E-commerce giants versus national players
In Canada, Walmart and Amazon were the most popular online retailers of groceries and beverages in 2023. As a global online marketplace, Amazon could offer consumers a greater merchandise variety. The sheer number of SKUs of packaged food offered by Amazon significantly overshadowed that of its competitors. However, after registering three-digit growth rates in e-commerce sales in 2021, the Canadian division of Walmart witnessed declines in its e-commerce net sales in 2023.National grocery retailers like Loblaws, Metro, and Real Canadian Superstore are catching up to the cut-throat competition from global e-commerce powerhouses. Quarterly data from Quebec-based retailer Metro shows a whopping 116-percent increase in online food sales in the fourth quarter of 2023, and a simultaneous decrease in its food basket inflation during the same period.
How did food inflation impact online grocery shopping in Canada?
In 2022, both online and offline shopping behavior were impacted by exogenous market shocks. Still reeling from the impact of the COVID-19 pandemic, global supply chains were dealt a further blow with Russia’s invasion of Ukraine in February 2022. That year, rising prices for groceries and products being out-of-stock were the main issues impacting shopping behavior among consumers in Canada. With some 59 percent of online shoppers in Canada reporting being affected by rising grocery prices in June 2022, this figure surpassed that of many other countries on the global scale.After experiencing a steep increase and stubbornly remaining in the double-digit territory until January 2023, Canada’s monthly food inflation rate eventually began to decrease, reaching 8.3 percent as of May 2023. Many Canadians have reported changing their purchasing habits due to increasing food prices. For example, around 46 percent of Canadian shoppers reported switching to cheaper, lower quality brands in response to food price inflation in the country.
