Loblaw expanding online grocery business across the country

The Canadian Press</span>
Published Wednesday, May 2, 2018 7:29AM EDT
Last Updated Wednesday, May 2, 2018 12:13PM EDT

Canada's largest grocer plans to "blanket the country" with online grocery services, including home delivery, this year, said Loblaw Companies Ltd. CEO.

Loblaw, which launched home delivery services in its first market late last year, will expand the offering to five more areas this year. Shoppers in Montreal, Halifax and Regina will be among those who can try the new service. It is currently available in 11 markets, including Toronto and Vancouver.

The retailer also plans to expand its click-and-collect program, which allows customers to order groceries online and pick them up, with 500 new pick-up sites this year. By the end of 2018, the retailer aims to have more than 700 pick-up locations. These will include additional grocery stores and Go Train stations in Ontario, as well as several Shoppers Drug Mart locations -- with the first several expected in the coming weeks.

The company is looking for ultra-convenient pick-up spots for customers, said Galen G. Weston on a conference call with analysts after the company released its first-quarter earnings report.

By the end of the year, 70 per cent of Canadians will have access to the company's click-and-collect and home delivery services, the company said.

Canadian grocers have recently started to focus heavily on their e-commerce offerings, including home delivery options, after tech titan Amazon acquired Whole Foods Market and its Canadian locations last year.

Sobeys Inc. announced earlier this year that it signed a partnership deal with British company Ocado Group to help build its online shopping business. It plans to build a customer fulfillment centre in the GTA and launch the service in about two years.

Loblaw is relying on a different model, partnering with California-based Instacart to provide delivery services. Shoppers use the Instacart website or app to order food from participating Loblaws and other chains. Instacart picks up and delivers the orders.

The company also looked at a central fulfillment model, Weston said, but feels very confident on the path it's on.

"The thing is, none of us can really predict, you know, where things are going to end up," he said, adding it's a little bit of a fool's errand.

The announcement came as Loblaw raised its quarterly dividend to 29.5 cents per share from 27 cents per share and reported improved quarterly earnings.

Loblaw earned a profit attributable to common shareholders of $377 million or 98 cents per diluted share on $10.37 billion in revenue for the quarter ended March 24. That compared with a profit of $232 million or 58 cents per share on $10.40 billion in revenue in the same quarter last year.

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