117 653,583,542
Colgate-Palmolive Co 4,179,000,000 3,793,000,000 4,639,000,000 7,333,000,000 6,354,000,000 6,566,000,000
Lauder (Estee) Cos, Inc. (The) 7,212,000,000 6,168,000,000 4,964,000,000 2,896,000,000 3,361,000,000 3,383,000,000
Coty, Inc. 3,272,700,000 3,651,000,000 3,581,500,000 7,469,900,000 7,305,400,000 6,928,300,000
Beiersdorf AG 5,233,541,808 5,129,469,399 4,049,690,507 8,016,366 4,795,017 947,074
Church & Dwight Co Inc 956,400,000 1,078,200,000 1,000,200,000 1,810,200,000 1,508,800,000 2,103,400,000
Lululemon Athletica Inc 1,429,282,000 1,436,282,000 1,162,737,000 0 0 0
NU Skin Enterprises, Inc. 740,166,000 799,237,000 777,789,000 334,461,000 361,008,000 310,790,000
Edgewell Personal Care Co 1,044,400,000 951,200,000 1,186,200,000 1,097,800,000 1,103,800,000 1,525,400,000
26Mergent by FTSE Russell
Personal Care, Drug and Grocery Stores
Notes to Comparative Data All figures are in United States dollars. All figures are as reported by the company. N/A = Data Not Available. N/L = Not Listed Companies ranked by total revenue for the full year most recently reported.
Definitions Total Revenue = All revenues, including net sales, operating revenues, interest income, royalties, excise taxes etc. EBITDA = Earnings before interest, taxes, depreciation and amortization. EPS Cont Operations = Earnings Per Share as reported by company excluding extraordinary items. Total Current Assets = All assets expected to be realized within the next year, includes cash, accounts receivable and inventories. Long Term Debt = Debt due to be paid at a date more than one year in the future. Return on Equity = The company’s earnings divided by its equity (book value). Profit Margin = The company’s net income as a percent of revenues.
Company Name Return on Equity (Most Recent Yr) Profit Margin (Most Recent Yr) Date FYE - 1 Date FYE - 2 Date FYE - 3
Walmart Inc 9.2005 1.2966 31-Jan-19 31-Jan-18 31-Jan-17
CVS Health Corp 10.3877 2.5836 31-Dec-19 31-Dec-18 31-Dec-17
Walgreens Boots Alliance Inc 16.9360 2.9094 31-Aug-19 31-Aug-18 31-Aug-17
Procter & Gamble Co (The) 8.2574 5.7576 30-Jun-19 30-Jun-18 30-Jun-17
Kimberly-Clark Corp. -53925.0000 11.6911 31-Dec-19 31-Dec-18 31-Dec-17
Reckitt Benckiser Group Plc 14.7945 17.3136 31-Dec-18 31-Dec-17 31-Dec-16
Colgate-Palmolive Co 2023.0769 15.0832 31-Dec-19 31-Dec-18 31-Dec-17
Lauder (Estee) Cos, Inc. (The) 40.6977 12.0097 30-Jun-19 30-Jun-18 30-Jun-17
Coty, Inc. -82.5002 -43.7556 30-Jun-19 30-Jun-18 30-Jun-17
Beiersdorf AG 13.2492 10.0689 31-Dec-18 31-Dec-17 31-Dec-16
Church & Dwight Co Inc 23.0864 14.1336 31-Dec-19 31-Dec-18 31-Dec-17
Lululemon Athletica Inc 33.4585 14.7127 03-Feb-19 28-Jan-18 29-Jan-17
NU Skin Enterprises, Inc. 19.8281 7.1704 31-Dec-19 31-Dec-18 31-Dec-17
Edgewell Personal Care Co -28.5539 -17.3844 30-Sep-19 30-Sep-18 30-Sep-17
Comparative Company Data United States
27Mergent by FTSE Russell
Personal Care, Drug and Grocery Stores
Comparative Company Data Canada
Company Country Code Ticker Exchange Primary SIC Other SICs
Alimentation Couche-Tard Inc CAN ATD.B TSX 5399
George Weston Ltd CAN WN TSX 2051 2099 2024 5143 6719
Loblaw Companies Ltd CAN L TSX 5399 2038 5411 6159
Metro Inc CAN MRU TSX 5141 5122 2099
Domtar Corp CAN UFS TSX 2621 2611 2631 2653
Cascades Inc CAN CAS TSX 2631 2611 2671 2675 2674 2672
North West Co Inc CAN NWC TSX 6722 5411 5651 5945 5021 7359
HLS Therapeutics Inc CAN HLS TSX 3714
Crescita Therapeutics Inc CAN CTX TSX 5912 2834 8071
Westbond Enterprises Corp CAN WBE TVX 2621 2675
EGF Theramed Health Corp CAN TMED CSE 2844
KP Tissue Inc CAN KPT TSX 2611 2676
Company Total Revenue - FYE - 1 Total Revenue - FYE - 2 Total Revenue - FYE - 3 EBITDA - FYE - 1 EBITDA - FYE - 2 EBITDA - FYE - 3
Alimentation Couche-Tard Inc 59,117,600,000 51,394,400,000 37,904,500,000 3,515,800,000 2,861,400,000 2,339,500,000
George Weston Ltd 38,480,608,198 35,664,954,018 60,536,325,468 2,743,074,747 2,484,239,405 5,346,713,084
Loblaw Companies Ltd 34,288,084,706 37,161,813,599 62,510,934,436 2,448,257,221 2,886,029,184 4,688,488,539
Metro Inc 12,664,482,669 11,052,340,756 16,376,966,812 1,024,046,135 1,811,217,959 1,199,624,348
Domtar Corp 5,220,000,000 5,455,000,000 5,148,000,000 433,000,000 712,000,000 4,000,000
Cascades Inc 3,413,901,565 3,446,802,682 5,391,963,968 335,588,947 558,380,439 575,448,292
North West Co Inc 1,533,068,750 1,615,534,540 2,415,347,126 144,165,808 138,043,622 218,074,938
HLS Therapeutics Inc 61,415,000 75,082,000 5,391 20,346,000 54,300,000 -1,882,673
Crescita Therapeutics Inc 12,210,444 9,583,404 4,722,180 1,680,148 -7,769,465 -19,562,547
Westbond Enterprises Corp 8,467,800 7,629,610 11,970,033 1,051,121 1,036,508 1,542,869
EGF Theramed Health Corp 0 0 0 -10,995,814 -706,302 -34,671,433
KP Tissue Inc 0 0 0 143,929 151,560 257,402
Company Net Income - FYE - 1 Net Income - FYE - 2 Net Income - FYE - 3 EPS - FYE - 1 EPS - FYE - 2 EPS - FYE - 3
Alimentation Couche-Tard Inc 1,821,300,000 1,677,500,000 1,208,900,000 1.6200 1.4800 1.0600
George Weston Ltd 632,013,023 732,861,640 1,992,011,041 0.9906 2.9520 7.0830
Loblaw Companies Ltd 587,464,240 1,229,234,652 1,334,177,538 1.4687 3.0472 3.2344
Metro Inc 539,392,877 1,320,511,672 756,244,382 2.1065 5.5325 3.2194
Domtar Corp 84,000,000 283,000,000 -258,000,000 1.3700 4.5000 -4.1100
Cascades Inc 69,027,048 416,392,270 184,628,609 0.4553 4.2676 1.9137
North West Co Inc 69,007,228 56,716,019 100,952,227 1.3553 1.1231 2.0825
HLS Therapeutics Inc -24,806,000 -6,097,000 -1,584,841 -0.9200 -0.2400 -0.1213
Crescita Therapeutics Inc 1,759,455 -9,143,879 -22,753,791 0.0881 -0.6541 -1.8598
Westbond Enterprises Corp 313,925 231,386 214,969 0.0075 0.0078 0.0133
EGF Theramed Health Corp -10,996,850 -706,762 -47,930,562 -14.3387 -2.9066 -522.9549
KP Tissue Inc -127,039 -4,340,211 -2,320,660 -0.0147 -0.4706 -0.2561
Company Total Current Assets - FYE - 1 Total Current Assets - FYE - 2 Total Current Assets - FYE - 3 Long-Term Debt - FYE - 1 Long-Term Debt - FYE - 2 Long-Term Debt - FYE - 3
Alimentation Couche-Tard Inc 4,321,300,000 4,477,100,000 3,172,900,000 5,640,700,000 8,862,200,000 3,101,700,000
George Weston Ltd 9,741,294,278 8,705,485,708 15,623,935,561 9,762,028,606 10,262,265,945 13,109,162,655
Loblaw Companies Ltd 8,545,401,703 9,035,393,192 13,751,462,218 4,684,292,985 7,611,523,072 14,109,938,203
Metro Inc 1,576,727,526 1,472,887,270 1,685,887,994 1,682,960,138 2,021,224,267 1,791,916,340
Domtar Corp 1,518,000,000 1,589,000,000 1,657,000,000 938,000,000 853,000,000 1,129,000,000
Cascades Inc 1,029,531,081 1,005,084,790 1,429,860,977 1,337,215,477 1,210,090,180 2,061,910,740
North West Co Inc 286,917,696 272,632,572 429,525,033 278,563,612 255,172,851 300,286,902
HLS Therapeutics Inc 31,618,000 65,036,000 46,192,191 91,707,000 136,706,000 0
Crescita Therapeutics Inc 12,257,441 9,703,854 32,845,025 2,095,044 2,532,654 10,027,894
Westbond Enterprises Corp 2,302,279 1,993,524 2,992,968 1,818,631 2,448,824 5,163,415
EGF Theramed Health Corp 1,150,401 506,188 55,010 0 0 0
KP Tissue Inc 1,610,386 1,981,453 2,778,863 0 0 0
28Mergent by FTSE Russell
Personal Care, Drug and Grocery Stores
Company Return on Equity (Most Recent Yr) Profit Margin (Most Recent Yr) Date FYE - 1 Date FYE - 2 Date FYE - 3
Alimentation Couche-Tard Inc 20.4108 3.0808 28-Apr-19 29-Apr-18 30-Apr-17
George Weston Ltd 10.8161 1.6424 31-Dec-19 31-Dec-18 31-Dec-17
Loblaw Companies Ltd 6.6012 1.7133 29-Dec-18 30-Dec-17 31-Dec-16
Metro Inc 11.9962 4.2591 28-Sep-19 29-Sep-18 30-Sep-17
Domtar Corp 3.5354 1.6092 31-Dec-19 31-Dec-18 31-Dec-17
Cascades Inc 6.2334 2.0219 31-Dec-18 31-Dec-17 31-Dec-16
North West Co Inc 22.1847 4.5012 31-Jan-19 31-Jan-18 31-Jan-17
HLS Therapeutics Inc -15.6516 -40.3908 31-Dec-18 31-Dec-17 31-Dec-16
Crescita Therapeutics Inc 12.6059 14.4094 31-Dec-18 31-Dec-17 31-Dec-16
Westbond Enterprises Corp 7.8724 3.7073 31-Mar-19 31-Mar-18 31-Mar-17
EGF Theramed Health Corp -2659.8158 30-Jun-19 30-Jun-18 30-Jun-17
KP Tissue Inc -0.1752 31-Dec-18 31-Dec-17 31-Dec-16
Notes to Comparative Data All figures are in United States dollars. All figures are as reported by the company. N/A = Data Not Available. N/L = Not Listed Companies ranked by total revenue for the full year most recently reported.
Definitions Total Revenue = All revenues, including net sales, operating revenues, interest income, royalties, excise taxes etc. EBITDA = Earnings before interest, taxes, depreciation and amortization. EPS Cont Operations = Earnings Per Share as reported by company excluding extraordinary items. Total Current Assets = All assets expected to be realized within the next year, includes cash, accounts receivable and inventories. Long Term Debt = Debt due to be paid at a date more than one year in the future. Return on Equity = The company’s earnings divided by its equity (book value). Profit Margin = The company’s net income as a percent of revenues.
Comparative Company Data Canada
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