Grocers rebound with slight sales hike

Canada’s traditional grocery industry managed to do something last year that it hadn’t done since 2012: grow.

Sales at so-called traditional grocers (chain and independent supermarkets and convenience stores) rose 0.7 per cent in 2014 over the previous year.

It was the first time since 2012 that the industry had experienced a year-over-year sales hike.

In 2013, sales fell 0.4 per cent as deal-hunting shoppers, mounting food square footage and intense competition from Walmart and Costco took its toll.

Those factors continued to plague the industry in 2014, but a shot of food inflation likely helped supermarkets bring in extra money at the tills.

Total traditional grocery store sales in Canada rose to $88.18 billion in 2014, up from $87.55 billion a year earlier.

Another reason sales grew last year was that there were simply more stores. The number of chain supermarkets countrywide grew by 50 last year compared to 2013. That increase came despite Sobeys closing 50 stores last summer.

There were also 21 more chain convenience stores and 14 more voluntary (franchised) stores. The number of unaffiliated independent stores, on the other hand, fell by 13.

The data is from Canadian Grocer’s just-published Market Survey. The Market Survey, published annually by this magazine for more than 50 years, provides the first real snapshot of the state of the grocery industry in the previous year.

In 2014, not all regions of the country saw growth and some saw more than others.

The province with the highest grocery store sales increase was British Columbia, with 3.1 per cent growth.  Alberta, which had been the fastest growing region of the country for several years, was second with 2.4 per cent growth.

Only two regions saw sales fall: the Atlantic provinces (down 1.3 per cent) and discount-store heavy Ontario (down 0.7 per cent).

With Target’s estimated $300 million in grocery sales now up for grabs, and supermarket chains such as Metro reporting higher food basket inflation lately, grocers are certainly hoping for even higher sales hikes in 2015 than last year’s 0.7 per cent.

But the industry still has a long way to go to catch up to its historical growth rate. In the last decade (2005 to 2014), the traditional grocery industry has grown, on average, 2.6 per cent a year, while in past decades 3 to 4 per cent growth has been more typical.

The full Market Survey is published in the February issue of Canadian Grocer, out now in print and available to subscribers on iPad this week.

Print copies can also be purchased by contacting Canadian Grocer’s group sales manager of circulation, Michelle Iliescu, at [email protected]