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Amazon leads online grocery shopping in Canada: Survey

E-commerce giant beats out Walmart and Loblaw's in recent survey conducted by NRG

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While Amazon may be a relative newcomer to the Canadian grocery game, it is dominating online grocery shopping, according to new research.

 In the online survey of 1,004 Canadians, 62% of respondents who buy groceries online said they shopped at Amazon, while just 37% said Walmart, and 23% said Loblaw’s.

Amazon and Walmart’s most-preferred status should be cause for concern with Canada’s traditional grocery brands, said Sandra Kesselman, vice-president at Vancouver market research company NRG, which conducted the survey. On its own, Amazon had a bigger share of online shoppers than the traditional grocers combined.

“Amazon is years ahead of the traditional grocery stores in terms of e-commerce,” she said. “Canned goods, cleaning supplies and personal care categories have been popular at Amazon for years. With the Whole Foods acquisition, they might became even stronger.”

READ: Amazon estimated to have 70-plus private brands

 The familiar Canadian grocery brands, on the other hand, really only introduced their online offerings a few years ago, and what they offer has limitations in terms of regional availability and in-store pickup versus delivery.

Meanwhile, Walmart has been offering e-commerce for its customers for a while but has not done much with groceries. “That’s going to change,” she said. “Walmart is partnering with Food X to start delivering groceries in Vancouver this summer.”

The survey also suggests interest in grocery shopping online is rising fast with nearly 28% saying they shop for groceries online and 6% saying online was their “main method” of grocery shopping.

Another survey, just 18 months ago, found only 15% of respondents had bought groceries online.

That was, in relative terms, the “very beginning of this ‘new era’” of online grocery shopping, said Kesselman.

“So a jump from 15% to 28% in 18 months, with all the media support we have witnessed, sounds very reasonable,” she said. “Also, the services Canadians consider important, such as pricing, assortment, convenience, have steadily improved.”

According to the NRG findings, an additional 27% of respondents who haven’t shopped for groceries online said they were willing to do so soon. “If I were a traditional business, that’s what I’d be watching,” said Kesselman.

Convenience was the most cited reason for online grocery shoppers at 79%, followed by price and time savings, both 74%.

In terms of what they are shopping for, personal and canned goods were the most often cited at 51%, while fresh meat and seafood were last at just 20%. For those considering online grocery shopping, 60% said home delivery would encourage them to try and 54% said more competitive prices.

As recently as 2015, Canada’s large grocery retailers were unsure about e-commerce.

“We’re investing to be ready to launch when the time is right but the demand for that offer is not obvious today,” said Metro CEO Eric La Flèche, in May 2015.

By late 2017, Metro was offering “click and collect” in seven stores in Quebec and home delivery service in Greater Montreal, Quebec City and Gatineau, with plans to introduce online grocery to Ontario later this year. “Clearly there is a customer preference for home delivery,” said La Flèche. 

While Loblaw has partnered with Instacart to provide delivery to more of its customers, CEO Galen Weston has said delivery complemented its existing click-and-collect options. “We have a high level of conviction around the attractiveness of click and collect proposition,” he said. “If you look around the world it’s significant part of online grocery shopping in pretty much every region and every country.” The company offers the service at 300 stores and is adding to new locations at a rate of one per day.

READ: Online grocery and loyalty points a focus for Loblaw

And Sobey’s CEO Michael Medline has set spring 2020 as a target date to roll out delivery across the Greater Toronto Area following a partnership with British online supermarket Ocado. “I see this as a marathon and we’re in the first 100 metres,” Medline said of his company’s slower entry into the race for online business.

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