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Each day TFO Canada publishes a sample of trade news on the Canadian import market along with any new, updated or changed regulations and legislations regarding international trade; countries in which TFO Canada offers services and on the export sectors which it promotes.

 

Loblaw extends grocery ecommerce

Friday, November 13, 2015 > 10:27:10
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(Retail Analysis)

Loblaw has started to roll-out its click-and-collect operation for grocery ecommerce to stores in Western Canada.

Builds on existing operations in Toronto and Edmonton

Starting this month, Loblaw will start to offer the service at its larger format Real Canadian Superstores in British Columbia, with stores in the Vancouver area, Kelowna and Red Deer in the first phase of the roll-out. This builds upon the launch last year in the Toronto area and subsequent roll-outs to Ottawa and Edmonton. Developing the proposition is an important element of the retailer’s future growth strategy, particularly given the opportunity to integrate the service at its Shoppers Drug Mart locations.


Channel evolving quickly in Canada

Canadian retailers have made significant progress with their ecommerce operations in a short period of time, particularly given the almost non-existent status of the channel just over a year ago. In addition to Loblaw, Walmart has started to test grocery ecommerce in Ottawa, while the Overwaitea Food Group, which will be a key competitor to Loblaw in the channel in Western Canada, continues to expand its service. Recently it started offering the service in downtown Vancouver.


Services remain centred on major cities

Prior to these launches, the channel was mainly dominated by smaller operators. Sobeys was the only major grocer to offer any form of grocery ecommerce, with a service operating at its IGA stores in Quebec and Thrifty Foods in Western Canada. Other leading ecommerce providers, such as Grocery Gateway in Toronto, operated by Longo’s, and Spud.ca, based in Vancouver have been developed with a focus on individual cities. Going forward we expect to see additional retailers enter the channel, both existing operators and technology focused companies which are looking to disrupt the sector.


Channel remains small but scope to grow quickly

While still very early days for the channel, the prospects are for significant growth over the next two to three years as retailers move from test to roll-out mode. Currently the channel represents 0.2% to 0.3% of the total grocery market, but it could more than triple in value over the next five years. The pace of growth will depend on how quickly the individual retailers expand their initiatives across the country, increasing the number of stores offering the service, and how quickly consumer acceptance grows.


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