Could social distancing create a long-term shift for the grocery industry?

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Canadians have been urged to stay at home to help curb the spread of the new coronavirus – and for many people that has meant staying away from grocery stores, prompting a surge in e-commerce orders for food and other essential items that may have long-term consequences for shopping habits.

“We don’t have a crystal ball, but what we have seen is that online grocery is really a habit to be built – when customers try it, they usually stick to it,” said Walmart Canada’s executive vice-president of e-commerce, Alexis Lanternier. Amid public-health messages about the need for social distancing, the company has seen record numbers of online orders, for both delivery and pickup.

According to Fresh City Farms, which operates a local delivery service in the Greater Toronto Area, some people are hesitant to adopt such online services because they prefer to pick out their own products. That’s especially true for fruits and vegetables and meat and cheese, which many customers like to see and touch to gauge freshness.

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“That’s something we hear a lot, as a barrier to consideration for getting your groceries delivered – that they want to pick their own,” said Fresh City’s chief marketing officer, Jenn Hay. ​The company tries to overcome that by offering customers a satisfaction guarantee: If anything arrives on their doorstep that does not meet their standards for quality, that item will be refunded.

Ms. Hay predicted that people may become accustomed to the convenience of home delivery, but some will want to return to stores once they have the freedom to shop safely again.

“I suspect there will be more of a blend between e-commerce and in-store [shopping],” she said.

Until now, grocery e-commerce has mostly been a niche offering in Canada, with the vast majority of purchases still made in stores. It has generally been touted as a more convenient option, but COVID-19 has changed people’s relationships with grocery stores, and e-commerce now has another marketing angle: safety.

A survey of 1,015 Canadians conducted by Dalhousie University researchers found that, as of March 23, 47 per cent of people were avoiding grocery stores. That means slightly more than half were still going out to shop, even as the dangers of the coronavirus dominated headlines. But the long-term potential for grocery e-commerce is there, said Dalhousie professor Sylvain Charlebois, who researches food distribution, security and safety​.

“Based on some of the data we have, people feel more comfortable going to a restaurant than a grocery store, because they’re aware more than ever that grocery stores are open systems – everybody has access to everything,” Prof. Charlebois said.

The surge in demand for online grocery shopping, however, has exposed the fact that most retailers have not yet built e-commerce operations that can operate on a much larger scale.

Both Metro Inc. and Loblaw Companies Ltd. have appealed to customers who are healthy and able-bodied to continue to shop at their stores – while practising social distancing from other shoppers and staff, of course – so that people who are sick, have mobility issues or are vulnerable to complications from the coronavirus can have access to online ordering. With long wait times for delivery or in some cases a total unavailability of service, many people trying out grocery e-commerce for the first time are finding the experience frustrating.

Grocers have been asking customers to be patient as they ramp up those services.

Instacart, which operates a delivery service in partnership with stores such as Loblaw banners and Walmart in Canada, has seen a huge increase in online orders.

“Our belief has always been that customer adoption will continue to increase and that these brick-and-mortar grocers will continue to serve as the backbone of the grocery industry,” Instacart wrote in a statement. “The recent surge in customer demand has accelerated this adoption and made grocery delivery an essential service.”

But it is also an expensive service. Brick-and-mortar grocery sales in Canada have been affected in recent years by increasing competition in the discount space. When it comes to online grocery shopping, however, not only are there delivery fees – which differ depending on the service – but grocers do not offer the same number of weekly promotions and sales that customers are accustomed to finding in stores.

“[E-commerce] is going to change the culture of promotions … and that’s going to be beneficial for grocers,” Prof. Charlebois said. “Instead of being bargain hunters, we’re going to be thinking about our own safety, while seeking convenience.”

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