Retail Trends for 2018: Canadian Grocery Industry

A few months into 2018, we’ve already seen a whole lot of retail news, specifically for the Canadian grocery industry. The Loblaw price fixing, Sobeys expanding FreshCo into Western Canada, Amazon purchasing Whole Foods… there’s a lot of change on the horizon.

As we move further into 2018, what retail trends can we expect to see from the Canadian grocery industry? We took out our crystal balls and looked ahead at what we think might happen — and how you can adapt to the changes.

  1. Growth for Major Retailers

As mentioned above, many growth changes are already in motion heading into 2018, both physical and digital. Loblaw has launched PC Optimum and is piloting PC Insiders, a fee-based subscription program. It’s also launching a grocery e-commerce delivery service in Toronto and Vancouver, which is expected to be introduced to even more markets in 2018. Sobeys is expanding its discount format, FreshCo, to Western Canada. Metro is continuing with plans to acquire Jean Coutu pharmacies and is expanding its e-commerce operations into Ontario. Walmart is expanding its digital offerings in its recently launched e-commerce store. Expect to see more changes coming in 2018. We’re also watching the H.Y. Louie Co. expansion and Sobeys’ partnership with Ocado, a British online supermarket.

  1. Labour Laws & Minimum Wage

With substantial changes to Ontario and Alberta’s minimum wages, and hikes on the horizon for other provinces, grocery retailers will have to adapt their prices and staffing models. Already, several grocers have allegedly been fined for breaking new labour laws. The minimum wage increases could also affect labour in the farming sector, which Canadian Grocer reports “could result in more mechanization and automation.”

  1. Small, specialty stores

In 2017, retail sales at grocery stores gained only 1 per cent year-to-date, according to Retail Insider. However, specialty food stores saw retail sales up 7.5 per cent over the year. With Canadian food trends expected to skew more towards healthier, more boutique options, we’re expecting the specialty food niche to stick around.

  1. Ultimate Convenience: Food Delivery & Meal Kits

Several major retailers have already launched or are planning to launch food delivery services, including Loblaw, Walmart, and Metro. Metro is also expected to focus on its investment in MissFresh, a meal-kit company. The meal-kit industry has roughly doubled in Canada since 2014, according to Canadian Grocer. Restaurant-like convenience is definitely on the horizon for the Canadian grocery industry in 2018.

  1. Blockchain & More Scrutiny

The end of 2017 saw several major retail news stories involving the grocery industry. Specifically, the Loblaw bread price fixing admission and the ecoli breakout in romaine lettuce. While these definitely aren’t correlated incidents, it seems to us to stem back to the same root: more scrutiny. With these types of stories gaining national attention, the Canadian grocery industry may have a more watchful eye turned toward it in 2018. One way that might happen? Blockchain — a way of storing and sharing information virtually. It’s still new, but Walmart has reportedly conducted two blockchain pilot projects.

  1. Changes for Suppliers

Amazon’s purchase of Whole Foods is sure to cause changes ahead, and one that’s been reported as a possibility is charging supplies for in-store merchandising. According to Progressive Grocer, Whole Foods has been “placing limits on how products are sold in stores and asking suppliers to help foot the charges.” While we’re not saying this is going to be a model that every grocery store takes, it sets an unsettling precedent — especially as the changes were made to “save on costs and centralize operations” — and may be a debate we hear more about in the coming months.

  1. Focus on Nutrition

An updated Canada’s Food Guide is rolling out in early 2018 and it’s likely shoppers will be looking for more nutritious options that fit the new guidelines. Coupled with trends, such as a focus on niche products and the popularity of meal kits as healthier alternatives to restaurant eating, expect to see more of a focus on fresh.

Storesupport Canada can help you adapt to these retail trends for 2018. We’re known in the Canadian grocery industry for our in-store and digital solutions that help create a better customer experience. Whether it’s conducting a retail audit, managing your digital footprint, or in-store merchandising, we can help. Learn more about our services by calling 1-877-421-5081 or visiting www.storesupport.ca

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