Longo’s continues to build out its online grocery capabilities with the expansion of its Grocery Gateway headquarters, the acquisition of business-to-business focused grocery delivery service GroceryMarket.ca, and a new pilot project with the click-and-collect service Penguin Pick-Up.
The expansion of the Grocery Gateway facility from 47,000 to 150,000 sq. ft., enables Longo’s to nearly double its online inventory – from 10,000 items to more than 18,000 – and expand key categories such as frozen, produce and grocery, says president and CEO Anthony Longo.
Longo says the company also plans to build out its offering in categories such as prepared foods, and health and beauty. While he did not provide specifics, Longo says Grocery Gateway is on track to record double-digit revenue growth this year. Grocery Gateway currently has 50 delivery trucks and expects to add to its fleet.
Longo’s specifically targeted GroceryMarket.ca because of its focus on business customers, which comprise approximately 75% of its user base. Its customers include everything from community centres to small offices looking to fill their pantries, he says.
“One of the things we want to do is continue to grow the business-to-business section of the business,” says Longo, who did not disclose the size of GroceryMarket.ca’s customer base. “They also have a large number of [regular] customers that were untapped in our opinion, and we thought there was a good opportunity to go to those people as well.”
The pilot project with Smart Centres’ Penguin Pick-Up service includes locations in Leslieville, Yorkdale and Queens Quay in the Greater Toronto Area, as well as Oakville. Longo’s says the project will be used to assess shopper demand for pick-up versus home delivery.
The past 12 months has seen a rash of activity in the online space, with Walmart bringing home delivery to the GTA; Loblaws announcing a new partnership with the U.S. delivery service Instacart; and Metro acquiring a majority interest in meal kit service MissFresh and expanding its online pickup service to Quebec City.
Longo’s also quietly purchased a small meal-kit company called Cache last year as a test-and-learn exercise, he says, to uncover what types of prepared foods might resonate with customers. The company has since been closed.
“Everyone’s trying to position themselves for where we believe the customers are going and what are the pieces required to get us there,” says Longo, who recently rode with a Grocery Gateway driver so he could talk with customers about the service.
“We’ve been at the forefront of grocery delivery since we bought Grocery Gateway in 2004, and we’ve made significant investments to be ready for the demand.”