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Canadian market update
Story Date: 12/21/2020
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Source: NCDA&CS, 12/18/20
Heidi Kim of Argyle recently attended the Grocery Innovations Canada (GIC) trade show filled with interesting webinars from members of the grocery industry. Here are some key takeaways from the most relevant sessions we attended. The main themes revolved around the rise of e-commerce and the pandemic impacts on Canadian shoppers.
Rise of E-Commerce
• E-commerce is growing in Canada due to the COVID-19 pandemic in addition to consumer behavioral shifts – running to the corner store has now become an online purchase
• The pandemic has democratized supply chains through e-commerce, providing direct-to-consumer access to a wide range of companies and suppliers – not just the major players
• There has been a spike in online transactions for grocery and this is expected to grow even more
• Those with the best customer service are succeeding – customers expect personalization, convenience and speed when shopping online
Pandemic Impacts on Canadian Shoppers
• Reduction in consumer spending has come from high-income consumers, rather than low income
• The impact COVID-19 has had on consumers is polarizing
o Insulated consumers (75% of the population): those who have not been impacted as much by the pandemic
o Constrained consumers (25% of the population): those who have been impacted by the pandemic, i.e., have lost jobs – these consumers are restricted on the ability to spend and are just purchasing the basics
• Household savings have increased to more than a quarter of household spending, which is an all-time high – This is a substantial amount of money on the side-lines that could re-enter the economy at any point
• Canada has seen a similar growth pattern in supermarket sales to the U.S. (14% U.S. vs. 12% Canada)
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