Significant structural changes are occurring in the Canadian grocery space. This podcast explores the key factors that influence consumer choice of food retailer, how consumers are dealing with the rising pace of food price inflation, the rise of online grocery offerings, and how the shifts in consumer/retailer interactions will change how we buy groceries.
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E-grocery: From inflection to entrenched
COVID-19 marked an inflection point in how Canadians approach shopping for food. Increasingly we are moving to a world of flexible shopping patterns and last mile solutions. The results of our recent consumer survey on Canadian food shopping behaviour indicate that although consumers continue to overwhelmingly buy food in-store, COVID shutdowns were the trigger for a surge in online grocery. Consumers like the flexibility of being able to buy what they want, how and when they want it. Our survey respondents are largely satisfied with the e-grocery experience, and intend to keep buying groceries online.
Rapidly rising food prices are causing changes in consumer shopping behaviours
Consumers are acutely aware of rapidly accelerating food prices, and are responding by actively seeking value in their baskets: shopping around for best deals, whether by switching channels, banner or brands, paying more attention to weekly flyers, buying more private label products, and limiting the buying of food away from home, both in restaurants and with take-out.
Loyalty programs: Digital interactions are key
The digital realm is becoming increasingly important in the decision chain for Canadian food shoppers. Consumers are also placing increasing emphasis on the value of loyalty programs, with 85% of food shoppers we surveyed noting that loyalty programs influence the choice of grocer in both bricks and mortar and online, and consumers overwhelmingly finding relevance in weekly targeted promotions. And increasingly, consumers are accessing promotions digitally, with less than one-quarter of consumers remaining loyal to the static, one-size-fits-all printed weekly flyer.
Combining physical spaces and digital tools
Although freshness and value remain fundamental to the food shopping journey, consumers are looking to combine both physical spaces and digital tools in a seamless way to address various need states, with the most successful retailers being those who can engage with consumers on a personal, emotional level.
André-Philippe Hardy
Head of Canadian & APAC Research
André-Philippe Hardy is Head of Canadian & APAC Research at RBC Capital Markets, a premier investment bank that provides a focused set of products and services to corporations, institutional investors and governments around the world. RBC Capital Markets’ Canadian equity research team is consistently top-ranked by institutional investors, as per the Brendan Wood International, Greenwich and Institutional Investor surveys. Prior to becoming Head of Canadian Research in November 2013 (he was appointed Head of APAC Research in November 2019), André led RBC Capital Markets’ Canadian financial services Equity Research team for six years, with direct coverage of banks and insurance companies. Throughout his career as an equity analyst, Andre was ranked consistently as a top analyst in his sectors in industry surveys, while his stock-picking success was validated by his StarMine rankings and his work was often quoted in the financial press. His primers on banking and insurance were unique products, which were widely read by investors as well as management teams. Andre joined RBC Capital Markets in 2007 after almost a decade in the equity research departments of Merrill Lynch Canada and TD Securities.
Irene Nattel
Canadian Consumer Analyst
Irene is a Managing Director of RBC Capital Markets. With more than 30 years of experience, Irene has gained a reputation as the analyst to watch in the consumer staples and consumer discretionary sectors. She joined RBC Capital Markets in 1995 and the quality of her work has resulted in Irene being recognized as a top-ranked analyst in surveys of institutional investors and corporations. Irene started her career in 1986 at Levesque, Beaubien, Geoffrion (now National Bank Financial), then spent five years at BZW Canada, where in addition to her research responsibilities she was Manager of the Montreal Institutional Equity Department. Irene has been an active volunteer in community work throughout her career, including as Chairman of the Board of Montreal’s largest philanthropic organization.
