Costco launches online groceries, delivery
Wider selection, but limited to non-perishables
TORONTO •Instead of fighting for a parking spot at Costco Wholesale warehouses, customers in Southern Ontario can now get groceries from the general retailer delivered directly to their doorsteps.
Costco Wholesale announced Wednesday that it started selling groceries online for the first time in Canada, following its top rivals as supermarkets prepare for Amazon.com Inc.’s entry into the grocery market. Costco previously launched an online shopping service in the United States.
“We’ve watched our colleagues in the U.S. enjoy success from their Costco Grocery launch, and are looking to repeat the same success in Canada,” Costco Canada’s senior vice-president Andrée Brien said in the news release.
At first, delivery service will only be available in Southern Ontario, with all orders from Costco.ca processed out of a warehouse in northeast Toronto where dozens of jobs have been created for the venture, Brien said.
Costco eventually plans to expand deliveries to the rest of Ontario and into Quebec. No timelines have been set for other regions.
“We are starting on a smaller scale to ensure that we provide the level of service that Canadian members have come to enjoy across all of our businesses and services,” Brien said.
Costco Wholesale operates 99 warehouses in Canada and employs more than 39,000 people. It said its website offers more than 19,000 items, whereas its stores offer about 3,500.
The new service includes hundreds of grocery, health and beauty products, but it is limited to non-perishable products. It comes with a two-day delivery guarantee, although that is only available to members, and it doesn’t charge a delivery fee for orders over $75. It does not offer weekend deliveries.
The move online follows the tone set by Walmart Canada Corp. and Loblaw Cos. Ltd., both of which started delivering groceries in select markets in 2017. The online ventures followed Amazon. com’s foray into the grocery business when it purchased Whole Foods in summer 2017.
“It’s a logical pre-emptive strike to address what’s coming up in the future,” said Sylvain Charlebois, professor in food distribution and policy at Dalhousie University.
“Amazon is a real threat, so they’re adapting.”
Costco, along with Walmart, has steadily increased its share of the Canadian grocery market over the past few years as its food offerings have improved. While its online sales will not include fresh produce, unlike its competitors, Charlebois predicts it will in the future once it tests the market.
Online shopping also has the potential to attract new members to Costco, Charlebois said, as it removes some of the bulk-buying brand’s downsides by enabling consumers to avoid weekend traffic in parking lots and the need to lug around heavy goods. Plus, deliveries may be especially appealing for small and medium enterprises, an important segment for Costco.
“For consumers looking for the convenience, if you don’t have to carry any of that stuff around, well, online shopping sounds like a good deal,” he said.