Sobeys signs deal to boost delivery, online sales
Sobeys Inc. is the latest Canadian grocer to wade into e-commerce after last year’s arrival of Amazon into the nation’s competitive grocery industry forced incumbents to improve their online offerings.
“We can not count Amazon out and know that they will be strong,” said Cynthia Thompson, a Sobeys spokeswoman.
Amazon’s 2017 acquisition of Whole Foods Market, including its 13 Canadian locations, led to speculation Canada’s grocers would have to step up on home delivery offerings as the tech titan may expand its Amazon Fresh delivery service north of the border.
“We want to be the other player. The grocer that is competing with them head on,” said Thompson of what she called Sobeys’s strong, bold move into the delivery business.
Sobeys and Ocado Group announced Monday that they have signed a partnership deal for the British firm to help build the grocer’s online shopping business, which they expect to launch in the Greater Toronto Area in about two years.
The long wait is equal to the amount of time it will take the two to build a customer fulfilment centre in the GTA. A video of a similar Ocado facility in Andover, England, shows a site spanning nearly 21,000 square metres with robots rolling over a grid to pick and pack orders in about five minutes.
The companies said they will further development in other urban centres, though Thompson said Sobeys has yet to decide where or when it will expand the service next.
Ocado, which was founded in 2000, will partner exclusively in Canada with Sobeys and also provide support and engineering services.
Sobeys, which will invest some capital into the fulfilment centre and pay licensing fees to Ocado, has yet to determine what it will charge customers for the service, she said.
The announcement comes just over two months after Sobeys’s competitor Loblaw Companies Ltd. said it would partner with California-based Instacart to launch home delivery services in Toronto starting Dec. 6 and Vancouver starting this month.
Since beginning the service in Toronto, the company has expanded to other parts of Ontario, said spokeswoman Catherine Thomas, including the Greater Toronto Area, Ottawa, the Niagara region, KitchenerWaterloo and Guelph.
Vancouver services will begin soon, she said, as well as additional new markets this year.
Canada’s grocery industry has been slow to offer home delivery to customers, focusing instead on online ordering, but in-store pick up models. Loblaw, for example, offers its click-and-collect services at some 200 locations.