In 2019, the online sales of e-commerce giants Amazon and Walmart in Canada together made up more than 350 million U.S. dollars in the food and personal care segments. Yet, despite the promising potential of online grocery retail, the share of independent retailers offering online ordering in the grocery market in Canada remained low. However, as the global economy entered into lockdown and business moved to the digital realm with the outbreak of COVID-19, the pandemic created a pivotal opportunity for the online grocery market in Canada.
The share of Canadians who shopped online for groceries increased from a mere five percent in 2016 to 17 percent in 2020. Between February and April 2020, food and beverage stores experienced a 107 percent increase in e-commerce sales in Canada. The surge in online sales was not limited to grocery retail only but affected all retail sectors in the wake of the coronavirus outbreak. There was a marked shift in shopping location preference among Canadian shoppers surveyed in June 2020, who favored online shopping over in-store shopping for all categories including apparel, household items, and grocery.
The pandemic has given good reasons for Canadian shoppers to switch to e-grocery, with around 25 percent of Canadians citing coronavirus risks as one of the leading reasons to buy groceries online. Another 65 percent of Canadian shoppers expressed concern about in-store food shopping during the pandemic. Despite the fact that groceries purchased in-store continued to exceed online purchases by a significant margin in 2020, the underlying trends that took shape during the pandemic are here to stay. For example, over 10 percent of Canadians aged between 18 and 54 plan to order food online more regularly even when the pandemic is over. Such developments present an exceptional growth opportunity for the online grocery market in Canada.