Loblaw expanding online grocery business across the country, raising dividend

Canadian grocers have recently started to focus heavily on their e-commerce offerings, including home delivery options, after tech titan Amazon acquired Whole Foods Market, including its 14 Canadian locations last year.

Metro Inc. announced in November that it would bolster its e-commerce options, including launching services in Ontario.

Sobeys Inc. made its plans public about two months later, saying it signed a partnership deal with British company Ocado Group to help build its online shopping business. It plans to build a customer fulfillment centre, which will store food and automate the process of picking groceries, in the GTA and launch the service in about two years.

Some experts have questioned whether a two-year wait is too long and will result in the grocer losing some customers to other chains able to fill the gap in the interim.

The announcement came as Loblaw raised its quarterly dividend to 29.5 cents per share from 27 cents per share and reported improved quarterly earnings.

Loblaw earned a profit attributable to common shareholders of $377 million or 98 cents per diluted share on $10.37 billion in revenue for the quarter ended March 24. That compared with a profit of $232 million or 58 cents per share on $10.40 billion in revenue in the same quarter last year.