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Retail analysts on state of Canadian grocery industry

Investments being made to renovate conventional grocers

The grocery landscape in Canada is changing and recent announcements from the country’s major grocers have got retail analysts weighing in on further shifts in the industry.

Now that Target is exiting Canada and Loblaw has announced that it will be building dozens of new stores and upgrading at least 100 franchises, it makes sense that the latter retail would revamp its locations. That was the sentiment shared by IBISWorld retail analyst Will McKitterick in a CBC News article Thursday.

He said shoppers in Canada are starting to look for a more premium experience when they grocery shop. In response, grocers are adding things like dine-in sections and free WiFi to match these expectations and use “more than just the food they’re selling” to entice consumers.

He added that big grocers need to keep consumer interest by keeping fresh and relevant every couple of years.

Market analyst Kevin Grier commented that the discount area has been the biggest area of growth in the last few years, referencing grocers such as No Frills, Food Basics and FreshCo.

CIBC World Markets analyst Perry Caicco recently noted, though, that money started to be put into “conventional” grocers such as Loblaws and Metro rather than discount banners last year. In a February CIBC note, he wrote that the big grocers are moving back to spending on stores (mostly renovations) after a few years of spending on systems and logistics infrastructure.

Read the full story here.

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