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Grocery Retailing - Canada - February 2015

“Beyond re-creating the traditional coupon experience on a new platform, grocery retailers have the opportunity to adapt technology in ways that could vastly improve the grocery shopper experience. This will be increasingly important as the cost of food continues to rise and the market becomes more crowded.”
– Carol Wong-Li, Senior Lifestyle Analyst

This report looks at the following areas:

  • Improving the grocery shopping experience
  • Boosting emotional engagement with apps
  • Baby steps may need to be taken for click-and-collect groceries
  • Leveraging health as a way to introduce new food opportunities

 

Traditional supermarkets are favoured by most shoppers for their ability to meet grocery needs on multiple levels. The value and bulk offerings of Walmart and Costco resonate with the value-mindedness of shoppers and therefore lead many to complete their grocery shopping trips at these venues. While offering sales and promotions on items will help customers save money and get them in the door, enhancing the consumer experience will be key to engagement, as grocery shopping is seen as a fairly mundane, routine activity. As such and in light of inflation costs impacting grocery store prices, improving customer experience will become increasingly important.
 
Shoppers today have a strong desire for health-related information. Adding in-store signage and/or barcode scanners could help make health-based purchase decisions easier for customers. Complementing this offering with capabilities such as allowing shoppers to upload their list and provide information on where they can find the products alongside a store map should help expedite the process. Including notifications of associated savings opportunities should work to positively reinforce the customer’s usage of the store’s app. Ultimately, grocery retailers should benefit from finding ways to add ease to this weekly task.

This report explores the profile and habits of Canadian grocery shoppers, including the frequency they go grocery shopping, the locations where they buy their groceries and their interest in using technology as it relates to grocery retailing by life-stage and various demographic groups. The report also explores the usage and interest in shopping for groceries online and attitudes towards specific aspects of the grocery retailing industry.
 

 

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Table of contents

  1. Introduction

      • Methodology
        • Abbreviations
        • Executive Summary

            • The market
              • Population changes open new opportunities
                • Slight increases in food costs are predicted
                  • The consumer
                    • Grocery shopping responsibility lies predominantly with women, though men are active participants in the category
                      • Figure 1: Responsibility for grocery shopping, October 2014
                    • Grocery shopping tends to be a weekly activity
                      • Figure 2: Frequency of grocery shopping, October 2014
                    • Supermarkets are the primary location where groceries are purchased, though Walmart and Costco have a strong presence
                      • Figure 3: Grocery shopping location (any location), October 2014
                    • Value is top of mind for grocery shoppers
                      • Figure 4: Grocery shopping habits, October 2014
                    • Adoption of online grocery shopping may still be in early stages for Canadian grocery shoppers
                      • Figure 5: Grocery shopping online, October 2014
                    • Grocery shoppers enjoy the pursuit of a deal, though seek quality and desire health information
                      • Figure 6: Summary of attitudes towards grocery retailing, October 2014
                    • What we think
                    • Issues and Insights

                        • Improving the grocery shopping experience
                          • The facts
                            • The implications
                              • Boosting emotional engagement with apps
                                • The facts
                                  • The implications
                                    • Baby steps may need to be taken for click-and-collect groceries
                                      • The facts
                                        • The implications
                                          • Leveraging health as a way to introduce new food opportunities
                                            • The facts
                                              • The implications
                                              • Market Drivers

                                                • Key points
                                                  • Demographic overview
                                                    • Canadian population count
                                                      • Figure 7: Share of population of Canada, by territory/province, 2014
                                                    • Canada’s population is ageing and will continue to do so in the coming years
                                                      • Figure 8: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
                                                    • Over half of Canadians are overweight or obese
                                                      • Figure 9: Body mass index, self-reported rate of being overweight or obese among Canadian adults, by gender, 2009-13
                                                    • Economic overview
                                                      • Consumers’ economy to pick up, but risks remain
                                                        • Figure 10: Household disposable income and savings rate in Canada, Q1 2008-Q1 2014
                                                      • Consumer confidence may waver with falling oil prices
                                                        • Key economic indicators suggest slight increases in food costs in the future, holding true for food sold from both stores and restaurants
                                                          • Figure 11: Monthly movements in selected major components of the Canadian Consumer Price Index, seasonally adjusted, January 2010-July 2014
                                                        • Canada’s employment rates remain steady
                                                          • Figure 12: Canada’s unemployment rate, by gender, January 2008-January 2014
                                                      • Trend Application

                                                          • Trend: Let’s Make a Deal
                                                            • Trend: Access All Areas
                                                              • Trend: Help Me Help Myself
                                                              • Who’s Innovating?

                                                                • Key points
                                                                  • The rise of click-and-collect
                                                                    • Loblaws
                                                                      • Walmart
                                                                        • Innovative customer rewards
                                                                          • PC Plus
                                                                            • Sobeys
                                                                              • Thinking outside the box
                                                                                • Loblaws
                                                                                  • Walmart
                                                                                  • Grocery Retailer Overview

                                                                                      • Grocery retailers
                                                                                        • Loblaw Companies Limited
                                                                                          • Empire Company Limited
                                                                                            • Metro
                                                                                              • Mass merchandisers
                                                                                                • Walmart
                                                                                                  • Drug stores
                                                                                                    • Shoppers Drug Mart
                                                                                                      • Rexall Pharma Plus
                                                                                                        • London Drugs
                                                                                                          • Online-only grocery retailers
                                                                                                            • Amazon
                                                                                                              • Grocery Gateway
                                                                                                                • Natural and organic food retailers
                                                                                                                  • Choices Market
                                                                                                                    • Whole Foods
                                                                                                                    • Social Media – Grocery Retailing

                                                                                                                      • Key findings
                                                                                                                        • Market overview
                                                                                                                          • Key social media metrics
                                                                                                                            • Figure 13: Key social media metrics, February 2015
                                                                                                                          • Brand usage and awareness
                                                                                                                            • Figure 14: Brand usage and awareness for selected grocery retailing brands, October 2014
                                                                                                                          • Interactions with grocery brands
                                                                                                                            • Figure 15: interactions with selected grocery retailing brands, October 2014
                                                                                                                          • Social media activity and campaigns
                                                                                                                            • What we think
                                                                                                                              • Online conversations
                                                                                                                                • Figure 16: Online conversations for selected grocery retailing brands, by day, February 18, 2014-February 18, 2015
                                                                                                                              • Where are people talking about grocery retailers?
                                                                                                                                • Figure 17: Online conversations for selected grocery retailing brands, by page type, February 18, 2014-February 18, 2015
                                                                                                                              • What are people talking about?
                                                                                                                                • Figure 18: Topics of conversation around selected grocery retailing brands, February 18, 2014-February 18, 2015
                                                                                                                            • The Consumer – Grocery Shopper Profile

                                                                                                                              • Key points
                                                                                                                                • Grocery shopping may be a shared activity but responsibility lies primarily with women
                                                                                                                                  • Figure 19: Responsibility for grocery shopping, October 2014
                                                                                                                                • Women and those from households with children are more likely to be the sole grocery shopper in the household
                                                                                                                                    • Figure 20: Responsibility for grocery shopping, by gender, October 2014
                                                                                                                                  • Affluent and two-person households more likely to share the task
                                                                                                                                    • Men have a presence in this market
                                                                                                                                      • Four in 10 men see themselves as solely responsible for grocery shopping
                                                                                                                                        • Men more likely to see themselves as sharing this responsibility as they age
                                                                                                                                            • Figure 21: Share responsibility for grocery shopping – males, by age, October 2014
                                                                                                                                        • The Consumer – Frequency of Grocery Shopping

                                                                                                                                          • Key points
                                                                                                                                            • Grocery shopping tends to be a weekly activity
                                                                                                                                              • Figure 22: Frequency of grocery shopping, October 2014
                                                                                                                                            • High-frequency grocery shoppers comprised of two different audiences: seniors and parents of teenagers
                                                                                                                                                • Figure 23: Frequency of grocery shopping, by age, October 2014
                                                                                                                                              • Moderately frequent grocery shoppers more likely to be working full-time and parents of young children
                                                                                                                                                • Under-25s make up the majority of light grocery shoppers
                                                                                                                                                    • Figure 24: Light grocery shopping, by age, October 2014
                                                                                                                                                • The Consumer – Grocery Shopping Location

                                                                                                                                                  • Key points
                                                                                                                                                    • Groceries are purchased primarily from supermarkets though Walmart and Costco have a strong presence
                                                                                                                                                      • Figure 25: Grocery shopping location (any location), October 2014
                                                                                                                                                      • Figure 26: Grocery shopping location (most often), October 2014
                                                                                                                                                    • Supermarkets are meeting customer needs on a number of levels
                                                                                                                                                      • Younger shoppers, parents and larger households are drawn to Walmart though only 18% shop there most often for groceries
                                                                                                                                                        • Walmart shoppers are value seekers
                                                                                                                                                          • Costco shoppers skew older, more affluent and suburban
                                                                                                                                                            • Niche grocery venues see limited grocery shopper patronage
                                                                                                                                                            • The Consumer – Grocery Shopping Habits

                                                                                                                                                              • Key points
                                                                                                                                                                • Canadian grocery shoppers are value-minded
                                                                                                                                                                  • Figure 27: Grocery shopping habits, October 2014
                                                                                                                                                                • Canadian grocery shoppers look for sales
                                                                                                                                                                  • Weekly grocery shoppers consult flyers/circulars for sales
                                                                                                                                                                      • Figure 28: Looking at flyers/circulars (online or in-store) to learn about sales, by area, October 2014
                                                                                                                                                                    • Interest in private-label/store brands is soft despite focus on value
                                                                                                                                                                      • Coupons are used by a third of weekly grocery shoppers
                                                                                                                                                                        • Though many make lists, most are on the lookout for sales in-store
                                                                                                                                                                          • Many make lists and stick to it
                                                                                                                                                                            • One in three shoppers feel they often spend more than they originally intended to
                                                                                                                                                                              • Leveraging the ‘convenience’ factor, particularly for parents
                                                                                                                                                                                • Opportunities exist to improve the grocery shopping experience
                                                                                                                                                                                • The Consumer – Grocery Shopping Online

                                                                                                                                                                                  • Key points
                                                                                                                                                                                    • The majority of grocery shoppers have not bought groceries online
                                                                                                                                                                                      • Figure 29: Grocery shopping online, October 2014
                                                                                                                                                                                    • There is interest in this service, particularly among under-45s, parents and the Asian community
                                                                                                                                                                                      • Leveraging the voice of those who have shopped online may help drive interest
                                                                                                                                                                                      • The Consumer – Attitudes towards Grocery Retailing

                                                                                                                                                                                        • Key points
                                                                                                                                                                                          • Summary of attitudes towards grocery retailing
                                                                                                                                                                                            • Figure 30: Summary of attitudes towards grocery retailing, October 2014
                                                                                                                                                                                          • The pursuit of a deal is emotionally rewarding, with convenience an important factor
                                                                                                                                                                                            • Figure 31: Select attitudes towards grocery retailing, October 2014
                                                                                                                                                                                          • Those with children in the household are interested in using their smartphones
                                                                                                                                                                                            • High-frequency shoppers are emotionally engaged with bargains though many require convenience
                                                                                                                                                                                              • Quality trumps price for most consumers
                                                                                                                                                                                                • Figure 32: Select attitudes towards grocery retailing, October 2014
                                                                                                                                                                                              • Affluence and age influence importance of quality and preference for local foods
                                                                                                                                                                                                • Ethnic shoppers are interested in specialty foods and sampling
                                                                                                                                                                                                  • Health information is of interest to grocery shoppers
                                                                                                                                                                                                    • Figure 33: Attitudes towards grocery retailing, October 2014
                                                                                                                                                                                                • The Consumer – Grocery Retailing and Chinese Canadians

                                                                                                                                                                                                  • Key points
                                                                                                                                                                                                    • Chinese Canadians are highly engaged, savvy grocery shoppers
                                                                                                                                                                                                      • Chinese Canadian grocery shoppers more likely to supplement with other stores
                                                                                                                                                                                                        • Figure 34: Grocery shopping location (any location): Chinese Canadians against overall population, October 2014
                                                                                                                                                                                                      • Chinese Canadians put an effort into finding savings
                                                                                                                                                                                                        • Figure 35: Grocery shopping habits, selected statements: Chinese Canadians against overall population, October 2014
                                                                                                                                                                                                      • One in four have bought groceries online and more are interested in doing so
                                                                                                                                                                                                        • Figure 36: Grocery shopping online: Chinese Canadians against overall population, October 2014
                                                                                                                                                                                                      • Leverage technology to provide value, convenience and information
                                                                                                                                                                                                        • Figure 37: Attitudes towards grocery retailing: Chinese Canadians against overall population, October 2014
                                                                                                                                                                                                    • The Consumer – Target Groups

                                                                                                                                                                                                      • Key points
                                                                                                                                                                                                        • Four target groups
                                                                                                                                                                                                          • Figure 38: Target groups for grocery retailing, September 2014
                                                                                                                                                                                                        • Unengaged (28%)
                                                                                                                                                                                                          • The Avid Shopper (24%)
                                                                                                                                                                                                            • Deal Seekers (23%)
                                                                                                                                                                                                              • The Ethnic Shopper (25%)

                                                                                                                                                                                                              Companies Covered

                                                                                                                                                                                                              To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                                              Grocery Retailing - Canada - February 2015

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