Online sales and delivery are soaring in Canada, yet while retailers are moving forward with expansion plans, in-store shopping, though reduced, will undoubtedly return.
Online orders and delivery from Canada’s major grocers have gone from a relatively novel service used sparingly to something approaching normal since the pandemic began.
In its most recent quarterly report, the Canada-wide grocery chain Sobeys said e-commerce sales rose by 241 per cent last year compared to 2019.
The unprecedented demand for online orders at Canada’s three largest grocery chains—Loblaws, Sobeys, and Metro—which control more than 60 per cent of the country’s supermarket industry, has forced these companies to accelerate expansion plans they had long had in mind but previously held back on.
In June, Sobeys, which delivers under the name Voilà by Sobeys, opened a $100million warehouse in Vaughan, about 22 miles northwest of Toronto. Inside, hundreds of cube-shaped robots, which come from the UK-based company Ocado, compile online orders for more than 16,000 products. The robots move along a three-storey storage system known as “the hive,” delivering items to humans below who package them.
Metro, meanwhile, recently reported that online food sales had nearly tripled in 2020 compared to the previous year. The company, which operates in Ontario and Quebec, increased order capacity out of its hub stores and plans to open its first center for online orders in Montreal this summer.
Elsewhere, Loblaws’ e-commerce orders totaled about $1 billion sales in 2019, but by the midpoint of 2020, they were already at $1.2 billion. The company has opened more pick-up locations and converted sections of five existing stores to strictly process online orders.
In November, Loblaws announced a multi-year collaboration with autonomous vehicle company Gatik following a 10-month pilot project in Toronto that employed a self-driving vehicle for grocery delivery.
Gatik will be operating five such vehicles for Loblaws up to seven days a week, 12 hours a day, on five routes in the Greater Toronto Area. All vehicles will have a safety driver as a co-pilot.
It seems unlikely that in-store shopping will disappear completely, however. Marion Chan of TrendSpotter Consulting in Toronto said in a note that while online shopping has risen from 12 to 15 per cent of Canadian shoppers before the pandemic to about 30 per cent now, she expects those numbers to fall when pandemic restrictions ease, largely because of consumers’ desire to see their produce.
She predicts that 20 to 25 per cent of grocery shopping will be done online in the long term.
It remains to be seen if a resurgence in in-store shopping post-pandemic impacts the expansion plans for online services currently being executed by retailers. Yet they appear to be conscious of potential obstacles.
Sarah Joyce, senior vice-president of e-commerce at Sobeys, recently said in an interview with CBC that she doesn’t expect e-commerce to take over entirely.
“The majority of the business will still be in stores for a long, long time to come,” she said.