In July 2022, PwC Canada released a survey on Canadian shopping habits post-lockdown.
A majority (53 percent) of respondents said they expected to increase their spending in groceries, the highest response for any category. Eating in restaurants and bars and takeout food came in second and third, with 36 percent and 28 percent, respectively, citing those options.
But inflation continues to change consumer shopping habits.
Discount banners are expected to outperform conventional grocers in 2023, according to a report from DBRS Morningstar released in January 2023. Consumers are also expected to cook more at home, negatively impacting the foodservice channel and driving more sales at grocery stores.
The movement to discounters and the propensity to eat at home are already in force.
In a September 2022 study of 5,000 Canadians from Dalhousie University and Caddle, close to a fifth (19 percent) of respondents said they visited discount stores more in the past 12 months, while 11.5 percent visited dollar stores more often.
Nearly 24 percent said they were cutting back on the amount of food they purchase.
Retailers are seeing strength in their own discount tiers in quarterly results, too. Loblaw, for example, has singled out its discount No Frills and Maxi banners as doing particularly well.
Grocery retailers are also converting locations into discount formats.
“It’s not just the big-box stores,” says Sylvain Charlebois, senior director of the Agri-Food Analytics Lab and professor in food distribution and policy at Dalhousie University in Halifax, NS. “Smaller grocers are converting into discount stores, which is interesting.”
This commitment to lower-priced formats indicates retailers are expecting price sensitivity to remain for at least the next few years, he adds.
The Greater Toronto Area (GTA), however, is seeing fewer conversions than the rest of Canada.
“The GTA is fairly competitive,” Charlebois notes. “There are many players and already a lot of discount formats—it’s the discounting capital of Canada.”
THE LOW-COST BATTLEFRONT
To appeal to price-conscious consumers and lure them back from discounters, retailers are highlighting their private label brands, running more promotions, and boosting their loyalty programs.
Charlebois says retailers are “looking for ways to showcase promotions a little more aggressively,” with bold displays, emphasizing loss leaders, and placing discounted products throughout the store.
“They’re showcasing private-label products between aisles,” he explains. “There’s a will to get consumers to be more loyal to store brands.”
Loblaw created a TV ad campaign to jointly promote two of its private-label brands, President’s Choice and No Name, and spotlighted the performance of its value-priced No Name private label as a standout in its recent financial results.
“There has been a shift to price consciousness for parts of the retail landscape that wasn’t as strong before,” says Hutch Morton, senior vice president at J.E. Russell Produce Limited BB #:115731 in Toronto. “I think retailers have focused on ensuring customers can still find what they want at prices they can pay.
“Sitting where we are in the supply chain,” he adds, “has put some pressure on us to ensure we can deliver what our customers need to stock their shelves and meet consumer demand.”
This is an excerpt from the May/June 2023 issue of Produce Blueprints Magazine’s Ontario Supplement. Click here to read the whole supplement.
In July 2022, PwC Canada released a survey on Canadian shopping habits post-lockdown.
A majority (53 percent) of respondents said they expected to increase their spending in groceries, the highest response for any category. Eating in restaurants and bars and takeout food came in second and third, with 36 percent and 28 percent, respectively, citing those options.
But inflation continues to change consumer shopping habits.
Discount banners are expected to outperform conventional grocers in 2023, according to a report from DBRS Morningstar released in January 2023. Consumers are also expected to cook more at home, negatively impacting the foodservice channel and driving more sales at grocery stores.
The movement to discounters and the propensity to eat at home are already in force.
In a September 2022 study of 5,000 Canadians from Dalhousie University and Caddle, close to a fifth (19 percent) of respondents said they visited discount stores more in the past 12 months, while 11.5 percent visited dollar stores more often.
Nearly 24 percent said they were cutting back on the amount of food they purchase.
Retailers are seeing strength in their own discount tiers in quarterly results, too. Loblaw, for example, has singled out its discount No Frills and Maxi banners as doing particularly well.
Grocery retailers are also converting locations into discount formats.
“It’s not just the big-box stores,” says Sylvain Charlebois, senior director of the Agri-Food Analytics Lab and professor in food distribution and policy at Dalhousie University in Halifax, NS. “Smaller grocers are converting into discount stores, which is interesting.”
This commitment to lower-priced formats indicates retailers are expecting price sensitivity to remain for at least the next few years, he adds.
The Greater Toronto Area (GTA), however, is seeing fewer conversions than the rest of Canada.
“The GTA is fairly competitive,” Charlebois notes. “There are many players and already a lot of discount formats—it’s the discounting capital of Canada.”
THE LOW-COST BATTLEFRONT
To appeal to price-conscious consumers and lure them back from discounters, retailers are highlighting their private label brands, running more promotions, and boosting their loyalty programs.
Charlebois says retailers are “looking for ways to showcase promotions a little more aggressively,” with bold displays, emphasizing loss leaders, and placing discounted products throughout the store.
“They’re showcasing private-label products between aisles,” he explains. “There’s a will to get consumers to be more loyal to store brands.”
Loblaw created a TV ad campaign to jointly promote two of its private-label brands, President’s Choice and No Name, and spotlighted the performance of its value-priced No Name private label as a standout in its recent financial results.
“There has been a shift to price consciousness for parts of the retail landscape that wasn’t as strong before,” says Hutch Morton, senior vice president at J.E. Russell Produce Limited BB #:115731 in Toronto. “I think retailers have focused on ensuring customers can still find what they want at prices they can pay.
“Sitting where we are in the supply chain,” he adds, “has put some pressure on us to ensure we can deliver what our customers need to stock their shelves and meet consumer demand.”
This is an excerpt from the May/June 2023 issue of Produce Blueprints Magazine’s Ontario Supplement. Click here to read the whole supplement.
