Metro and Loblaws expand online shopping and delivery services to offset competition from Amazon

Canadian Grocers are battening down the hatches in preparation for the very controversial arrival of Amazon.com Inc (NASDAQ : AMZN) and its entry into the Canadian grocery market. Metro Inc (TSX : MRU ) and Loblaws (TSX :L) stocks have been in limbo due to the tectonic shift to e-commerce that the grocery industry has been experiencing since Amazon throw light on its plans to spread its disturbance to the grocery retailer market.

Canadians have been slower than their American counterparts to adopt online shopping, including for food. In June, online sales accounted for 2.3 per cent of total retail trade in the country, according to Statistic Canada’s most recent figures.

Amazon.com Inc., in redefining how the food industry makes transactions in a digitalized and borderless world, is pushing Metro Inc. and Loblaws . Inc to become more innovative, which is good news for Canadian consumers, but bad news for shareholders of Canadian grocers due to the added risk of the imminent technological shift.

Canadian grocers will be stepping outside their comfort zones, as e-commerce gradually becomes the preferred method of obtaining groceries for Canadian consumers over the next few years.

Bibliography

Financial Post (2017), Metro plans to scale back store hours, extend e-commerce service in Ontario, http://business.financialpost.com/news/retail-marketing/metro-to-take-50m-hit-on-minimum-wage-hike-plans-to-scale-back-store-hours

The Hamilton speculator (2017), Trending: Home delivery of groceries, https://www.thespec.com/opinion-story/7964790-trending-home-delivery-of-groceries/

National Post (2017), Loblaw on the defensive as the Amazon bogeyman lurks, http://nationalpost.com/pmn/news-pmn/loblaw-on-the-defensive-as-the-amazon-bogeyman-lurks

Radio-Canada (2017), Loblaw fermera 22 magasins et lancera un service de livraison à domicile, Radio-Canada, http://ici.radio-canada.ca/nouvelle/1067466/loblaw-fermera-22-magasins-lancera-service-livraison-domicile

Statistique Canada (2017), Retail trade, June 2017, http://www.statcan.gc.ca/daily-quotidien/170822/dq170822a-eng.htm

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