A Fresh, New Year in Grocery

Canadian trends//December 6, 2023

In the past four years the grocery industry has seen seismic shifts to supply chains, transportation channels, and economic uncertainty that has evolved consumer behaviour and ultimately the retail landscape. From the acceleration of e-commerce to the movement amongst retail channels, Canada’s grocery industry continues to evolve.

The pandemic catapulted the popularity of online shopping and has aided in solidifying its presence on the grocery scene. However, it’s still just one small part of the industry. Some 30% of consumers buy groceries online, but just 4% do most/all of it online; meanwhile 70% of consumers are buying all groceries in-store. This weighty majority have resumed their pre-pandemic shopping habits simply because they enjoy the in-store experience; this highlights the fact that a retailers’ physical footprint is just as important as their online presence.

Inflationary pressures have been especially poignant, with consumers grappling between keeping their food budgets inline and not going without. To achieve the best of both worlds, consumers are using their savvy to procure the best value for their budget. An extension of e-commerce is the communication of promotions, flyers, and coupons – all available as fast as your mobile bandwidth will allow. Shoppers have been, and will continue, to shop more than one retailer, switch brands and research the best deals available. As a result, competition is heating up not only within categories, but across retail channels as well.

Mass merchandisers, discount retailers and even dollar stores have always held the title of “major disruptors” in the industry, but this attribute couldn’t be more appropriate today. We are seeing discount banners expand their item assortments, along with the offer of additional services (30-minute grocery delivery!). While these retailers are not stealing entire trips from traditional grocers – 85% of consumers regularly shop one or more grocery retailer – they will erode baskets sizes.

Younger generations as well as an increasingly culturally diverse consumer base will drive demand in categories for global foods, as well as natural & organic products. As such, watch for product innovation that ties international flavours, convenience, and allowances for at-home creativity. Health & wellness will be tied more than ever to longevity this year, with a focus on nutrient-dense foods and simple ingredient decks. While this might be a slow boil, grocers are best to take heed as category assortments are being reviewed.

Despite economic pressures and shifting consumer priorities, overall grocery sales have remained stable in Canada. Groceries continue to remain an essential good, and thanks to well-informed consumers and mindful retailers the food industry will continue to shift to meet the needs of the moment.

 

1 Mintel Canada – Grocery Retailing Canada 2023

the word "Organic" spelled out with colourful leaves
Consumer trends//July 24, 2023

Organic has moved from a niche market to mainstream and the organic consumer has also evolved, mainly due to a post-pandemic renewed focus on personal health, climate change and sustainability.

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