What does the future hold?
If you were to look back at the power players of the Canadian grocery industry 25 years ago, you might conclude that not much has really changed since then. Oh sure, there has been some consolidation and Walmart has imported their food business from south of the border, but by and large the main players look eerily similar to the way they did a quarter century ago. Loblaw was the main player followed by the multi-provincial chains Sobeys and IGA. There was a slew of regional strength with Metro, Dominion, Safeway and Overwaitea. Since that time, consolidation has left us with three strong homegrown national competitors in Loblaw, Sobeys and Metro, plus some regional players are maintaining strongholds. Rounding out the present landscape is Walmart as they continue their slow, consistent rise in Canada. A little different, but like I said eerily similar.
Let’s play amateur futurist and take a trip to a different time, a time 25 years in the future. Let’s view the grocery industry as it looks in 2042.
May 10, 2042
Toronto (EP) Last night at the annual Virtual International Grocery Retailers Gala, a rousing speech from Khayrat Sisu, the Canadian Chair of the organization, was met with a 10-minute appreciative salute from the audience as they plugged the portal with digital hands, the international symbol for an online standing ovation. The reason for the outpouring of appreciation was the announcement from Sisu that in 2041, Canada became the first country in the world to execute on a GEPID solution. GEPID has been theorized at the boardroom tables of grocery giants for at least a decade but it has never been realized, until now. GEPID is the industry name for a “Grocery Experience that is Perpetual, Intelligent and Delivered”. For a time-starved customer, it means that their every grocery related need can be anticipated, picked and packed, shipped to their house and charged to their account without ever having to think about it, ever again.
As big a night as this was for Sisu, the night was even bigger for Amazon which is the brains behind this incredible new service. Although, Amazon has been the largest grocery retailer on the planet since the early 30’s, they just recently overtook Lidl as the top retailer in Canada and what better way to celebrate than by unveiling the greatest grocery innovation since click and collect. “This is a great moment for Canada”, said a guarded Galen Weston, Executive Chair for Loblaw Worldwide, Canada’s number three grocer. “I mean it’s a little bittersweet that it had to come from a major competitor, but it’s big for our industry in Canada; and Loblaw does have a few tricks up her sleeve that you will soon hear about.” Canadian shoppers will be happy by Weston’s words as Loblaw remains the sentimental favourite for many Canadians. Number one in their hearts, just not their wallets. This is particularly true considering Loblaw is the only one of four major grocery retailers in Canada that started life as a business in Canada. Amazon is American and Lidl is German, while Walmart, the number four grocery player in Canada, originated from the United States.
It is unclear if Weston was referring to a new technology play by Loblaw or the grocer’s long awaited announcement that their shelves would be stocked entirely by sustainable or fairly-traded products. Long considered a niche category, Loblaw has made a name for itself using their extensive assortment of products that have been farmed, raised, produced or otherwise manufactured using practices that do not harm people or the environment. Their anticipated announcement of 100% sustainability is expected to be a turning point for the company that lost its number one status in Canada only 5 years ago. “It’s a market position that neither Amazon, Lidl nor Walmart can realistically follow Loblaw into. Once they arrive, Loblaw will be alone at this party for quite a long time”, says an unidentified retail expert at Execulytics Consulting.
Other notable information on the Canadian grocery industry was unveiled during a 30- minute infographic presentation. Online retailing slightly outpaced on-sight retailing in 2041 with the former growing at 3%, representing 62% of the trade in Canada, while the latter grew at just 1% and shrunk to 38% of the business. In 2041, the Canadian industry also shed its link to an old relic as 20 Walmart stores in northern Canada eliminated the last remaining cash registers in the country. It is now impossible to pay for groceries in Canada using your credit card as all transactions now go through biometric sensors linked to each customer’s personalized treasury.
The final presentation of the evening took a deep look at Generation Alpha’s assault on the grocery industry. Aged between 17 and 32 this group is just starting to influence on-site grocery designs. Stores equipped with kitchen pods are making their way into new stores at both Loblaw and Lidl. Designed to fill a void for young shoppers without access to kitchen facilities, these pods are expected to appeal to the mostly studio apartment dwelling Gen Alphas. And as their future purchasing power increases, online shopping could slow. This generation is already considered responsible for the recent slow down in online sales growth. “By the time Gen Alpha replaces the Gen Z’ers as the sweet spot of grocery consumption, online and on-sight sales could be split 50/50 again, we might even see on-sight overtake online for the first time since the mid 2030’s,” says a futurist for Generation Watch a leading trend analysis company.
By the end of the evening the online audience knew significantly more about the goings on in the Canadian grocery industry in 2042. And many of those same people logged off the gala and started the countdown to 2043.
Is this an accurate depiction of life in the grocery industry in 2042? Who knows? But it is fun to speculate. This type of dream sequencing does introduce a lot of interesting questions. For example, will the players of 2017 survive for the next 25 years or will future Canadian grocery shoppers be serviced by mightier multi-national companies? What does the next generation of online shopping look like and will product selections look different in the future? And what of the shoppers themselves? We know a lot about the Baby Boomers, the Generation X’ers and Millennials. Plus, we are learning more and more about Generation Z all the time. But what’s behind them? Will Generation Alpha shop differently? Will the socio-economic realities of today shape the shopping habits of a generation whose oldest members are just now getting out of diapers? Only time will tell what the future will bring, but as I said, it’s fun to be a dreamer!
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