One of the main challenges facing la Place—like the United States’ largest wholesale terminal, Hunts Point in New York—is the decision of whether to rebuild its aging buildings or relocate to another larger, more modern facility. Estimates on the cost of la Place reconstruction fall between $50 to $60 million and a relocation bid back in 2011 came in at $47 million. A more contentious issue is funding: as most of the burden for either project would fall onto current tenants.
In response to this challenge, some tenants have already relocated and upgraded facilities on their own. Canadawide, for example, moved several years ago, back in 2013, to a new centrally-located distribution center.
Sylvain Mayrand, co-president of Global M.J.L. Fruits et Legumes Ltd., also opted for a warehouse a few blocks away from the central market. “Most importers in our city have now moved into facilities that they own outright.” Independent facilities provide owners with plenty of options for customization, and to better adapt for tighter food safety measures. As Mayrand puts it, wholesaler-owned properties “allow our businesses to plan forward, which terminals do not.”
Grocery Wars
Turning to the escalating grocery war, U.S. behemoth Walmart continues to gain market share from Canada’s domestic competitors, such as Sobeys, Provigo (formerly Loblaw in Quebec), and Metro Inc. Sobeys for one is fighting back—against Walmart and others—by lowering prices. The retailer slashed prices by 5 to 7 percent on up to 8,500 grocery items to compete more effectively with its rivals.
In an interesting turn of events, Metro Inc. was recently named the second best-performing public grocery chain in North America behind U.S.-based Kroger Company. Citing a 2016 investment report, Canadian Grocer touted homegrown favorite Metro as matching Kroger in what it considered the true measure for success: discipline.
As competition between Canada’s big supermarket names continues to heat up, many are watching Metro as it holds its own against both Sobeys and Provigo, as well as discounters like Walmart and Costco in Quebec. In addition, there is also rising pressure from the dépanneurs and higher-priced specialty shops, creating a hypercompetitive retail environment in the province.
One way Metro is hedging its bets is with online shopping. Though most Canadians have not embraced online grocery shopping (less than 4 percent of online purchases were for food or groceries from a sampling of 1,000 respondents, according to a Canadian Grocer survey)—and far fewer buy fresh produce—Metro believes its new ‘fast and fresh’ service will be different.
Rolled out in Quebec last October, the bilingual service offers either in-store pickup within a designated area or home delivery. And while Metro is a newcomer to online shopping—both Loblaw and Sobeys have had such services for some time, as do Costco, independents, and providers without physical stores like Grocery Gateway—the grocer has high hopes for its success, especially with younger shoppers.
