Cancel OK

Canada’s retailers try to overcome ‘Big Three’

Like its wholesale scene, Canada’s supermarket sector remains ferociously competitive as independents, national chains, and big-box stores battle it out for market share.

However, a trio of grocery goliaths continue to dominate.

Known as the “Big Three,” Sobeys, Loblaw, and Metro rule the roost in most Canadian provinces.

“These three chains still dominate in this area,” said Fulton Hamill, president of Fulton Hamill, Ltd. in Albany, PE. “Whichever one is having a big sale at the time seems to get more business than the others.”

Walmart Canada, which operates 410 stores across the country, is attempting to give the Big Three a run for their money. As the retail giant continues to attract Canadian shoppers with rock-bottom prices, mobile scan-and-go technology, and online grocery pickup services, Walmart’s net sales in the True North are on the rise.

Independents Hold Their Own
In Alberta, Roy Hinchey, CEO of Thomas Fresh Inc., says Walmart, Loblaw, Costco, Sobeys, and Federated are leading the pack.

“Alberta’s retail marketplace is chain-store orientated, compared to somewhere like British Columbia where there is larger demand for smaller, independent grocers,” he said. “Alberta presents an opportunity for big-player retailers to grow.”

Even so, Hinchey said a few independent retailers have found and successfully maintained their niche in Alberta.

“Health-focused grocers such as Sunterra, Blush Lane Organic Market, and Community Natural continue to perform well,” he said. “We also saw ethnic produce retailers like Lucky Supermarket open up a new location in 2018.”

According to George Pitsikoulis, president of Canadawide Fruit Wholesalers Inc., Montreal has always had a strong representation of independent retailers.

“In other parts of North America, chain stores have a very dominant position with few independents,” he said. “But here in Montreal, independents are maintaining their share.”

Ron Lemaire, president of the Canadian Produce Marketing Association (CPMA) in Ottawa, ON, points out that independents are still holding their own, particularly in small towns across Canada.

“In physical stores, the box-big store chains continue to grow and hold the market share, but independent retailers remain an important part of the fabric of the grocery business,” he said.

“For every city in Canada, there are four or five small towns, many of which cannot support a big-box store,” Lemaire said. “In those areas, independent retailers are not only beneficial but necessary to the town’s business and infrastructure.”

The Pace of Change
From the Big Three to Walmart to independents, Lemaire said the grocery retail landscape in Canada is evolving rapidly.

“Retailers have been working to implement and promote online sales of fresh produce to meet buyers’ demands for ease of purchase,” he said.

“Early adopters are engaged,” Lemaire said, “while many consumers are still skeptical of the quality of fresh produce purchased online. As the annual growth of online grocery sales increases, we can expect to see online fresh fruit and vegetable sales increase as well.”

In Canada’s ultra-competitive retail sector, David Karwacki, CEO of Star Produce Ltd., headquartered in Saskatoon, SK, said he believes it’s all about offering consumers the best flavor.

“People want great-tasting product, they want it delivered at the right time, and they want it according to their specifications,” Karwacki said.

“Whether you’re big or small, whether you have wide distribution or are a small, local player,” he puts forth, “the retailers who are executing on these things are the ones that are winning.”

This is an excerpt from the most recent Produce Blueprints quarterly journal. Click here to read the full supplement.