Loblaw plans nationwide rollout of e-commerce

TORONTO Grocery giant Loblaw Cos. Ltd. is adding more markets to its e-commerce home delivery and store pick-up service — including Shoppers Drug Mart sites — as supermarkets across the country mobilize for the battle with Amazon.

Chief executive Galen Weston told analysts on the retailer’s conference call Wednesday that Loblaw intends to “blanket the country” with e-commerce after seeing positive traction with its early efforts, which include pickup at about 200 grocery stores and commuter train stations and home delivery through Instacart.

“Customers are responding very positively to our offers,” Weston said. “Not just in the urban markets, but also with a similar enthusiasm in some of the less dense rural markets.”

Loblaw announced it will expand the number of its clickand-collect “PC Express” pick up points to 700 outlets by year’s end and will begin offering grocery pickup at Shoppers Drug Mart stores, starting with nine stores in the Toronto area in the coming weeks. The announcement covers items currently for sale at Loblaw online, including fresh food and household items such as diapers, some health and beauty items, and cleaning products, but it does not extend to Shoppers Drug Mart’s assortment, or to prescription drugs.

Loblaw said it will add home delivery to five more markets this year to include a total of 16 Canadian markets, including Montreal, Halifax and Regina. Last year, the company partnered with California-based Instacart to launch home delivery after executives said some consumers clearly want the service despite its high cost.

“More and more Canadians want to purchase goods online,” said grocery expert Sylvain Charlebois, dean of management at Dalhousie University. “Loblaw is making a play to be the legitimate virtual player in Canada. It has the advantage of capitalizing on its bricks-andmortar footprint ... using the Shoppers Drug Mart network.”

Weston said that early results show click-and-collect clients are spending more online than those with Instacart, and management sees a high amount of fresh food in the orders.

Dalhousie and Nielsen estimates suggest online grocery sales comprise about one per cent to two per cent of the overall grocery market, Charlebois said, compared with seven per cent to eight per cent for the U.S.