As the year comes to an end, Canadian Grocer looks back at the top 10 stories that had the greatest impact in the sector:
1) New king of the West is crowned
It was lauded by many as the deal of the century when Sobeys scooped up Safeway this year.
Many observers figured that one of Sobeys rivals would buy Safeway. The deal sees Sobeys becoming the West’s No. 1 grocery chain.
2) Loblaw bags Shoppers
With tongue firmly in cheek, we dubbed it the world’s biggest drug deal when Loblaw Companies firmed up its $12.4-billion purchase of Shoppers Drug Mart this summer. The deal that some have said changes the retail landscape in Canada was quietly completely on a country road northwest of Toronto in a minivan between Galen Weston, Loblaw’s executive chairman, and Holger Kluge, Shoppers’ chairman.
3) Target comes to Canada
When the U.S. retailer known for its cheap-chic offering finally opened its doors in Canada this spring, consumers and competitors were readying for a real retail battle to ensue.
Analysts found that Target’s pricing was very competitive. Now at 124 stores, the retailer is looking to drive food trips going forward as its top executives said apparel sales at stores in Canada have exceeded expectations but that food, health care and other high-frequency categories have grown more slowly that anticipated.
4. Rise of the c-store
Make way for a new c-store for the 21st century.
Sobeys unveiled its new IGA Express store in Quebec City in December, with plans to develop 60 more stores over the next five years–on average of one a month–at an estimated capital investment cost of $100 million. The IGA Express features good quality take-out food and/or groceries at the same prices, quality, as regular IGA stores.
Meanwhile 7-11 in the U.S. is targeting millennials with wine and healthier fare.
5. Amazon debuts in Canada with CPG
Compared to Target, Amazon’s foray into Canada was a low-key event when it announced late fall it would start selling 15,000 food products–but not perishables. In the United States, Amazon delivers fresh food to customers in Seattle and L.A. through its AmazonFresh division. The online retailer said it will expand that service to some 20 cities next year, including some outside the U.S., with Toronto pegged as a likely target.
6. Grocery gets healthy
From dietitians to holistic health experts, the grocery store is becoming a hub of health. Loblaw is testing a new health store format similar to Whole Foods while others are offering at shelf-level nutritional guidelines to help consumers choose healthy options. This all comes at a time when food makers are also facing consumer pressure to come up with cleaner ingredient decks.
7. The fight for booze in grocery
In Ontario and B.C., provincial governments are looking to modernize provincial liquor laws. B.C. is looking at a model where the sales of liquor be separate from grocery sales in the store, while Ontario said it would open 10 LCBO stores within grocery stores. There’s a similar scheme in Manitoba. And Saskatchewan is now allowing more private liquor stores to open.
8. Mobile wallet gains ground
As e-commerce grows in grocery, the mobile wallet is also coming into its own. This year, Loblaw was the first retailer to partner with Ugo open mobile wallet. Nielsen research shows that almost a quarter of Canadians are willing to use their smartphones as mobile wallets. Walamrt in the U.S. is testing a scan and go option, while NFC technology has already made waves for European retailers.
9. Next steps for big data
The loyalty card now provides loads of data for retailers to get shoppers shopping.
This year, Canadians got two new cards: Loblaw’s PC Plus, a loyalty app; and Target Canada’s Redcard credit and debit card. Redcard and PC Plus generate mounds of data that can be distilled into consumer insights to boost sales.
Add to this customers using their mobiles for purchases (see number 8 above), there’s even more customer data on hand for retailers.
The key lies in how retailers use the data. Experts say expect expect to see mobile tools become more personalized, further accounting for past shopping behaviours and preferences to hone suggestions and rewards.
10. Farmers Markets come to the grocery store
With the continued importance of local goods in grocery, it’s no surprise supermarkets featured more farm-inspired designs.
From an urban market to a farmers market feel, there were lots of stores that opened this year that brought a rural feel into an urban setting.
Check them out below:
Provigo Le Marche
Fresh St. Market and Fresh St. Farms
Freson Bros.' Fresh Market
Country Grocer in Nanaimo, B.C.