A year ago, in this space, I commented on the growing sales through Asian supermarkets.
At that time, their total sales were estimated to be between $3 billion and $5 billion per year, and I wondered whether or not Statistics Canada had been able to account for those revenues in its annual calculations of Canadian supermarket sales. It is StatsCan’s sales figures that form the basis of Canadian Grocer’s annual Market Survey.
I said at the time that if StatsCan included Asian supermarket sales in its calculations, then total “traditional” supermarket sales (those from chain and independent grocery stores, supermarkets and convenience stores) for 2012 would have to be reduced by the amount attributable to Asian supermarkets.
So, instead of the small sales increase (as reported in our February 2012 issue), traditional grocery sales may have actually declined that year. But, again, without confirmation from StatsCan, we can’t say for sure.
So this year, while analyzing StatsCan data for the Market Survey (published in last month’s issue), I again asked StatsCan if they tracked all sales through Asian supermarkets. This time I was told StatsCan “could not confirm” that it was accounting for these sales.
Frankly, that is understandable given how quickly Asian supermarkets are growing in numbers. It also means that Canadian Grocer’s current market survey of sales through the traditional grocery industry is likely very accurate.
As we published last month, traditional grocery store sales actually declined by 0.4%, to $87.5 billion, from 2012 to 2013. The fall was due in great part to a significant drop in the number of convenience stores.
So, what about Asian supermarket sales? They’re up to $6 billion plus per year, and, according to Carman Allison of Nielsen, overall ethnic grocery sales in Canada are growing by a whopping 16% per year.
Likewise, Perry Caicco of CIBC World Markets says Asian supermarkets have annual sales equal to Walmart’s food sales in Canada, which CIBC estimates to be $6.7 billion. And he believes Asian sales are rising faster than Walmart.
Caicco also estimates the number of Asian, or ethnic supermarkets in Canada to be around 200 right now. He notes that some 90 of those are in the Greater Toronto Area.
By my own estimate, at least six have opened in the last year. Whatever the actual numbers, this growth is spectacular in both the number of locations and the sales figures.
It is no wonder that so many ethnic grocery stores have opened in or near Toronto. There are greater numbers of just about every known immigrant group around Toronto than in any other part of Canada, including Chinese, Korean, Japanese and Filipino as well as South Asians from India, Pakistan and Vietnam.
What separates current Asian supermarkets from the shops of 20 years ago is their sheer size coupled with broad selection and excellent prices.
Many offer a product mix that appeals to a lot of different cultures, including non-ethnic Canadians. They offer hot takeout food, cafés, halal meats along with regular meats, vast produce sections, fresh fish, Asian produce and grocery and impressive frozen- food sections.
It’s no wonder they are attracting ever-increasing numbers of customers away from traditional grocers. Their low prices also draw shoppers looking to save a few cents.
There are four such Asian supermarkets within an easy drive from my house in Toronto, and I’ve shopped them all. They provide a fun experience, but you often have large crowds of other shoppers to deal with–a problem traditional grocers would love to have.
It’s almost as if Asian grocers are rubbing it in the faces of traditional grocers: sales up 16% compared with a sales decline of 0.4%, and a rapidly expanding number of stores, almost all of which are located in areas abandoned by other retailers.
If there’s any good news for traditional grocers it’s that ethnic supermarkets only add up to about 7% of total Canadian grocery sales. At least for now!
George Condon is Canadian Grocer’s consulting editor