Loblaw Companies Limited (L) Earnings Call Transcript & Summary

I got up this morning and Heathrow closed yesterday. We're going to lose a couple of people because of that. Oil is back up above $100, so somebody might be stuck in the office. Going to rain a little bit. It's okay, we can deal with that. But get here this morning, still have the butterflies, but glad to see you guys make it out today, so thank you very much. And I look around the room here, and I've been working with you guys for -- many of you for over 10 years now. And it's almost like it's about time we've done that. Like you've met my folks before in conferences and meetings, but you haven't met my family before. So that's why I'm 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. So welcome and spend -- we got some great breaks lined up, some great food, some socializing. So dive in, get to know the family and sit back and enjoy the day. So we're welcoming people online right now. So again, I'm going to thank you for joining us for the day today. And thank you for investing your time with Loblaw. I'm going to start with a quick land acknowledgment. So 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 Georgia Island Land Nation, East Gwillimbury's closest First Nation community, and their enduring relationship with the lands and waters of this territory. We're 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. So let's get the day started. We've sort of -- you guys -- we've lined the agenda. A little bit of a format. It's not totally clean. But Retail and Beyond the theme of today. So we're 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're going to spend the rest of the day focusing on what we do differently, our differentiators from our peers. We call that enhanced retail, and then we're also going to dive into some of our unique growth drivers, and we've got some folks up here who will spend some time giving you a little bit of a deeper dive on what's planned and how to think about those businesses over the next 5 years. I'll 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've got a couple of breaks organized in there, so a chance to mingle. There's food in the lobby. When we cut for lunch, we'll be going a short hop across the parking lot, if you're into self-driving vehicles and big trucks, there's 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. And lunch, as I'm sure you all expect, is going to be amazing. We're doing kind of an eat together format with the executive team, so pull up a seat and enjoy that time. Washroom's 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. And last piece, we're going to save the Q&A until the end of the day, so I encourage you guys to stick around. So we'll manage that at the end of the day, Richard and Per will come up, they'll sort of emcee the Q&A, and the management team will be here as well to also participate in. And 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, it's like, for me, it's amazing. It's just outstanding what Rob Weibe and his team have done. And 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 have been on the tour this morning, you enjoyed it. And then there's another one this afternoon if you want to go again, that is allowed. Anyway, I thought I will give a little bit background on myself. I have met most of you. And the same with my colleagues later because today it's all about getting to know us as a team and to get to know our team and the 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 started engineering, started to work in an engineering company for 6 years. I worked in many countries. I worked in the U.S., I worked in Hungary. I worked in England. And I worked, of course, many markets in retail, whether it's Sweden, Norway, Denmark, Poland, Germany and Hungary and now Canada. And 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 carrier in 2001 after -- before that, I worked for Mars. I became a CEO when I was 35, then I moved to Tesco, was CEO of Tesco Hungary. There's mostly hypermarkets. So like the real Canadian superstores, that size more than 100,000 square feet, a lot of great learning for me Tesco's operating models, was promoted to be part of the Tesco executive team being responsible for the nonfood and apparel. Then it's back home in Denmark working for selling group, also very similar with like my family ownership. That company was founded in 1906. And the first 94 years, it was first 1 for 47 years by the founder, and then not for year, 47 years by the founder son. So when I started in 2012, I was only the fourth CEO. So that's really, really consistency. And when I quit Trust me, the founders son's Vito was not happy because only having been there for 11 years, that was not good enough. But anyway, I couldn't resist coming to Loblaws because coming over here, talking to Galen, talking to the Board members, there was 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 3 years ago, it was like 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 or when I have old colleagues who were 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. But still, of course, there's a lot that we can learn from others, and I think we will talk more about that later today. But going for this job was a dream for me at this time of my career. Then I had some Board experience, not to drill on that. I've been a part of the Danish Central Bank, Pandora and currently at [indiscernible], just to get some more learnings, to get some more input. And then I also brought some guiding leadership into it. I may be very down to earth because that's how I see myself, that's how I do business. The first one is here 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 again the good news is we won't be able to become better. So I think that's important. And then 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 to do that or not. So better, simpler, cheaper. And 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 where it 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 wish to -- we did it for 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 customer, they didn't appreciate that there was no offers because they actually did not know the prices of the single product. So we closed them again, but we tried it. But now what Melanie Singh, who is the President of Hardison, he will talk to you about later that we took some learnings for 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, 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. And then bringing proven ideas to Canada. I'll come back to that. And then how -- I think is important how we work. It's a third strategy. It's third tactic and it fit ratio because like when I meet a lot of young students applying for jobs, I just want to work with strategy. I said, yes, that's fine. But I don't even spend my full time and state. It might be 1/3 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, everyday at lunch, I just pick random tables lunch and sit down and ask questions with my colleagues sometimes, my teams on my team say, okay, where do you get that information? Yes, no, it's all at lunch, and I get so much great insight at one. But it's -- I think it's being it's being out there, listening to -- also listening to customers. So I would say I'm still spending one day a week with customers. and then work hard and have one. And I think you will notice that we have a lot of on our team because we are spending so much time at work. It's kind of -- it's my hobby as well. And if you don't have fun, it's not worth it. So this, having for on, having a lot of jokes, they're starting to get used to the Danish at least politely enough to last some time. So that's good enough. That's good enough for me. And then I spent my first time really interviewing a lot of customers. I still do that. And as I said before, you are coming back with some ideas. One idea, one irritant for customer was when I visited customers in the hard discount they hated the multi-buys. So multi-buys been like if you buy one ketchup for $5, then you can buy two for $8. It's feeling like you're being forced to buy more than one. And if you're on a tight budget and you only have $50 to spend, you don't want to be forced to buy two ketchup. You get really annoyed about it. And 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 there was a big, 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 it, they're really, really happy about it. We have -- we still have it in the other parts of our business because they're driving a little bit of sales. but it does not belong in hard. That's just one example from customers. Then last week, you see that, that picture with a thousand of new Loblaw products. That was -- I visited see us in Cambridge nearby Toronto, where we are testing lowering more than 3,000 prices. Again, talked to customers, lowered 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 really, really a 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 part of the Danish -- member of the Danish Parliament. Now she didn't run again, now she's here. My oldest son, he's 27, he moved here. He got his 3 years to work visa last Sunday and his fiancee here. My youngest is coming in January, so it will be all six of us. They're starting off to live with us. Let's see how that goes. Probably it 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. Yes, I think that's enough about that. Then I'm pleased that we have continued the strong track record because when I came, there a lot strong results before me, and thank you to Galan and the team who have done that because they have secured a really easy runway for us from '23, so our job was, how could we then continue to growth? How could we take it to the next level? So here's just some of the ideas that some of you have heard about before. The first one, which is important is like how could we expand hard discount. And how can we expand hard discount by building more small stores. Remember, the stores that we are building are small, so we can take the one at Richmond Street. It's sales service is about 7,000, 8,000 square feet. So one of Frank's big real Canadian superstores, you can fit 12 of those -- 13, 14 of those small stores into a big Canadian superstores. So small stores, but they work. And 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 stores. You don't get tender to buy up in the range. You buy what's on your shopping list. So you can control your budget, where if you go into a big hypermarket, you get tender and you buy all sorts of apparel and nonfood, we would like customers to do that when they go into big stores. But that's how we can control you about it. Plus a lot of convenience. It's fast. I love to spend an hour in a growth 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. Then value does not only come in hard discount. It also comes in the rest of our portfolio. And a way to show value is one other mechanic that we call hit of the month. Remember, we deployed that 3 years ago. It's using our purchasing power to buy cheap and we buy kind of three products for 2,400 stores, and we have that available for a month, so 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. So that's one way to show value. Another way in our supermarkets in Loblaw or Sears 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 spent -- in 180 superstore, we spent 35% of the space but only around 15% of sales. And it's actually margin enhancing, so 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. And in the corner, we have the great toy section and toys is up plus 30%. Then in Shoppers, Gregers will come back to talking to you about how he's thinking about reinventing the Shoppers, and that's really, really exciting. We have started a little bit. We have done some food reline. We have six stores now where we have added more food products and adding them to 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, and remember, we have 1,400 stores, so a lot to come. And again, sometimes, we go, and it doesn't work as we thought, then we adjust and then we move on. We are very persistent in getting to our priorities. AMS is another idea, how can we source together with European retailers. We're sourcing together with Ardal Hayes, my old company, ICA, a British retailer because 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 are 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, and if we add the new stores and the comp sales, it will be around 4%, sometimes it will be a little bit less, sometimes a little bit more. But if we 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 into one of our competitors, so we need to be on our toes every day. We need to earn the trust for our customers. Canada is actually a quite a rational market. We have five players. Five players is maybe 80% of the market. I've been working in other markets where two players would have 80%, not five. So it is a good rational market, plus there will be another 20% out there, which consists of 10,000 grocers. So I think it's a good resident 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. And again, for me, with my background, it's actually not a lot. And also remember, about half of that is Shoppers Drug Mart, and then we have CNT 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 source, Maxis and No Frills. In 2023, our hard discount TAM 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%. So if we 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 will hear more about it later. We know how to drive our core business. And then we have the beyond. The beyond kind of the title of today, we're doing much, much more than that. And I think Lauren is coming up next after me, and 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 3 years, so we're getting better and better to use our customer data. So that's kind of the enhanced retail. It's Connected Health care, I will get back to that. It's a 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. Then the growth businesses, I'll get back to that later. Adding that all together, I think that's a really good enabler to force to continue to be confident in delivering what we are promising. And then before we go into the Pacific, 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. And then we are now growing 4%, but if you just grew 3%, we're growing by $2 billion. And the others are quite smaller than us, so us growing with 3%, we will still grow a lot more than the rest, and thereby also taking share. And then we are Canada's largest the retailer of mass and prestige cosmetics, really, really important for us. And then we are a health care partner for more than 20% of Canadians. Our business as a whole is quite easy to describe. If we take shoppers, it's about 30 -- it's about 1/3 of our sales, supermarket, it's 1/3 of our sales, and hard discount is 1/3 of our sales. And within the supermarket, half is hypermarket and half is conventional. So I think we are having a really balanced portfolio to serve the needs of Canadians. So if you want high quality, you go to a Loblaw's, you go to a Fortinos, if you're a big family, you want value for money, you go to Frank's, your 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. And every part of our business is growing at the moment. Then we have a unique ecosystem, which gives us an unmatched relationships with our customers. Again, we have #1 loyalty program in Canada, and we keep developing it. Then 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 dependent in Canada will just be above 4%. So still room to grow. I don't think it will become above 10%, but if it will just double, then we are very, very, very well positioned to take our part of that growth. E-commerce and Shoppers, we are next to nothing. So that's actually quite good because that's a huge opportunity to get into that area. And Gregers has just hired a specialist within e-commerce, who's working in Lawrence team. working with showers 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 servers around the country. So that's an area that hopefully will give us some growth in the future. Then our beyond, so these businesses it's about $400 million in profit now and growing. It's growing faster than core retail and it's margin accretive. We will have Rob Weibe talking about supply chain Lauren about Retail Media, Sonya about LifeMark, Tina about TNT. And then Richard, he will touch on EQB, so look forward to these presentations, you'll get some insights that you normally don't get. Then we are industry leading in AI. That's probably where I, over the last year have been most impacted. Some of the things that we can do is transforming the way we work. Take Robin. It's 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. And the machine, they will come out, they'll say, okay, in this store, this many can do it for all his stores or someone can do it and then we say, okay, from Monday to Wednesday, you had more waste than normal. And then they will come with a solution. You did not reduce or clear in due time or you bought too much. So not only will it point out the problem, it would also suggest a solution. Normally, it will be completely impossible to dig into all the reasons. So we can get information much, 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's so difficult. So how do you manage the district managers? They have their own hobby horses. They know what to do. But now you have a tool and they have a tool, they can plan their week. They can see what stores have what challenges. So this is outstanding. Most importantly, of course, all our colleagues. I am impressed about the value that we have in our business. Trust me, it is a people-first business. And one thing is to go into maybe at Leaf Garden at Carlston Street in Toronto. Another thing is to go to our local superstores in Moncton. When you go there, it's 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 who have worked for us for 10 years, 20 years up to 50 years. You just feel so welcome. And if you are a bored and a little bit stressed working the head office, you just need to take your car, go somewhere, leave the store and then you get back in good mood again. That's at least how I do it. Finishing on a note on our team here, we have, in my mind, an extraordinary team. It's very diverse. You will see today that we probably have -- or we have more female presenters than men and the insight that our team is bringing is extraordinary. Just take one of the examples. Sonya Lockyer who is leading our strategy. She's German, worked for Amazon, worked for BCD and have now had our heading up strategy for the past 3 years. Frank Gambioli, 41 years in the business. Tina, literally born into the TNT business. You cannot avoid being excited when you listen to her. Mary like tons of experience in marketing, a lifetime almost at Loblaw, the same with David Markel. I haven't seen anyone running IT and system as he does Panni Peirce coming with experience from Australia, latest Singapore. So we have a very diverse team, bringing a lot of new ideas and I think that's what makes my job so fun that I work with an extraordinary team. So this is the team, but outside this team, we have three more of our executives who are presenting. We have Tonya on GLP-1, 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. And 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. Thanks, Per. Where'd he go? There he is, of course, he's sitting but he's usually the tallest man in the room. 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 he 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 #9 on the Loblaw Digital team. So it's -- I think at the time our ambition was, let's see if we can do e-commerce well. We had $0 in e-commerce, we're now exceeding $4.5 billion in sales. That's 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 so as a kid going to the office -- he was a hard worker like me, he was in the office on Saturdays, and I used to get access to the -- first access to the best toys in the '80s, which was a great time for toys, toy heyday, if you will. And I am so glad. I'd 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 '90ss. 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 have -- we are a technology-driven organization. We always have, and we have been one for a very long time. And actually, AI, in particular, also not new to Loblaw. We've 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's new is, I think we can all agree this moment that we're in now, the rapid evolution of generative and agentic AI. I'm sure you're 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. And because we have spent years, David, in particular, spent years building this incredible scalable infrastructure, 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're using it to fundamentally change how customers experience our business, how they discover, how they shop, how they access services, and we're 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'm going to share and driving meaningful results. And I'm going to show you both sides of that equation, we're going to start with customers. Now for customers, we believe conversation is going to be the most common way that they will engage with us. That's why we're 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 exploration, new diet exploration. The reality is when people are engaging with these platforms, they're 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 got to go to your store and walk your eyes 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 deadends. We said, how do we actually take that static list, that answer, and turn it into a live interactive experience. And so 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 on our websites to transact. And 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. Customers -- 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. And 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? And we're looking at all the other AI platforms as well, right? We're -- 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. And we're just as excited about -- of course, we want to win on third-party experiences. It's where a tremendous growth is happening. But 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. And you might say, "Well, how could you do that? You're Loblaw, they're some big AI company." But 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're 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. But I think of this idea of answer and action. And of course, we're going to be good at the action side of that. We're a retailer. We've got that real world retail connectivity. But perhaps nowhere is that answer an action more powerful than in health, right? Because when someone asks a health question, the best outcome isn't really an answer, it's actually care. And Canadians have been going online with health questions for decades, right? We all know Dr. Google. And increasingly, they are taking those questions to AI engines. But the vast majority of you actually ask them -- and you look at the numbers, the vast majority do not trust the information that they're getting. What people actually want, what Canadians actually want is an answer that they can trust, grounded in the health care system that they live in, the Canadian health care system, and they want help figuring out what to do next. And that's why we have built and launched PC chat. This is 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's hyperpersonalized because it's connected to your health profiles. It is informed by thousands of Canadian health care sources. We've trained these models on thousands and thousands of specifically Canadian health care sources. And we 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, though, right? We are creating an intelligent front door to health care, one that understands what someone needs and increasingly can help them get the care that they're looking for, especially because we have the significant physical and digital health care 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 health care network to fulfill that care on the other side. So 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. I mean, 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. So that's a little bit about the customer side, but 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 built 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, where 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. And at Loblaw, of course, we have so many of those. But 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, 3 million cost out on that application. I think we built it in 4 weeks with the real estate team. Vendor invoice optimization for finance. So this is through our EDI system, identifying errors in the process, flagging them, anticipating them, resolving them AI, $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, pushback on unjustified ones, be able to anticipate that, $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. And 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 and because of that system, we're seeing upwards of a 10x productivity gains from our engineering team. Now 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. So this flywheel is pretty remarkable. So AI is being embedded in to have thousands of people, thousands of our employees are working and driving meaningful gains in many different ways. And so 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. And so 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. And that's what we call vertical operating systems, 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 a point -- 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. So the whole operation can run differently, right? And in the case of AI vertical operating systems, autonomously, and that's where we're heading. So I'm going to give you three examples 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 market. Every day, thousands of decisions are made to keep products flowing through our network and on to our store shelves. I mean you see it here, you see how complicated it is. Transport AI is our AI operating system for that work. So today, we actually focus when it comes to AI and supply chain on two specific areas: replenishment and transportation. Now on 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, in boxes, reports. They identify a shortage. Then they have to figure out what caused that shortage, then they have to identify the downstream impact. They've got to contact the vendor. They've got to determine what to do next, and then that's got to set a whole bunch of things in motion. Now AI can do that work proactively, right? AI can identify that a product isn't going to arrive through a number of different signals. It can recognize that a promo was associated with that product that's now going to be shorted. And that promo might be planned weeks later, but it knows that. It's going to flag the issue early enough so that the teams can actually source a new product or maybe even change that promo. And if orders are at risk of a delay, it can actually contact the vendors and begin resolving the issue itself. That's actually the first AI application that we built, communicating with vendors through generative AI, reading in boxes, identifying sentiment, responding to that e-mail 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, okay? To date, we've actually automated 70% of a replenishment analyst's manual work, actually, 70% of their entire workload. And we've also driven a 13 basis point improvement in on-shelf availability because of that anticipation. And that's massive gains. I know Rob is going to talk about it, and he's 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. And today, we can only use that return trip to pick up orders or pick up product from a vendor if there's a PO created, if we've already forecasted that demand and a purchase order exists. Now AI actually connects those signals, it anticipates the near-term demand, and it will pull the order forward. It's going to create that PO, it's 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's an eight-figure cost-saving opportunity. Rob thinks it's more. We're going with eight figures for now, but we're already seeing it. It's 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. So that's transport AI. Next is merch 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, right? We've 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've got an AI space planning tool. Mel's team uses this really, really effectively, particularly because they're 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, right? So imagine, a dairy merchant is short on their sales plan on milk. Now 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, and they've got to model the economics and then they've got to coordinate all of that execution. Merch AI, a merchant can simply ask, I'm 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. Then it can determine which products fall within that vendor and that category, then it can check for conflicts with existing promotions, then it can model economics. And then 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. And the Merch OS can then execute that plan back into the systems that run the business, the same systems that brought that information in, in the first place. So what used to be a complex multisystem workflow becomes a conversation, right? And that gives every merchant dramatically more leverage and enables faster, better communication, better commercial decisions, better relationships with our vendors. And then lastly, Robin, I know Per mentioned this, Robin is our operating system for stores. We named it Robin because our store managers are super heroes, they're Batman, Robin is, of course, their trusted sidekick. I think of a store manager, if 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. Now Robin sits across all of that. And 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. And 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, 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. And probably their favorite store manager's favorite feature is the store walk. Store managers, you go in a store walks manager, you're going to learn, it's 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. They think have opportunity to improve. Maybe there's some spoiled produce that needs to be moved, maybe there's a broken fixture, maybe they see an opportunity or a hole. They're going to assign those tasks, those images, those notes. They're going to be able to track those. They're going to be able to send them back to the appropriate person without knowing who the appropriate person is, they're automatically going to get assigned to the right person at head office or in their store. And increasingly, Robin is being proactive. It's becoming agentic. So a lot of the information that we tell store managers, a lot of the insights, maybe they don't need to know at all. Maybe that's actually not something a store manager needs to do. If we recognize that an item is selling a negative margin, I can probably go identify why and fix that problem upstream. That shouldn't be an insight that's shown to a manager and have them figure out how to fix that, right? And so 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. So what you've seen today from for me for now, is AI moving from technology to real business impact in Loblaw. We invested early, right? We've built the technology and the talent to operate at scale. And now we're 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. So thrilled to get to share that with you. Hopefully, that was interesting. And with that, I will hand it over to Gregers to talk Shoppers Drug Mart.

Thanks, Lauren. I'm Gregers. I joined as President of Shoppers Drug Mart back in January. And just building on Lauren, I think I've been through so many conferences and retail events. Everybody is talking about AI. The big difference that I've experienced is, all of this, it's happening. It's happening every day in the company and it's part of why retail is -- was always exciting, but it's just doubly exciting now. And 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've heard Lauren talk about. I will present a bit about the future of Shoppers Drug Mart, and then I'll ask my great colleague, Tanya, to join because we know there's a fair bit of interest in the topic of GLP-1s, so she will cover that as well. A little bit about myself. It's a very easy narrative in my 20s. It was all about learning to lead. I started out as an officer in the Royal Guards. This is not me with the paint expression. It's 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. And 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. Spend a few years consulting doing what Per just said, dreaming of doing only strategy. But fortunately, I got into the real world in my 30s and stepped into the wild world of media. And you can probably remember the early 2000s, newspapers were this thick and full of classifieds, which was basically like printing money and everybody was watching Flow TV, and when I exited at the end of my 30s, of course, it was a completely different business. So spend 10 years doing what we now call transformation. Every aspect of the business changed the business model, how we reorganized, the technology, every single thing. And what I learned is that if as a strong incumbent, if you embrace technology, if you do it really fast, you cannot only get ahead of your conventional competitors, you can actually also match the disruptors, the tech giants of the world. And then finally, I found my calling in my 40s, stepping into retail for a co-op, a company much like Loblaws, 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. And then I came to Matas Group in 2017, 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. And 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, about 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 10 K of 9 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 $18 billion company, it's quite easy. It's split evenly between the front store and the pharmacy business. Clearly the #1 retailer in pharmacy and drug and that's 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. And of course, I went through the brochure and the annual report and read all about it. And then I 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. and it is quite awesome. And I think that 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 Pharmapri. And that is probably 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. And the mechanism for that, the vehicle for that is PC Optimum. And Per said it, 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's 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 don't 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 3 pillars of opportunity for shoppers. There's 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'll get back to that. That has been a market that has consistently outgrown GDP, and we expect that to continue to happen. And then pharmacy, which is just growing structurally, and you won't 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 Tanya is going to talk about in a moment. But 2 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 share when a shoppers or a pharmacy -- Pharmaprix opens, it's a big day in the community when a Shoppers opens its stores. And 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 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 falls 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. So we see a huge opportunity for growth in the online channel. And 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. And of course, seniors have more need for the likes of Shoppers. So we are positioned for long-term growth, and we believe Shoppers is a long-term sustainable growth case. 4 our areas where we are investing, 4 areas where we see opportunity, 4 areas where we will be making a difference for customers. And 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 Tanya. So this is the new box that we have designed, sort of a fresh take on what a Shoppers look like. Those of you who have grown up with Shoppers, you'll recognize this. It's 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's 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're going to be around for a very, very long time. And again, once we open stores, we enter a market, over time, we do become the preferred pharmacy, the preferred drug store in that market, returning nicely on our capital. We're already pretty much everywhere in Canada. So on dollar, dollars, we are the #1 pharmacy in market share and in beauty as well. So we are already that #1 position. And rather than invent something completely different because 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 and layering on a lot of the beyond that Lauren talked about and will be talking about. So the front store, the front store is where we see the greatest potential for renewal, for bringing newness to the market. And I'm going to spend just a moment talking about beauty because beauty for an investor is an amazing category. It's a big category. It would usually outgrow GDP. It's 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. And when the good times come back, it exits really fast. So 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. So every time something commoditizes, something new gets invented. And this happens in a deep collaboration across the value chain. And 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. And 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. So 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. And you will see this come to life over the next year in existing stores, but also in the new builds. So at the very other end of the front store, we have our food business, our convenience food business. And 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. So 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 estate. So there is this great sort of spectrum of going to a shopper 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. So 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. So we're now testing in a few markets this exit made that you will have seen in other types of retail. And 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 respiration. So 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. And we see that as we grow online, it's 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's 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's building with David and the stuff that he's been building on the tech side, we have everything in the enterprise that's needed to supercharge our online growth. And 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. And right now, the only game in town for online is about speed. In the old days, people were okay with waiting 1 day, 2 days, 3 days to get their goods. That's no longer the case. Now it's about speed. And of course, having 1,400 little DCs, 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. And then pharmacy and health. And our role at Shoppers is to take on the role as market leaders to always be at the forefront of what's happening in health and pharmacy, but you don't run that kind of business as a retail business. It is about getting everything right every time and being very, very exact. So this is about doing things right, but it is also an opportunity for us to play a broader role within the Canadian health care and pharmacy landscape. So 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're 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 TC chat to have an ongoing conversation with the entire body of our of our membership base with all our patients, with all our customers on an ongoing basis in the digital world. So you can imagine everything from drug adherence. And it's quite -- when you look at the numbers, it's quite remarkable how few people get a prescription, they don't 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. So you know that if you're dad drops off a drug, you actually get a notification, you can remind him to go pick it up. Quite spectacular. And we can do it at scale, thanks to some of the things that Lauren just talked about. And also on the ops side, there is an immense opportunity to rethink how we operate pharmacists. And as part of my introduction, I spend the full day doing pharmacy assistant training. And I know you're used to digesting a lot of data and looking at -- if you want a really stressful day, come to a store, spend 3 hours as a pharmacy assistant. This is real work. And the amount of information, the kind of questions you get, the service you're expected to deliver, but also seeing through the eyes of what you can do with technology, an immense opportunity to take away administrative task, data entry and turn screen time into face time. So a lot of opportunity to free up time. And all of this compounded by the fact that the rate of drug innovation is increasing, so higher patient demand, more solutions and a Shoppers that is, I would say, perfectly positioned to capture that opportunity and make a difference in the world. And just one example here of what we're doing. Instead of pharmacist filling the scripts in the stores, we've built 7 facilities to do central fill and 60% of all eligible prescriptions are actually filled centrally, freeing up time for the pharmacists to engage with patients. And 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. And that's our queue, Tanya. To introduce Tanya. Tanya is my great colleague. She runs our health care 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. So whereas I'm brand new, this is real experience. So I'll hand it to you, Tanya.

Thank you. Thanks, Gregor, and good morning, everyone. I'm very excited to be here today to have the opportunity to go a little bit deeper on specialty medications and what that means. As Gregor 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. And so 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. So Gregor 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. So 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 $10,000 per patient per year, upwards to $500,000 plus a year for a single patient. So that's kind of the main differences between a specialty medication and what we would call our traditional business. And then, of course, there's a category of GLP-1s that we will speak about -- or I'll speak about as well, which is a subset of specialty drugs. And so why is this so important to us? You would have heard Per and Richard talk about specialty at a high level on some of our calls. This is where R&D research and development and innovation is happening with pharmaceutical companies, not only globally -- not only with Canada, but globally. So our team spends a good amount of time making sure that we're well connected to the pipeline of new products and therapies that pharmaceutical companies are launching that they'll 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. So if you look at the growth for each of the categories, specialty is the fastest-growing segment. So it's growing at 13% versus traditional drugs growing at about 2%. And then you've got GLP-1s within that at 17%. Within our Shoppers Drug Mart business today, specialty medications represent about 37% of our pharmacy business. So it is already a meaningful part of our business, and that is very intentional. We've 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. And then you'll see our share -- our market share within those categories. So although we under-index today versus our traditional share on the specialty category, we've made the investments, and we are well positioned to take advantage of that growth. And then on the flip side, on the GLP-1 space, we over-indexed. So 28% of scripts filled in Canada for GLP-1s are filled within the 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. So 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's sort of the standard process. For specialty, more complex drugs, the patient experience is very different. So Gregor sort of alluded to it, but it's even more pronounced with specialists. So some patients wait anywhere from 6 months 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'll be prescribed the medication. As I mentioned earlier, these medications are $10,000 plus per year. Not many people are paying out of pocket for this. And so the journey for reimbursement or what we call coverage who's 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's also not something that you just hand to a patient and say take till a day. So there's 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. And then there's training that can be done at store level. So when they go into a pharmacy to pick it up, we have pharmacists centers of excellence who are actually well positioned to support these patients through that process. And so 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. And we're very uniquely positioned versus other retail pharmacies to be able to capture this growing -- fast-growing market. Of course, we have our 1,800 Shoppers and Loblaw pharmacies, physical locations across the country, which we've 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've got over 200% growth in the number of specialty patients that we've seen in the last 3 years. Why we're uniquely positioned versus other retail pharmacies is because this is not an inexpensive business to run. So the cost to entry or the cost to support and get access to these patients is very high. But we've 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're shipping prescriptions to patients' home. 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's going to a store. So our cost to serve is very different. The 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 $100 to have a specialty courier take those to their home. It's also really important to note that specialty patients are like all of us in the room. So 20 years ago, specialty medications were infused. You'd go to a clinic, you'd sit there for 3 hours, you'd 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. So there's oral therapies now. There are self-injecting therapies that are very retail-friendly that can be delivered through a retail pharmacy. And so 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 home are picking up in the Shoppers Drug Mart pharmacy. These are -- this is not an Amazon package. This is not a bottle of shampoo or a super toothpaste that can be left at the front door. These are pharmaceutical drugs that are $20,000, $30,000. You need to see home for it. So like I said, this is people who are working populations who don't want to be sitting at home for 5 hours once a month to receive a package. So 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. So 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 2 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, such as the health network, is growing at 2% to 3% faster than the market. So 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. So 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. So 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. So as all of these new medicines come to market, both private and public payers need to find the funds to reimburse these therapies. So coverage is a huge variable in these growth assumptions. Adherence, Gregor spoke about it. Patients starting therapy is one thing, but staying on the therapy indefinitely is another. And some factors are either side effects or cost and affordability. And so 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. So 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. And then the affordability, of course, that I spoke about. So 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 3 key categories that we talked about. So the traditional medicine, sort of 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. So your employers, your benefits that you have to work. On the GLP-1 category, it's interesting to see that very little funded by government because it's mostly for the diabetes indication, not for the weight loss indication, but a high concentration in cash. So almost 40% of people who fill their GLP-1s are willing to pay out of pocket within our network. So that's 38%. And that's helpful in the sense that it is not subject to government deflation and reform and those things that we've seen in the past. And then 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. So GLP-1s as a category, the growth has been phenomenal. Canada as a country ranks about #9 in the world on pharmaceutical consumption. In the GLP-1 space, we're #2 next to the U.S. So as a country, we over-index in GLP-1s. As I said, our market share is around 28% today. We -- the Canadian market is $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 $8 billion by 2030. And so our job is not to just wait for patients or Canadians to walk into a pharmacy and hand us their prescription. I'd like to call it sort of growing the top of the funnel. And so what are we doing to meet Canadians where they need and to fill the gap in care that we talked about in terms of accessibility of health care providers. So we have launched late last year a Shoppers Drug Mart weight management program. Think of this as sort of the version of Hims & Hers or Felix, 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's 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. And then it's not just handing over a prescription, but it's a longitudinal connection and journey with those patients. So we have dietitians, we have nurses. They're interacting with our pharmacy teams, and we're connecting them with recommendations around diet and exercise. And 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've 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 2 clinical advisers who are key opinion leaders or key physicians within the diabetes and obesity space. It doesn't stop there. So 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. So it's exciting for Canadians. It's exciting for us at Shoppers and Loblaw because they're looking to be able to treat very different disease states. We're talking about pain, we're talking about liver, we're talking about kidney, addiction. And so the ecosystem that we've 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. And so with that, I'm going to turn it back to Gregor 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, Tanya. It is an absolute game changer, a big market. We're in a good position. And of course, what happens is once patients go on drug, their needs change quite a lot. And we're getting smarter and smarter about what happens to food consumption, how the habits change, but also seeing that it is a real lifestyle change. So it unlocks opportunities to rethink your fashion, your wardrobe basically. It unlocks opportunities to rethink your skin regime, all kinds of things. So 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, so when I hand over to Frank in just a moment, he's already thinking about how can we build our offering in our supermarkets to cater to a new segment of the population. So I think bringing it all together, Shoppers is an incredibly strong business. We are positioned to grow $18 billion business, delivering $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've done within specialty and connecting with all the digital and tech opportunities in the enterprise. So thank you very much. I will hand it over to my great colleague, Frank Gambioli.

Good morning, everyone. I'm super excited to be here. Frank Gamboli, I lead the Supermarket division. I've been with the organization 41 years. I might not think I look that old, but I started in Fortino's in 1985. It's actually the first grocery store I ever shopped in. So it's kind of the bitter sweet. I've been fortunate to have 18 different roles in the company. So you think that's just a tenure of over 2 years. And hopefully, it wasn't 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. So 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's basically Costco and Walmart. $27 billion in annual sales, continuing to grow EBIT. The cornerstone of our strategy is retail excellence, as Per touched on. 3 areas I'm going to take you through today is merchandising excellence, differentiated value and technology and AI and what we're doing there, which Lauren touched a bit on already. Think about merchandising excellence. The areas we're focused on, there's 3 areas we're focused on. When we think about multicultural, 3 years ago, multicultural was a single-digit business for us. We've been growing in the last 3 years at double digit. It's going to be a $2 billion business for us in the next 2 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 2 years, there's been over 5,000 closures, and you continue to see that cycle through. We can provide great value in this area, great quality. And when you think about this, this is an $800 million business for us. And we think in the next 3 years, we can scale this to over $1 billion. Gregor has touched on the GLPs. And Natural Valley, even though we've been in this business for over 20 years, it continues to grow. And how we think about this business and how to contribute to what happens with GLPs, we still think this is a big growth engine. We're still growing, I'm going to say, between 5% and 10%, and this is a $1 billion business for us. And I don't think there's 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're 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're seeing good growth, single digit. But I think with Danny and the team now, we see that as a big opportunity to grow. Gregor has touched on it, too. Pharmacies. We have 350 pharmacies in my stores. So it's a big opportunity for us. I always use this analogy. Our stores -- some of our superstores can do 10,500 flu shots in the fall. When you put that and scale that, it's actually a big push for us this year. So 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 Danny 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's a huge opportunity here to grow online. We're just at the infancy stages. And I think with Brian coming on, that's a big opportunity and a big unlock for us to grow. Right-hand side, renovations. We've Per touched on it. Superstore, we've done 64 renovations. By the end of the year, we'll have up to 99 done. We've done 37 value models. Value models in our smaller stores, what we've done is we've taken the best of the right-hand side, and we've put it into our conventional stores or our smaller footprint superstores. Tremendous. It's actually one of the things that shocked us a little bit because the growth on that has been very, very good. We continue to launch those, and they're very capital light. When we think about value, obviously, 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. So initial stages working really well. We're leveraging Danny's. She's going to talk about her stronger together and how we buy better. We're able to leverage that. We think about PC Optimum, it's our secret weapon. You heard them talk about that. We're able to give back $500 million in points to our customers, 70% penetration, great return on sales that helps us drive market share. And when we think about value beyond price, 2.5 years ago, when I started in the supermarket division, we knew we needed to get more credit for the value we provide. So if you look at the top segment there, we've 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, and we've been very successful at that. And PC Express. So PC Express is pick up in store continues to be double-digit growth for us. And that's on a pretty mature business and a very big base, and that continues to grow, and we're leaning into that very heavily. That feeds into when we think about technology and AI, I want to think about PC Express, our pickup in store, we've leveraged technology. And what's really important here is we have stores -- superstores that are doing almost 20% penetration online. And instead of adding more space, we've added technology in. And this technology allows our stores to pick a little faster. So 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've actually set a benchmark of 150. We've been between 180 and 210. So it's been very, very successful. We're launching this out next year across the network. So that's been a big, big unlock for us. We looked under cost controls. That's an electronic shelf label there. We -- I'm going to say we're the -- 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've been here for a long time. So that allows us to reinvest our labor into different areas, be it front end, service. And if anybody has ever worked in the store, the worst job in the store is putting up labels. So it's been very encouraging for the stores, too. We have gatekeeper there. And -- what gatekeeper does is, obviously, you've heard of the retail stuff issue we have. We have -- we call them runners. People would just run out of our stores, fill up buggies and run out. And that's a common occurrence every single day in our stores. It continues. Gatekeeper stops them at the front door. They haven't gone through a till and deactivate the front wheels because now we have 4-wheels, 2 wheels depending on stores, it locks at the front door, and that's really, really helped us recover a lot. Lauren touched on Robin. Robin is a big tool. Just think about 2 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 on the shelf, that technology, they just take a picture, e-mail it directly to the department manager. Think of the efficiencies that's created. And one of my favorites is AI use in our self-checkouts. So we're launched technology that can identify produce. And why that's important is I'm not going to say people are stealing, people might be misscanning items. So we saw just on bananas, organic bananas sales go up 25%. It also detects that if you haven't scanned an item, it will say, hey -- it will nudge them and say, "Hey, you forgot to scan this item." So we've seen good returns here, fully launching in the next 12 months. So very, very promising. And scanned it is the unit on the bottom there. It's basically a Zebra because think of it as a phone. And this technology, what we're able to do is scan -- you're going to hear about companies, sorry, 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 and a big -- say, a superstore in 45 minutes. That will bring back real data to the stores. It will tell them -- it will create a picklist for the store. Think about in the past, we would have to go to the back room and say, "Hey, you did this, this and this, go check." So Johnny is running back and forth. Now this will create a picklist within 40 minutes. And on top of that, it will tell the category people if that planograms have been completed and they're compliant in that store. So 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 leading to price. The fallacy that we're not opening stores, we'll be adding in this year and next year, over 500,000 square feet into the retail market. So we feel we're well positioned to continue to grow sales and EBIT. Thank you for the time today. And 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, fresh and 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. So refreshments in the hallway, stretch your legs, and we'll see you back in a bit. [break]

We'll try and get ourselves back on track here. So 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.

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 Mlanie Singh. I lead the hard discount operations here at Loblaws. So I've been here for 17 years. I've had various roles in merchandising, operations, procurement. But 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 Nofros that opened up at Vic Park and Sinclair. And I called my mother last night and she remembered right away because it was a family outing. We went as a family to Nofrills. 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 -- and as a kid, I'd always ask my parents for all these things, which I never got, but that was okay. I've got since gotten over that. But can you imagine what my job is like today when I walk in a [indiscernible] or a Massey 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. So it's my pleasure to be here with you today. So from the hard discount perspective, we'll be 570 stores strong by the end of 2026. Hard Discount is anchored by 2 amazing brands, -- No Frills, and Maxi. And why that's important and why that's part -- an integral part of the story of hard discount is those 2 brands are iconic and symbolized value for customers. And what we've seen over the past several years are we have 2 types of customers: value needed, the $50 a week shop that Per talked about, and value wanted, where they're looking for a different value. We've also seen the divergence. The [indiscernible] 35, hard discount is 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 are seeking value as well. But we also have the middle that just want to come for value that we offer. And Maxi and No Frills has 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. But 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. So 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 Twarvere, Quebec. And someone also asked me at the break, I don't see Loblaw stores in Quebec. So 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? Toy Riviere was a conversion. And Toy Riviere as a Provigo was a really good store. Toy River as a Maxi does 5x the sales of a Provigo and is profitable year 1 and resonates with the customer. Equally as important, it doesn't erode the current Maxi store that we have in Toy River. It warranted a second store in that city. That's the story of Toy River. 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 2 front doors. I get mixed up all the time, and I go there a lot. But when that store was presented to me as -- from our real estate team, I was like, are you people crazy? This is a U-shaped store. There's 2 front doors. How are we going to make this work? And I do 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. And finally, the story of Victoria, British Columbia. 1.5 years ago, we had 1 store. 1 store on the island -- Vancouver Island. At the end of this year, we'll have 5. By the end of 2027, we will have 5 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 2 and 3x the size of our projections. So we're very pleased with how we rolled it out, but it's not one cookie-cutter experience we're 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. So if Frank talked about AI. Every single piece of AI functionality Frank and Lauren talked about, I employ in my store. I don't care if it's 4,000 square feet to 80,000 square feet, it's in the store. Robin, the macro space, the merchandising that Lauren talked about, the standard that Frank talked about it to doing shop floor walk, we employ all of it. PCX, so delivery and online digital presence is present in Hard Discount, and we're growing exponentially. Loyalty. It's 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 customer. But 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 have to -- we're going to grow intentionally, and he talked about it. 30 to 35 stores a year is what we're targeting. And why does this make sense? So in the last 3 years, we've opened 200 stores. You must have a repeatable process if you're going to open up 200 stores. But we are really pleased with what we see. And what we see is that portfolio, the sales exceeding plan, we see year 2 and 3 comps outpacing our expectation, and we see EBIT positive less than 3 years. That's a great portfolio, and the work continues. But how does the work continue? If I'm sitting here as leading hard discount, there's 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 [indiscernible] in New Brunswick. It was the first time we took Maxi out of Quebec. Guess what happened, resonated with the customer. We'll have 4 Maxi stores in New Brunswick by the end of the year. And it's resonating with the customers and delivering exactly the results we see Maxi delivering in Quebec. A year ago, precisely to the week, Per said, now we should go to Poland. When Per put up those 6 things of his leadership style, you know when he says, we should go to Poland, you're going to Poland, okay? That's how this works, okay? So off we went to Poland. And I said, Per, what are we doing in Poland? It's the highest per capita discount stores in the world. And 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. The 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's been open since the end of July. But 2 things I would tell you. We dive deep within ourselves to figure out how to build it cheaper, and we dive deep within ourselves, and we're learning every day and how to operate it more efficiently. And those are the 2 things of [indiscernible] Ontario. But for me, [indiscernible] Ontario represents one thing. The first customer in [indiscernible] 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? And he said, I could walk to the grocery store. My son doesn't 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 grocery. So like I mean, he's going to be my customer for life. But [indiscernible] Ontario affords us to go across this country in underserved communities. And finally, Komoka. As Gregers talked about, we've reinvented what it means to be a discount store. We've modernized it. And I wanted to take you to Komoka, although I couldn't take it to Komoka's day. But the look and feel of the store doesn't make you feel discounted shopping at discount. And 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 and the new logo is there. We will roll this across the country. And we -- as we open new stores, it will take shape as this. And what 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 -- so 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 shopping -- shoppers lending itself to what we can do best together. And what we see is when Gregers and I go together, it is a winning proposition for many of our customers. We're delivering growth. We're delivering it in the right way. We're delivering it, and we see the results from our efforts. We're 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. And we're doing it through the most efficient way, both building stores, operating stores and using AI where we possibly can. So 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, being technology, what David is using, being control brand that April talked about, selling T&T products, making sure Mary has given 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'm going to bring up my good friend, Tina from Tina from T&T.

Very good. Thank you. 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've never been before, it's 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's a business that my parent started. in 1993, named it after me and my sister. And my mother was a founding CEO. She brought to the store what she needed as a mother of 3. And it's so amazing that we started in Richmond, BC and so many moms were desperate for what she brought just like in 1993. There's a sentence in here that actually 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 less. These are real. This one bottom right, Mississauga, an engagement of a young couple, a wedding part -- a couple coming on their wedding day to take their wedding pictures. And this slide 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. We -- 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 United States 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 rocked Bellevue and most recently, we brought our format to San Jose. We opened up a 55,000 square foot 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 3 weeks. We have this pent-up for the first 3 weeks. I love this headline here, the first one, Canada's cult favorite supermarket arrived in the Bay Area, and it's a showstopper. It literally like gets the hairs on my arm standing up because cult's favorite to describe at T&T. I mean, usually, that's reserved for like a trader dose, right? But T&T has earned cult favorite already, even though we've got 3 stores. And you can see here a lot -- the most hyped Asian supermarket is finally here, a lot of great headlines. And 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 #3. Customers tell the story the best though. I'm taking you deep into RedNote. RedNote is the #1 Asian social media platform out there. I've done a bit of translation for you. You can see here while China often praises American Costco, it's crazy that is Chinese Canadians to make the breakthrough. Hopefully, T&T can expand to key China communities across the U.S.A. I can't face my friends until in Seattle, so I've been to AT&T. It's practically a social requirement. And the guy at the bottom here, he did his research. I immediately decided to buy Loblaw stock 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. Actually, 1/4 of our network in Canada is in regional malls. One -- we are one of very few grocers that actually 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 and main, so we don't pay main and main rents and people come to us from a very wide trading radius. Grocerant, I think the Financial Post said it the first. T&T is a grocery store plus restaurants. 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 United States. But what's so special about it because we learned from the best. No one in the world is better at private label than Loblaw Brands Limited. That's such a beautiful thing about T&T and Loblaw together because they -- Mary's team taught us the how to. We brought the authenticity. We brought the production. And now this is the #1 Asian food brand in Canada. And 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 6 reasons why T&T is winning. You see some familiar names on this list. This is a list of the leading U.S. grocers -- leading U.S. retailers, food stores, sales per square foot. No surprise, maybe #1 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'm 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 United States. We're on this list. Yes, wow, right, #1, 2, 3, third top for sales per square foot in our stores in the United States. This is a great start, guys. What we've built starting in Richmond, BC, the fuel that we've 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. 3 major pillars. Number one, we're going to continue delivering our winning strategy. Number two, we're going to continue growing our Canadian base. We've got a solid pipeline in Canada. Somebody who had already requested that they want an invitation to the opening of Empress Walk that happens 1 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've got 4 locations converting the Bay locations with Cadillac Fairview. And even in markets that are too small population-wise for T&T, Mel got 2. Frank's got 2. 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's the magic of all of us coming together. And then the and beyond is expanding in the U.S. Bellevue, I got it. We're focused now on finding our footing in California on top of the 3 that we've already opened, 5 -- we have announced on the heels of that. The next one is going to be San Francisco, right in the heart of it. We're going to shake out that city. And with each new store, we're learning more, we're gaining more confidence and really going to be making ways in the United States. So that's how we folded in into the Loblaw strategy, and I'm 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. Are you back? Okay. You're 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. So -- that. Hello again. Thank you for welcoming me back. Great conversations during the break. I'm 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 3 extraordinary businesses. We've 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. And 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, like, no, there's actually a reason this all fits together. Our retail media business financially supports our e-commerce economics, right, like helping us fundamentally change the profitability of that business. No longer is e-commerce a drag on our earnings, right? So 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 advance, our Retail Media business to help CPG so effectively reach relevant audiences and then actually measure what those customers bought. And 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. So these aren't simply 3 distinct businesses sitting beside one another. They actually are reinforcing each other economically and strengthening the customer relationship, the customer value proposition. So 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, $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 cost out of our headquarters, but we're also, as Frank mentioned, driving incredible profitability in our pick, right? So 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 cost 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 into the hands of the customer. We're also making really targeted decisions to keep this e-commerce growth growing. So 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 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, right? And so we want to extend the convenience value proposition that Shoppers 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. And 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. And so we've introduced something called virtual banners. These are curated destinations. Think of these as like shop within shops, right? These are categories like toys, like baby, even mission shops, something like East Asian food. And we build these as a micro shop and we actually -- because we are able to understand what customers would actually care about these shops, we're able to target those customers with those shops. And actually, in the East Asian example, we're seeing category growth of more than 20% when we build and put these virtual banners with East Asian called [indiscernible] in front of customers. And so we're 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. So e-commerce growth, it's not simply moving with the market. We're 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 don't think we get enough credit for this, but we do pickup and delivery. We do planned next-day shop all the way to deliver delivery as little as 30 minutes. We're on all 4 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, so easy to choose us. And that translates into share. I know Per mentioned it, Loblaw has about 32 or so percent of the Canadian grocery market in brick-and-mortar, we've got nearly 45% online in that same category. We significantly over-indexed in digital. We also see substantial room to grow, right? So this is an e-com penetration nationally. We're at about 6.5% Stores in Western Canada, we see upwards of 20%. Superstore consistently nationally is operating around a 10% penetration. So that is real evidence that materially higher adoption is achievable, and we're going to go after that by opening up more capacity. I think we're at 99% capacity out west in the stores that are pushing that 18%, 19%, 20%. And importantly, we want customers to shop both. Gregers has mentioned it, we know a customer who engages with us in more places is more valuable, right? We see customers that -- who shop in-store and online spend 2.3x more per year than a customer who shops just in store. So 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's the #1 loyalty program in Canada, 18 million active members, more than 65% of our sales connected to a PC a member, so 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. And that allows us to make, yes, our experience increasingly personal and more relevant. But that actually creates value on both sides. Customers get better offers, more relevant offers to get more value. But our teams, our merchandising teams actually use their promotional dollars way more precisely. And today, we generate about a 2.2x return on that promotional investment. Some weeks, we see 3%, 4%. It's just 3, 4x rather, just continuing to improve. So PCO, much more than a loyalty program. The power of it isn't also just scale. It's actually the breadth of the network around it. So 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, obstacle, digital services, 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. And there's 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, right? So 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, really impressive. We see that response from many of our other partners as well. And the reality is we're not done with this. We have an incredible pipeline. I'm super excited. I can't share too much today, but we've 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. So yes, we have 18 million members. But the moment a member starts to engage with us digitally, the relationship changes dramatically. They see more value, they spend more, they stay longer. Economics are significant. We track it. And this is a cohort that we've been really pursuing this population for some time. Over the last 3 years, we've consistently grown that population about 8%. They spend about $720 more per year, 40% lift in basket from these folks because they're more engaged, because they better understand the program. Now 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. And so 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're doing. This month, we're launching the brand-new PC Optimum app. This is effectively a super app for the Loblaw ecosystem, right? For the first time, we are bringing our entire digital ecosystem together in one place. I think today, we have 6 apps, customers can keep all those apps, if that's what you'd 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. And the experience in PC Optimum becomes more actionable. So you no longer just see an offer. You see an offer, you click on it, you buy that product, you check out directly there, okay? Now what makes this particularly exciting for me is that we're building it largely around conversation. So I talked a lot about earlier about how important conversation will be for customers engaging with our brands. Well, 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. So imagine telling chat, I'm 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, 3 businesses, 3 cards, 1 conversation inside of one application. Very few companies have the breadth of assortment and customer relationships 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. And 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 don't 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. And actually, combined, we reached 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 each of state. Our advertisers want the advertising we offer because it is incredibly close to the shopping decision, right? While customers are browsing online, while they're walking by our store -- 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. And then we can also see what happened, right? 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, right? We can actually say whether a customer who saw this ad bought this item or not and maybe even what they bought instead. And that makes events incredibly valuable to brands. We can help them reach the right customers when it matters most and show them what happens. And we've turned that advantage into this incredibly growing suite of products for brands. We help brands reach customers inside our stores. We've got screens. We've got audio. We've got -- even on receipts, they're buying on printed receipts. We reach them while they're shopping on our digital properties, sponsored products, display ads, video ads. And actually, 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. So -- and actually, we've even turned our data capabilities into brands, into products that brands are buying or subscribing to. We've got a product called LDIA. I'm going to talk a little bit about. So there are multiple ways for brands to work with us and multiple ways importantly, for us to grow. We've grown about 24% annually since 2023. Importantly, we expect the business to hit -- to actually exceed $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. 3 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's where they started, but rather because that's where advertisers want to be. We believe the same is going to happen in Canada. And because we've only begun to build out in-store, tremendous amount of runway for us. We have a meaningful footprint in our stores today. We've got roughly 1,800 screens across our store network, but most actually sit on the periphery of our stores. So customers see them on their way in. They see them on their way out. But as we've come to learn, they've 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're introducing new formats. We have incredible formats. We were in Georgetown last week. We've got broadcasting onto the floor. Uncrustables had a great spinning ad. -- apparent, you cannot mix this thing. We've got holograms, produce bins wrapped in screens, pretty incredible stuff. Marketers love this stuff, right, Mary. So we're not simply adding more screens. We're 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 doesn't run with us. We only have so much reach. I know it sounds like a lot, but there's 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 don't have to own any of the inventory. We don't 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. So an advertiser like P&G, who spends, I think, billions in Canada on TV can actually see for the first time, did their TV ad drive sales and one of those customers buy. Now we're 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 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. And lastly, LDIA, Loblaw Data Insights and Analytics. This is the platform I described. It's a platform that's quite large today. It's about -- we do about $70 million a year in top line from this platform. CPG subscribe to LDIA to understand and manage their business within Loblaw, meaningful. And the product actually has an extraordinary number of reports to understand what's happening in your business, over 100. Unfortunately, what we saw was advertisers were only looking at 2 or 3. And therefore, the product itself is only as valuable as those 2 or 3 reports. So we said, let's take the power of AI and completely transform this product. Let's take all the data that exists inside of our organization, layer AI on top and below it and allow CBGs to actually converse with their data. And so that's exactly what we did. We transformed LDIA into an AI-first product. So think of this as ChatGPT for your business at Loblaw. By the way, nobody is doing this. Yes, 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. So for example, marketers can ask who's 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 CBGs can just say, where am I losing share? They don't 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 LDIA. This step change in the utility of LDIA changes the entire economics of this product. We've got 3,000 customers of LDIA today, but we've got probably 8,000 or 9,000 other customers who aren't using LDIA yet because they didn't 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're buying it, okay? So this is a truly differentiated product, combining data and capabilities of AI in brand-new ways, meaningful, meaningful growth opportunity, probably 30%, 40% opportunity for LDIA inside of our organization. So that's it. I'm really, really proud of these 3 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've got it. And with that, I will hand it over to April on brands. Thank you very much.

So 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. So 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 is so exceptional. And 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 and another major grocer will be Loblaws. So fast forward to last year, 13 years later, the phone rang. It was a headhunter, I never pick up the headhunters. But on this particular occasion, they said, this is Loblaws and I thought right, that's it. They've asked me to join the team I'm going over there. So in February this year, I landed in Canada, moved countries, moved jobs, and I can say that exactly the same as Per said earlier, actually, it was the best decision I've ever made. And I'm absolutely delighted to be here. It's an absolute privilege. So my specialist subjects, really a brand strategy, customer insight, product innovation and product and packaging excellence. I've worked over 40 years in the industry, I hate to say that, but work out how old I am. And in that time, I've sort of either launched or overseen the launch of over 20,000 products. And I've also led the transformations of 3 really strong heritage brands. And 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. But 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. And 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. But 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, but it's given me a deep immersion into the world of health and wellness. And what that means is I covered 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. So here in the last 6 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've got trusted brands -- we've got customer reach. We've got technical expertise, and we've got brilliant retail execution. And all of that is what's needed to really capitalize on the growth that's 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've 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're some of the most powerful brands in Canada. I mean, President's Choice, #1. I mean, East Asian brand, we're #2, second only to T&T, which is -- we've got both of those within our portfolio. We've got Farmers Market. We've got No Name. We've got Suraj, we've got Life brand, and we've got a number of others as well. And 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. So we're really ideally placed. And this matters from a commercial perspective because these brands drive penetration, they drive margin accretion, which is really important, customer preference and customer loyalty. And the thing that excites me the most in all my 40 years, what I've started to see is that I've never seen before is there's data coming through to say there's a massive shift with consumers. They are actively choosing private label brands now. Before, it was a bit of a compromise. They're almost as good as the national brands, but they're a bit cheaper, so I'll go for it. What's happened is that is 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. And that's what's so exciting, and that's what's going to really turbocharge our growth over the next few years. So I mentioned innovation. There's a whole new opportunity for growth as we move from private label being from an acceptable substitute to the preferred choice. Our approach when we're 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's the innovation that's going to keep them coming back, keep them interested and keep them talking about us, and that's what my team are laser-focused on at the moment. Innovation, I call it a catalyst. It's a catalyst to growth. It's 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. And how we approach our innovation is the key to unlocking this new era of growth I've talked about, and we're ideally placed to capitalize on that. Now I'm going to take you into a few product examples because I don't think there's any better way of sort of explaining our innovation approach than talking specifics. But have a look at these because you're going to be eating quite a lot of these for lunch. So you can start planning what you're going to pick as we go through. So if you want to be highly competitive in the market, we need to deliver best quality and best value. And to do that, what we're always looking for is how do we get volume and scale. And one of the ways that we do that, I've 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. And this is back taking something that's very familiar to people, but putting a new twist on it, so it feels new and interesting. I've got an example here, this strawberry [ tri delicious ]. You are having this one for lunch, by the way. So save some room for pudding. This was -- this is the fastest new line that we've launched this year. And the reason is because it's half a step ahead. Everybody loves strawberries and cream. It's an absolutely delicious combination. But I think you do in Canada anyway, and we certainly do in the U.K., [indiscernible] them. But this is strawberries and premium flavor, but the new and interesting part is it's a mashup between a cheesecake and a pie. And nobody has done that before. Nobody has seen that before, and that's what really piqued the interest. And this is where the volume and scale comes in, and that's what allows us to deliver quality and value. Right. Creating and you can get this one for lunch as well. So this is one of my favorites actually. This was actually launched in 2024, but I think it's a brilliant example of a really iconic product, and we've got hundreds of these, but iconic products inspire loyalty and they inspire repeat purchase, but they don't happen by accident. They come from true expertise, and Lauren talked about this earlier, and it's the same in my team. You've got to have recipe expertise. You've got to understand processes, ingredients and execution. It's all really important for creating incredible products. So the competitive edge here for Loblaw brands is it comes from our people, comes from their experience and their capability. And I have been so lucky in the team that I've inherited when I arrived back in February. We've got product developers, technical experts. We've got insights. We've got sourcing, [ Dani ] is going to talk to you next. We've got brilliant category partners. We've got brilliant retail partners. And 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'll be tasting it at lunchtime, but it took true expertise to create this product, and this happens every single day in my team. Now you're not going to be eating this one for lunch. I promise you. But this is about our Pet Nutrition. So there's a bit missing some slide. The packaging has 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. And it's to beat them on what matters most to the customer. And 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. On the right -- besides that, you can see our competitors in the national brands and how much better we are than they are. And you look at the price there, we're 57 per 100 grams, half the price of Purina, for example. And 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. And honestly, it's a really important -- we should use this in marketing there, but it's a really important thing. who wants -- they talk about the one hand scoop. I mean this is what our dog food does. And that's the length that we go to, to make sure that our products are 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. And this is a great example of the chips category that we have built as a powerhouse within our organization. And 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 was a range we launched this summer, Canadian flavors, I call it Canadiana. I mean 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've got some -- 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 a bit like Lauren, but there's some really exciting stuff coming in this space over the next year or so. 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. And this solves a real customer problem. So that quality -- does anyone like horrible hard [indiscernible] tomatoes? I know I don't -- or tomatoes, I should say now in Canada, sorry. But this solves a real customer problem, quality, consistency, freshness, availability, and it really builds trust in our brands, and 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'm here is certainly Galen and Per, can you help us do what you do at Holland & Barrett. I mean this is obviously -- Frank talked about it as well in terms of natural foods. This is just one of the biggest areas of growth at the moment. And I think to really excel here, what we need to do is deeply understand the market, deeply understand our customers and what's important to them. You need to be very clever at spotting the difference between a trend and a fat and a trend is something that's here to stay. A fat is something that's flash in the pan. And I think the really exciting thing here and what we're really building on is to 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's about putting more in. It's more protein, more functional benefits. This is the stuff that gets customers excited that they resonate with, and this is the stuff that we're building. And here's an excellent example of a range of functional drinks that we've launched. I think you might even have them for breakfast actually, but really helping customers with their gut health, which we know the science is really emerging. We follow the science in health and wellness. As I said, we don't follow the fats. But your gut health, this is just a little topic for everybody here. Your gut health is the key to your overall health and wellness. So if you're going to do one thing for your health, look after those little microbiomes inside and make sure you plenty of variety of plants. So I'm just going to finish with one final example. No name for me, and I've given out a sweatshirt today. I know somebody is very pleased to have received one. But this is the most important battle brand in the market. And as we all know, value isn't just about price. It's that combination of cost, quality, trust and that emotional connection. And it shows up differently across each of our brands. But No Name for me really stands out. It's a genuine standout because it delivers quality of the price customers believe in, but it's got a tone of voice that is cheeky, distinctive and emotionally connected. And honestly, you'll see some of the stimulus around the room. We've got some incredible products coming through here that people just cannot believe the price they're at. It's not just an opening price point private label range. It's 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. So just in summary, our private label innovations 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 reasons to choose Loblaws, and 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. And our customers increasingly choose private label for quality, innovation and value, not just price, we are so ideally placed. So 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. So what I want to leave you with today is a very short video. It brings to life our #1 brand, Canada's #1 brand, that's your 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. So I'll just play this for you. [Presentation]

I love that too. Just music to do that version. They are actually from my hometown in the U.K. So I've got good emotional connection with me. I'm now going to hand you over to the incredible super woman, 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.

Here we go. I do Karaoke when I do this. So I'm Danni Peirce. I lead our apparel and our nonfood team and also our sourcing function. And so I'm here today to talk to you about how we are using our scale to unlock savings and those savings is what we are reinvesting back into price. And you've heard it from Per, from Gregers, from Frank from Mel and so we're here to support them in doing that. In terms of myself, so I joined Loblaw last year. I moved here to Canada. My background, so you can probably tell, I'm British originally. I've 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's 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 Dairy Farm Retail Group, where I was most recently the CEO for 7-Eleven. I wouldn't 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, but you'll be pleased to know that we've now adapted and very happy to be here in Canada. And similar to Per and to Gregers, so 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. And 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. But there was one thing that became clear as I listen to what could we do better, and it was about how do we utilize our enterprise scale and go forward with one enterprise voice to be able to unlock savings across the organization. And the reason that we can do that is because we have tremendous scale here in Canada. And so when I talk about that scale, this is the scale that I'm referring to. And so across our team, we spent $45 billion across all these different categories across grocery, across fresh, across health and beauty and nonfood and across GM and apparel. And really few retail organizations have the breadth of purchasing that we do. And so the opportunity here was how do we buy better? How do we increasingly act as one enterprise. And 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's what fuels our growth. So you saw it on one of Per's earlier slides. So we said, right, we don't want to be Canada's best buying team. That's -- we think that's too easy. Actually, we think we've got the capabilities to build the world's best buying team because we've got the scale and we can turn that scale into value for our customers. And so we said, right, well, how are we going to do that? There are 3 ways that we're going to do that. So 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. So for us to win, Canada has got to win. We've got to build Canadian supply capacity. This is particularly important to support April's plans as well. And then finally, we've got to source for resilience. And so we've got to complement that with what we buy in Canada, but there are many products we can't get here in Canada. And so we've got to be the best at buying globally as well. And 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. So 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. So 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. And so 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. And then what we do is we have one enterprise voice in our supplier conversations. So this year, that enabled us to push back on $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. So this is one example where coming together as an enterprise is making a meaningful difference. The other piece is on tariffs. And so yesterday was round 2 of tariffs, and we were hoping we would never have to say that, but we are. And so we will again operate for our customers with the same transparency that we did last time. So every product that is tariff will have a tea on it. It will be fewer products this year than it was last year, but the tariffs are particularly centered on nonfood and health and beauty products, but the tariffs this time around are up to 50%, as you will know. And we only pass on the penny for penny cost increase to our customers. So Loblaw will never profit from any of these tariff increases. And 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 costs will immediately revert back. So these aren't costs that get built into our cost base over the long term. And it's data, it's AI, and it's having one enterprise voice that has enabled us to do this. So 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. And so I've got 3 examples here for you. So the first one is in produce. And in produce, we would typically have spot bought. So we would have bought out in the market when we needed products. And actually, what we have done on several of our produce categories is we've come together as one enterprise pulled 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. And this is with Canadian growers. So this has been fantastic for us, and there is more that we're going to be doing in this space. The next one is on meats, where we've taken a portfolio approach across the enterprise. Instead of negotiating the cost of individual products independently, we've come together and we've negotiated as one enterprise across a category. We've seen tremendous results from that as well in terms of our costs. And then finally, on confectionery, this is a typical grocery category. Again, there's a theme. We've come together as one enterprise. We've 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. So these are 3 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. So 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've made it easier as well for our Canadian customers to find Canadian products in our stores. So we have now over 35,000 products that have Maple Leaf on the shelf tags. We're 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. And we're really proud of this program because we're really tapped into what's important to our small suppliers. So 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. And then we know that cash flow is so important to these suppliers. And so we have 7-day payment terms for our small suppliers. And then finally, Made in Canada funds, and we've got Wittington, Cornell from Wittington here today. So we've partnered with Wittington Investments. It's a $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. And so we've had some great successes coming in radishes, in trout, in leafy green. So this is really exciting and is going to make a really meaningful difference here in Canada. And then sourcing for resilience. And so Per talked a little bit about this earlier. So a couple of years ago, we joined what was at the time a European buying alliance. It's now become, with our presence, it's become a global buying alliance. You can see here the partners. Every retailer that is part of it is the #1 grocery retailer in the market they operate. This year, we've put over $1 billion, well over $1 billion of COGS through this program. It gives us access to a global supply base we didn't have access to before. And because our volumes are 5x bigger than when we go alone, we're seeing really significant savings. And this is on control brand products. And we're seeing anything from 5% to 25% savings on the products that are going through AMS. So we're going to be doing more of this. This is a fantastic initiative for us. And the other benefit of it is that we've 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. And so it gives us more resilience there as well. So this is the most important part. So myself and my team, we're 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, and that creates the flywheel. So I will never be out of the 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. So thank you very much for your time. And with that, I'm going to hand over to Sonya from the Lifemark team. Thank you.

I'm going to test my microphone before I walk up there. There we go. Okay. We're going to change gears a little bit. Anyone heard of Lifemark before? Anyone know what we do? You heard a lot about product. You've heard a lot about retail, that food just before lunch, like, but I'm standing between you and lunch right now. And the first thing I'm going to do is ask everyone to stand up arms around over their head because that's what we do. We do physical health, and you've been sitting for way too long, just to be clear. How are those sciatic nerves. Okay. So my name is Sonya Lockyer. I'm the President of Lifemark Health Group. I spent more than 25 years in health care, relatively new to Loblaw. So I joined in 2023. I arrived about 6 months before Per, so I had everything under control by the time he showed up. So I started as a clinician in frontline health care before moving into management consulting, then into health care 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'll notice on this slide, there's a military Insignia as well. The Army taught me how to endure transformation, if you want to -- but 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. And I did that for inspiration because I said there's no way Canada is doing it right. I came back saying we're doing it mostly right, just not quite as efficiently as we need to. So these experiences are incredibly relevant to what we're building at Lifemark today. Most Canadians know shoppers, right? They know shoppers, they know pharmacy. They understand that side of health care. Lifemark extends that health care presence into what we call community-based rehabilitation. Ours is a people-powered business. So you'll hear Rob shortly talking about how we ship products. You heard from 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. So we have a 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's growing faster, T&T or Lifemark. And I'd like to say Lifemark, we're pretty good. How T&T do is always -- the growth we've delivered since joining Loblaw, which has been quite remarkable. So talk about the power of the enterprise getting behind the small business and seeing what it can do. And then, of course, our path forward to the number that Richard really likes to think about, which is $100 million in EBIT. So here's our scale. Let's start with that. Today, we're approximately 370 clinics across Canada. As I said, roughly 6,000 team members caring for Canadians. We generate roughly $700 million in revenue in 2025. And we're currently seeing our same-store sales ranging from 8% to 10%. That being said, the last couple of months have been exceptional. So I'm excited about what's going to happen next year. But perhaps the most interesting number on this slide is actually the $6 billion market growing at 4% to 5% that we are part of. From a 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. So 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. And the focus for growth for us is actually very practical. I'd like to call it practical growth in health care. It means more clinicians. It means more locations and ultimately more access for Canadians that need it. Gregers has touched on the aging population. Being mobile, enjoying those things in life will become increasingly important as Canadians age. And when people start to hear of Lifemark, physio, right? That's what comes to mind. Community-based rehabilitation is roughly 50% of our revenue today. And so if any of you walked 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 health care 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. That's a very diversified health service offering that touches from acute all the way to specialty services. And our funding model is equally diverse. So approximately 65% of our revenue comes from third-party payers. That's always lovely. And that would be insurers. So think about motor vehicle accident, your insurance is going to pay. Think about workers' compensation boards if you're 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. And 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. And so how do I think about that runway? I think about it in 3 chapters. I'd like to say, like sometimes we're actually growing as fast as we are at Lifemark, we traverse these chapters very quickly. And so we're often setting strategy sort of a year, 18 months. The first way I'm 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. And so we now have a national footprint, coast-to-coast, strong and evolving affiliate network. And what that means is we don't necessarily have to own the clinic to have access to the clinician. And so when our capacity is constrained internally, we can find a clinician in the Yukon and Prince Edward Island to service that customer and patient need. And that's a very strong affiliate network. And of course, our customer relationships. So we've built a very strong platform. What would do we do now? So this is essentially what we're working on effective immediately. Is growing care across our channels. And I'll talk a little bit about that in a second, but that is doing more of what we already have. The second piece is how do we expand that network. So acquisitions has been a significant source of growth for Lifemark since joining Loblaw, but before that as well. And then new locations, I get very excited when I see Mel talking about No Frills and Shoppers across the parking lot. We're not there yet, but I can't wait until there's a Lifemark right there as well. Isn't that's going to be great. And then there's 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'll be able to unlock the customer experience differently within Shoppers, and that's what gets me excited. So we have the platform. We know where the growth is coming from. And really, we have a track record of delivering it. So let's get into that track record. Since joining Loblaw in 2022, Lifemark has delivered 18% sales CAGR. So very impressive. And this has been on, I would say, 50% organic, 50% inorganic. That's a question I always get asked, is this all M&A, Sonya? No, it's not. Our same stores are doing extremely well. We are doing a lot better with the assets that we have under the hood. But when I think about this growth as someone who's dedicated her entire career to health care services, it's what's behind these numbers that are really, that's really cool. So think about it, 1.5x as many clinicians helping Canadians. That's more access. 20% more locations across the country. We added 40 new locations last year. And we've improved our operating efficiency. You hear in health care, we always talk about bending the cost curve. We've been talking about it for about 20 years in Canadian health care. Lifemark is actually doing it. Our margin has improved by 1 -- or by 125%. That means we're reducing that cost to serve, which is allowing us to reinvest back into more access for Canadians. So for us, growth and access goes together. That's the passion. That's what drives everything inside of Lifemark is how do we help more Canadians. Every time we add a new clinician, expand the 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. So here we are today. First, we're 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 3 years is our scale. We can now see our business in a different way, which we couldn't 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. But it's not lost on us that the network needs to expand. We need more physical points on the map, and we will get those in 2 ways. We will continue our acquisition trajectory, but we'll also build new locations because that's going to be important. And then last but not least, strengthening the operating model. So at 370 clinics, up roughly 150 since we 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. So for me, that one is important as an enabler of the other 2. 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. We talk 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're going to have a conversation with their therapists and the Ambient AI is going to write their note. And if you think about access and expanding access, the #1 thing that clinicians talk about in Canada, they don't like the administrative burden that comes with delivering health care. If we were not inside of the Loblaw network, we would not have launched Ambient AI yesterday. Very proud of that. So the future is bright. When I look ahead, I see a business with significant runway. We operate in a $6 billion fragmented market. We demonstrated that we can grow 18% since joining, and we have a clear path. I can feel $100 million in EBIT. It's there. But what excites me most is what this growth is going to allow us to do for Canadians. One thing I didn't mention, born in rural Newfoundland, small fishing village, there is no health care 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 health care system. It is a very -- I will not see it in my lifetime. But Lord knows I will try. So 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's the Lifemark growth story. Growth creates access, and I'm very excited about what Loblaw, Shoppers and Lifemark can build together when we just get a little bit bigger. So Rob? Rob is between you guys and lunch. It's going to be fun now. Thank you very much.

Thanks, Sonya. Wow, that was inspiring. Fixing Canadian health care. Now you get to hear about supply chain, forklifts. So sometimes I say to Per, I'd almost do this job for free until I got to do s*** like this. And then I say, I deserve a raise. This is Galen's year. I always say I'm not going to do this, but I did it. You know what, though, the F-bombs are going to kept to a minimum for sure. So my name is 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 had hired me. So they got took pity on me and moved me up. But 42 years, met my wife here. She worked for Loblaw. And family, I've got one kid as an engineer in Victoria. My daughter is a successful business person in Winnipeg. And then I got one hammerhead that runs up and down the field for the Saskatchewan Roughriders. So pretty happy with him some days, 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, really hard targets in terms of how many women will hire into our workforce. And 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. Now thanks. That will help. And if my legs starts shaking, I'm going over here to the podium. So this thing is, what are we doing here? There. So this is our core supply chain for Loblaw. It was really a supply chain to the shelf. And 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 Loblaws first. We service Shoppers Drug Mart. We service Frank's stores, we service Mel's stores, and that's that. And there's no fooling around odd. See, Galen, I'm getting better. But 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 nonnegotiable. We only get to do the cool s*** that we're going to talk about after this because we get the core right. And as I said, that's nonnegotiable, and I've got a meeting every Tuesday morning where I have to face my brothers and sisters and I have to explain to them if I s*** the bed, they're going to be on me. And so I've got to make sure that we do a great job, and they're going to hold me accountable and well they should. And Per, as I'm sure you've heard, is super good at holding us accountable as well. So this is our, really our cost base. And 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, and we've been taking that most of last year and all of this year, and we're still able to bring the cost down. And a lot of that is both driving the revenue, but it's also laser focused on costs. We've got some of the most discrete labor standards in the country in our conventional distribution facilities. And 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, and we give you a certain amount of time to do that work. And then when you leave, we understand when that is as well. But 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. And I think what we really, and 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. And 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. And that's been a tremendous help for us as well. I'm not sure Ray did show you a graph around what we do from a productivity perspective on the network. And 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. And that's why you're seeing such a strong performance from a productivity perspective and also from a cost perspective. And then there is also the commercialization. We want to grow 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're working on as well, but I'll get into some of those examples later. But we have confidence in our plan to get to the $400 million. We've been doing it already. We're at -- well, I'll show you that on the next slide. You don't need to wash out yet. And yes, that's it. So why are we able to do this? And what's unique about Loblaw? Because you can say, I'm 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're in almost every small community every night because of the nature of the delivery of grocery business. And there are others, retailers that would be doing the same thing. So why are we unique? We've been on quite a journey in terms of getting product to our distribution network. So 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. So from the time it's ordered, the time it's manufactured, we pick it up and we bring it to our distribution facility. That level of penetration that we've 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. So this is the exciting slide. Right now, we're running about $200 million. We're going to do a little better than that this year. But we're about $200 million on 2025. 2026, sorry, anyway, we're going to be better than what we're seeing here in 2026. We're very confident in our ability to build to the $400 million. And when you think about what Supply Chain as a Service is for us, it's warehousing. So as we build these automated distribution facilities, we've got conventional facilities that we pull volume out of. Generally, you would say, I'll 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're in the warehouse, it's harder to get out. It's harder to pull that out and go to a separate warehouse. You've got inventory issues, you've 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, and we've 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're more mature on the domestic truckload and less than truckload. Domestic truckload is pretty easy. You haul a load to Vancouver from Toronto. We'll unload at our distribution facility. We'll pick up for a customer. We'll 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 Railroad and with Union Pacific down in the U.S. And so we're really happy about how we're positioned and how we can continue to grow that business. And then when you think of less than truckload, I like this example probably the best. There's a manufacturer in Stettler, Alberta, manufacturers geothermal pumps for the petroleum industry. His biggest problem was he had an LTL service that would come up, but they only came up 3 days a week. And he said, "I don't know when we're 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 won't allow me to do that." And I said, look, we're there 7 days a week. We haul groceries. As long as it's in a crate that it will work in a food safe trailer, we can haul that product. He's happy to do that. We can be incredibly flexible for him. And 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, and we're really excited about what that can be as well. Cross-border U.S., we're doing that today. And that really started, that would have been the first one we did. And a lot of that was because we didn't 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. And we're now doing that to the tune of almost 1,000 loads a week. So it's a pretty significant piece of the business for us. And because we're a little worried about what's going on south of the border, about 20% of our drivers are located south of the border. And so if there is an issue at the border, we can dispatch American drivers, both from Great Falls, Montana and Indianapolis, and we're going to continue to grow that. So again, we're pretty bullish on where that can go. And then the U.S. brokerage, very, very new for us. And that really comes about because a lot of customers say, well, I don't 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 don't have a ready backhaul on our own here, then we need to find a way to help them with that load. And that's, we do that through what's called freight brokerage. And that's, while, again, it's in its infancy, there's a tremendous amount of growth, especially because you're servicing the U.S. market, 10x the size of Canada. So again, we feel really good about that as well. So look, I've bored you long enough. You guys want lunch. I don't blame you. It's really good lunch. Roy, did they get that pedal cleaned up? You said they were in the tent. There you go. So that's what I got for you. Hopefully, a Q&A, you've got good questions. I'm not a very good speaker, but I'm a pretty good question answer. So love to hear it. Thanks a lot.

All right. Yes. Thanks, Rob. Your guys got that cleaned up and they arranged for the rain to stop. So we're good to go now. So we're running a little bit behind. We'll cut the lunch time down to 45 minutes, if that's okay with everybody. So 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.

Good afternoon everybody. 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. So I hope you guys all enjoyed it, and you've identified some good fines for your shopping basket this weekend. We're going to bring it all together now. The last official portion of it will be Richard Dufresne, our CFO. I'll get him up here in a second. He's going to bring this whole thing together and talk about our financial framework and consistency. You might have noticed an odd site in the food tent this afternoon. We're lucky enough to bring Michael Van Aelst back from retirement for a day. Apparently, it was raining in Montreal and he couldn't golf. So he's going to join us today and he's going to lead a fireside chat with our Chairman, Galen Weston, after Richard's done. So it's going to be an exciting afternoon. And with that, let me call Richard up to the stage.

Thank you, Roy. Good afternoon, everybody. My name is Richard Dufresne. I've been with the group for over years. Long enough to know this business quite well, but not long enough to stop being excited about what's to come. My goal this afternoon is to connect all you've 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. So if I start, all of you have seen the strong performance we've 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 in earnings. But our performance is strong despite us having significantly invested in our business over the last few years. We've invested in our stores. We've invested in supply chain. We acquired Lifemark. We are investing in T&T U.S., and we've also ramped up our AI initiatives. So 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% to 3% top line growth into 4% to 6% EBIT growth. Further, because of the significant excess cash flow we generate with our business, we can grow EPS growth by another 2-plus percent. So this is a framework. It's not financial guidance because if you look what we've been doing recently, our top line growth has actually been way higher than that. We're closer to 4%, and that's because we build beginning new stores. So the concept is more important than the numbers, and that's what I wanted to convey. To illustrate numerically what I mean by the framework, like we generate about $65 billion of sales and about $5 billion of EBIT. So to deliver 8% to 10% EPS growth, we need to grow EBIT by $250 million to $300 million a year, like that's exactly what we need to do. So very roughly, we expect Mail and Frank to deliver about $100 million of EBIT growth year in, year out. Gregers should give us around $150 million of EBIT growth and our growth businesses, the balance. So if you were to look back the last years, this is more or less what we've achieved like with a bit of puts and takes, but that's how we've done it. So 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 $120 million of earnings. We expect that our 25% share in EQ, which we will get to at some point next year, will generate more or less the same $120 million of earnings, but with higher growth and less volatility. And on top of that, we expect, and that's -- I'm looking at you, Daniel, right now, that you will issue more Mastercard annually than we've done in the past. So if Daniel issue more Mastercard, we're going to be issuing more PC Optimum points, which will translate in more sales. So win-win-win. So this is what we're trying to achieve here. This is -- 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. Like our share price CAGR is best-in-class as is our EPS growth. And 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. And 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. And 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 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 3 years. About half grocery stores, mostly discount and half shoppers. Essentially, all of these stores are doing well. So 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, this is -- on the food side, this represent 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 Callon opens in 2028. Calledon will be essentially a carbon copy of this building. So -- but our new store capital will continue. So 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 of close to $7.5 billion, CapEx of $2 billion, dividends of $600 million, we still buy back more than $2 billion worth of our stock every year. All of this while maintaining a very strong balance sheet. We have the right strategy. Why? 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 square footage growth while slowly growing EBIT margin as it drives scale. And by the way, I said it, she is only adding 1.5% of square footage growth. Gregor 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. And EQ should start contributing to our growth hopefully in 2027. And then if you go back in the middle, our digital business, namely food e-commerce, leads in market share. And you look at personalization and connected health care, this is clearly differentiating us from everybody. And I'm sure you've 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 fuel -- continue to fuel growth as it's done in the past, but I feel we're just on the verge of actually ramping it up even more. And last but not least, sourcing is now harnessing our scale and driving real business results. So it's hard for me to not be excited at what's coming next for Loblaw, but I still have one more slide. We feel our framework has longevity. Why? I just walk 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. We're not changing our framework. The framework stays the same. It's just that from your perspective, we had to work much harder in 2025 and 2026 to deliver our framework. So 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 5 years from now versus about 10% today. So 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. And now I will invite Galen and Mike for the fireside chat. Thank you.

Welcome back. Thanks...

Feel tipping this time.

Yes, yes. You're not usually up on stage.