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Grocery industry continues to grapple with COVID-19 delivery demand

As more and more Canadian consumers adopt e-grocery, grocery chains and delivery services are looking for ways to keep up
Lester Balajadia/Shutterstock

It’s interesting what a public health crisis can do to consumer minds and habits.

For a long time, the popular narrative about online grocery shopping in Canada was that people were reluctant to try it. Before the COVID-19 pandemic, about 7% of food in the U.S. was purchased online and in the U.K. it was nearly 10%. In Canada it was only 1.7%.

READ: Here’s how COVID-19 will reshape the grocery business

“Last year, a survey by Dalhousie University suggested that barely 4% of Canadians were considering buying food online,” Sylvain Charlebois, Dalhousie professor and one of Canada’s foremost experts on the food industry wrote on Monday. “Now, as of April 8, 22% of Canadians are thinking of buying food online regularly, including after the crisis is over.”

If one of the challenges for a business when introducing a service is simply to get people to break old habits and patterns, COVID-19 has—almost overnight—pushed many Canadian shoppers to try something new.

At a time when people are staying home as much as possible, and visits to the grocery store suddenly feel fraught, it’s clear many delivery skeptics have become converts to the online grocery shopping experience (this writer included). So much so that the various services have struggled to keep up with demand and getting a coveted time slot feels like winning a small lottery.

The U.S. delivery business Instacart—which offers delivery for Loblaw, Walmart and Costco in Canada—said demand was up 300% year-over-year and in the last week it had grown its active shoppers from 200,000 to 350,000.

And Canadian delivery company Inabuggy just announced it too is staffing up quickly to to keep up with the surging demand for its service. Inabuggy offers delivery from a number of Canadian grocery banners including Metro.

“We currently have hundreds of shoppers, and are looking to hire thousands of shoppers to fill the demand across Canada,” said Inabuggy's CEO and founder Julian Gleizer. Demand is so high that new hires are being onboarded and sent out on the road to fill orders the same day, he said.

The grocery chains meanwhile are also struggling to keep up with demand.

Metro spokesperson Geneviève Grégoire said it opens new online shopping slots every day, but they fill up quickly. “We continue to increase the capacity of our online grocery store, that includes hiring more staff,” she said. “We also ask our customers who can, to go to the store to do their shopping, one adult at a time, to leave more availability for customers who can’t.”

Metro also said it was working on “solutions” to increase its delivery capacity, but declined to elaborate what those new “solutions” could be.

The Globe and Mail recently reported that Loblaw was considering closing one of its stores to public shopping and using it to fill online orders and pickups only. “Our PC Express business has more than doubled in recent weeks as the numbers of Canadians shopping from home continues to spike,” Catherine Thomas, senior director, external communication told Canadian Grocer.

“As demand grows, we’re finding new ways to serve more people, faster. That means more equipment, more capacity in pickup windows, and more staff,” she said. “We are doing our best to fulfill orders as quickly as possible, but in some areas where demand is particularly high, wait times for pickup or delivery could take a few days.”

Asked about the possibility of repurposing a store to focus only on online orders, Thomas said “it’s something we’re considering, as we look at options to increase capacity.”

One of the interesting developments in this story could come from Sobeys. For two years now, Sobeys has been building out what it has said would be the most advanced online shopping services in Canada, through a deal with British company Ocado.

On Wednesday Sobeys parent Empire announced it would speed the launch of its e-grocery service, called Voilà, to parts of the Greater Toronto Area. Testing of the service is expected to start April 26. A phased rollout to customers is expected once testing is complete

READ: Sobeys unveils online home delivery brand

“We can’t get it open soon enough,” Medline told The Globe and Mail recently. “E-commerce–even at capacity right now–is still a tiny sliver of what we would need to feed Canadians.”

READ: Farm Boy and Voilà are Empire’s weapons for winning in Ontario

The big question that cannot be answered now is if the widespread move to online shopping will truly become a habit that remains when the crisis passes and people are allowed to go to the grocery store whenever, and as often as they want.

“These unfortunate circumstances have led to significant growth, and I believe that many will continue to use Inabuggy as a means of convenience and safety,” said Gleizer when asked about what this surge could mean to Inabuggy long term. “Given the surge in demand, and ongoing growth, we are planning to retain as many as we possibly can to ensure we continue to fill our growing demand, and open more windows to accommodate as many customers as we possibly can.”

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