Walmart to expand home grocery delivery pilot program in Toronto

After testing delivery of groceries ordered online to three Toronto condos, Walmart will be taking the service to more homes in the city core, according to a report in the Globe and Mail.

Walmart’s CEO Lee Tappenden told the Globe that while the retailer had been using its own trucks for the condo trial, which started late last year, the company would also work with “Uber-style” services to deliver the groceries consumers order online.

Tappenden said the delivery service comes with a $10 fee and requires a minimum $50 order.

Home delivery is often identified as the inevitable next step in the larger trend of increased online shopping, including for grocery.

But, online grocery shopping itself remains a nascent category in Canada. In a report released last year, BMO’s Peter Sklar determined grocery ecommerce represented just 1% of total food purchases in Canada compared to 3% in the U.S. and 4% in the U.K.

Online will “likely be a net cost” for traditional grocery chains in the “foreseeable future,” Sklar wrote in his report, adding that “the online expansion of food offerings by Walmart and Costco is a more pressing competitive issue” for supermarket chains.

One more problem online grocers face is trial and interest. A recent Mintel report, quoted by Sklar, found 88% of Canadian grocery shoppers have never tried online ordering and that a clear majority (68%) are not interested in it at all.

However, according to the Globe story, ecommerce research firm Profitero believes shopping for groceries online will grow at “three to four times” the growth of sales in-store.