PHOTO PATRICK SANFAÇON, ARCHIVES THE PRESS
“Before the pandemic, a tiny fraction of the population bought their food from an online grocer. During the first two weeks of November, according to the firm Angus Reid, 15% of Canadian households bought food online, ”says our collaborator.
It is often said that the food industry is never affected by recessions, or even inflation. Some even go so far as to say that inflation is the friend of industry. However, Eric La Flèche, CEO of Metro, as well as Galen Weston, CEO of Loblaws, both signaled last week that inflation will force most people to stay home more often instead of going. at the restaurant. There is some truth to all of this, but the job market and our consumption habits are going through profound changes. For food purchases, the consumer is becoming a little less predictable than before the pandemic.
By the end of 2022, some estimates suggest that 70% of employees will work from home five days a month, at a minimum. Many employers have found that businesses can make money and save a lot by keeping employees home more often. Relying on part-time or full-time communication technologies works well. Most importantly, working at home gives us a different relationship with food. We stay close to our fridge and our pantry, we garden a little more, food becomes a focal point of our lives at home.
At the office, food is a great excuse to get together, to work in groups around lunch or dinner. While we use food at work, we experience it at home.
So on this point, Metro and Loblaws are right. But humans need breaks, and above all, inspiration. Since the start of the pandemic, online commerce has exploded. Recent data tells us that the average consumer has really changed their shopping habits. Before the pandemic, a tiny fraction of the population bought their food from an online grocer. During the first two weeks of November, according to Angus Reid, 15% of Canadian households bought food online. This proportion reached 19% in the fall of 2020, an unprecedented high so far. The decline is not huge, and consumers are increasingly enjoying online shopping. For applications like UberEats, DoorDash Where SKIP, the rate of use every two weeks reaches 25%. In other words, a quarter of the population uses a phone application at least once every two weeks. Here is a lot of traffic online. Indeed, the home service occupies an important place, not negligible.
On this front, Loblaws is lagging behind. The chain announced that its online sales would exceed $ 3 billion for the current year. For number one in food, the news is worrying. The cybernetic food pie chart could reach 10 billion next year in Canada. Sobeys, number two in Canada, is working to expand its e-commerce service. Lo and behold, it started door-to-door delivery from its state-of-the-art distribution center in Toronto last year, and plans to open facilities in Montreal in early 2022 and Calgary in 2023. Walmart and Costco are trying. also to take their respective places, and we all know what Amazon can do.
In addition, last week, Loblaws announced the closure of three stores and the conversion of 17 others. With the demographic shift and the economic upheavals caused by the pandemic, it’s a safe bet that these figures are gross underestimates.
The store portfolio of major brands will undergo significant changes in the coming months.
While the greats of food distribution are trying to better understand a market in transition, catering has certainly not had its last word. The food service sector is struggling to recover from a pandemic that has devastated the sector. Basically, we have lost between 17,000 and 20,000 restaurants with service since March 2020. But even without a pandemic, losing 10,000 establishments in almost two years is not entirely trivial. Only 20% of restaurants survive the first five years of operation. But many who have left the sector will return and appropriate a new post-pandemic market that is gradually becoming clearer. Foodservice, one of the most resilient sectors of our economy, should never be underestimated. Restaurant owners will try to get our money at home instead of waiting for us in their dining room, that’s all!
In short, if in the past inflation was at the service of the big grocers of this world, this may no longer be the case today. Despite strong food inflation, competition is redefining itself for the big brands, which will have to be creative to reassure their shareholders.
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