Walmart Inc. (NYSE: WMT) is poised to beat archrival Amazon.com Inc. (Nasdaq:AMZN) in enabling Metro Vancouver customers to order online and get produce and fresh meats, as well as other grocery items, delivered anywhere in the region.
Neither, however, is the local pioneer in this fast-growing niche that analysts believe will soon provide a significant slice of grocers’ revenue.
The Jim Pattison Group’s Overwaitea Food Group launched online ordering and delivery more than two years ago, and, on February 15, Loblaw Cos. Ltd.’s Real Canadian Superstore and T&T Supermarket brands launched delivery via an app from American grocery-delivery giant Instacart.
Other Loblaw brands such as No Frills, Your Independent Grocer and Loblaws City Market do not offer local delivery, while competitors such as Sobeys Inc.’s Safeway and H.Y. Louie Co. Ltd.’s Marketplace IGA deliver only if the customer has selected the groceries in-store.
Amazon, like Walmart, has long delivered packaged and non-perishable food as well as household goods across Metro Vancouver.
Amazon bought upscale grocer Whole Foods Market for US$13.7 billion last year but has yet to equip any of Metro Vancouver’s five Whole Foods stores with online delivery. Some of the local Whole Foods stores deliver in parts of Metro Vancouver. The stores that deliver require customers to email or phone in their orders, Whole Foods told Business in Vancouver.
Walmart, in contrast, is launching a same-day grocery-delivery service this summer that will include perishable items and be part of a partnership with a subsidiary of Vancouver’s Sustainable Produce Urban Delivery (SPUD), Food-X Urban Delivery Inc.
(Image: Groceries sit on shelves at the Walmart on Grandview Highway in Vancouver | Rob Kruyt)
Food-X is leasing a 74,000- square-foot warehouse in Burnaby that Walmart has agreed to primarily occupy with its own products for at least the next five years, said Daryl Porter, Walmart Canada’s vice-president of online grocery.
He said his company will offer the lowest prices in the region for grocery delivery when the cost of the order plus any possible delivery fee is combined. Walmart, which is the world’s largest bricks-and-mortar retailer, has not yet determined whether Metro Vancouver orders will have a delivery fee, Porter said.
“Every city is different in its makeup and its Walmart real estate portfolio, in the density of customers and the type of customer,” he said before explaining that, in Toronto, Walmart’s recently launched grocery delivery is done by employees, who select products from Walmart stores. Parts of the Greater Toronto Area are not eligible for delivery.
In contrast, Walmart’s partnership with SPUD enables it to deliver throughout the entire Metro Vancouver region.
Overwaitea president Darrell Jones sounded miffed at the prospect that Walmart would not charge a delivery fee.
(Image: Overwaitea president Darrell Jones sorts through produce at a Save-On-Foods store | BIV files)
“There’s nobody in the world that can do it without charging fees,” said Jones, whose company charges varying fees of up to $9.95. “It costs a lot of money to deliver groceries to somebody’s home.”
Jones believes that, regardless of what Walmart charges, Overwaitea’s competitive advantage is its food quality and value.
Overwaitea’s website asks customers how ripe they want their bananas and avocados, and then staff picks groceries from Save-On-Foods store shelves closest to the customer.
Products are then delivered by Overwaitea drivers in dozens of Metro Vancouver-based trucks, which have refrigerated and freezer sections.
Those drivers require the customer to be present to accept the groceries, with the result being that Overwaitea has custody of the food until the groceries are passed to the customer.
“If you leave groceries unattended on the step, what happens if it waits there too long?” Jones asked. “Food can spoil. You can have all sorts of problems.”
Instacart, in contrast, allows customers, when they make the online order, to leave a note to specify where drivers should leave the order, said Instacart’s general manager for Canada, Andy Anthony.
His company launched in Canada with Toronto deliveries for Loblaw in December, and it has rapidly been contracting grocery pickers – people who operate much like Uber drivers in that they work when they want and are paid based on the online orders they fulfill.
For Real Canadian Superstore and T&T Supermarket, contracting out the grocery-picking work to Instacart makes sense because it does not impact existing operations.
Instacart’s contracted grocery pickers are sent notifications on their smartphones when there is an order to fulfil. They come into the store, pick the groceries, pay for the groceries at the regular retail price and then transport the groceries in insulated bags in their own vehicles.
“We didn’t consider doing [the grocery picking and delivery] ourselves,” Loblaw’s senior director of digital marketing, Lauren Steinberg, told BIV.
“We really wanted to start with a great partner.” •
Here is how Metro Vancouver grocers stack up when it comes to delivery of fresh groceries, including produce and meat:
Save-On-Foods:
•delivery possible across Metro Vancouver
•fees range up to $9.95
•can be same-day
•has been delivering groceries more than two years
Real Canadian Superstore (through Instacart app)
•delivery possible in parts of Metro Vancouver
•$7.99 for orders under $35; $3.99 for orders above $35
•same-day delivery
•Deliveries launched February 15
T&T Supermarket (through Instacart app)
•delivery possible in parts of Metro Vancouver
•$7.99 for orders under $35; $3.99 for orders above $35
•same-day delivery
•Deliveries launched February 15
Whole Foods Market
•delivery possible in parts of Metro Vancouver
•no online ordering, orders must be sent by phone or email
•$10 fee
•Delivery within a four-hour window
Safeway
•delivery possible if customer has chosen items in store
•$10 fee
•May be same-day
Marketplace IGA
•delivery possible if customer has chosen items in store
•Free delivery for orders more than $50
•May be same-day
Stongs Market
•delivery possible in parts of Metro Vancouver
•$10.99 and minimum orders must be $50
Thrifty Foods
•delivery possible in parts of Metro Vancouver
•$7.95 fee and minimum orders must be $50
Choices Market
•delivery possible for some items but not perishables
•Free shipping over $70
No Frills
•No delivery
Your Independent Grocer
•No delivery
