Recent Trends in Alberta's Grocery Retail Sector

  From the July 9, 2018 Issue of Agri-News
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 The latest issue of Trends in Retail has been released. Jeewani Fernando, provincial consumer market analyst with Alberta Agriculture and Forestry, takes a closer look at the grocery retail sector in Alberta and its impact on specialty food retailers and suppliers.

Fernando says that Statistics Canada data shows in the past couple of years, the performance of the grocery retail sector in Canada was not at its best. “Economic conditions in the country as well as number of other factors were behind this situation, with the impact felt stronger in some provinces than others.”

Alberta grocery sales began to slow down after 2014 and bottomed out in 2016. “However,” says Fernando, “Sales appear to have turned around in 2017, reporting a very slight increase of 0.06 per cent. While traditional grocery stores are struggling to increase sales, specialty food stores have been doing well in Alberta. Their average growth rate has been about 8.5 per cent over the past seven years."

Fernando adds that growth trends indicate there are opportunities for speciality stores. “With changing consumer lifestyles and their food purchasing behaviours, we see a rise of new retail formats and health-oriented food and services. Many of these new formats are smaller speciality stores, and they are offering a range of natural, organic, speciality, and better-for-you products. In this space, Alberta specialty food suppliers and retailers have opportunities to provide innovative and new healthy food products.”

"Along this line,” says Fernando, “We see a huge demand for convenience, given the changing lifestyles of consumers, and we know there is a big shift towards snacking. Also, big grocers are overhauling their formats to offer a food service like atmosphere. Here, we see some opportunities for speciality retailers to supply snack products and/or ready-to-eat type food products. They also can adopt co-branding strategies with big retailers.”

The other big opportunity lies in e-commerce or online shopping space. Explains Fernando, “Grocery e-commerce is in its infancy in Canada, accounting for just two per cent of Fast Moving Consumer Goods (FMCG). However, it is expected to grow from $2.7 billion annually to $6 billion by the end of 2020.”

“This online space also helps specialty retailers reach consumers easily and allows them to offer unique products, which sets them apart from mass merchandisers,” says Fernando. “Specialty retailers may develop stronger relationships with big brick and mortar retailers. As big retailers expand their product assortment online, specialty retailers can take advantage by supplying a range of food products to those big grocers.”

The biggest challenges for specialty retailers are coming from mass merchandisers and discount stores. Says Fernando, “Specialty retailers may compete with either pricing strategies or private brand development strategies. Specialty retailers can differentiate themselves from these low-price retailers by shifting upmarket and offering premium food items. They can also collaborate with big retailers to supply their private label products.”

For more information about Trends in Retail, contact Jeewani Fernando at 780-415-9773.

Jeewani Fernando

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For more information about the content of this document, contact Jeewani Fernando.
This document is maintained by Christine Chomiak.
This information published to the web on June 25, 2018.