Canadian Food Retail 2013
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Canadian Food Retail 2013 -1- Table of Contents Canadian Market Introduction ...................................................................................................................................... 3 Market Shifts: Demographic, Economic, Technology .................................................................................................. 4 Increased Ethnic Diversity ........................................................................................................................................ 4 Aging Population & Health Concerns ....................................................................................................................... 5 Consumer Financial Health ...................................................................................................................................... 6 Urbanization .............................................................................................................................................................. 6 Digital Adoption ......................................................................................................................................................... 6 Grocery Industry Trends: How These Shifts Manifest .................................................................................................. 7 Ethnic Foods & Preferences ..................................................................................................................................... 7 Health & Wellness Initiatives .................................................................................................................................... 7 Emphasizing Value & Convenience ........................................................................................................................... 7 Connecting Digital Shoppers .................................................................................................................................... 7 Closing Considerations ............................................................................................................................................. 7 Identifying Food Competitors Today: Implications at the Channel Level .................................................................... 8 Examining the Market Leaders’ Positions ................................................................................................................. 10 Loblaw ..................................................................................................................................................................... 10 Sobeys ..................................................................................................................................................................... 11 Metro ....................................................................................................................................................................... 11 Walmart Canada ...................................................................................................................................................... 13 Costco Canada ......................................................................................................................................................... 13 Final Thoughts: Considerations for Retailers ............................................................................................................ 14 About the Authors Robin Sherk—Director, Retail Insights [email protected] Robin Sherk is Director of Retail Insights at Kantar Retail, a global insight and consulting company. With offices in more than 15 countries, Kantar Retail brings a superior breadth and depth of analysis to identify retail trends and bring a forward-looking point of view. Robin is instrumental in developing the research and framing analyses within Kantar Retail’s Market Insights division. Her research covers a range of topics, including the Canadian Market, shopper marketing and merchandising trends, and examining lead retailer’s strategies to navigate the increasingly fragmented landscape. She is a trainer for syndicated seminars, providing guidance to numerous Fortune 500 consumer packaged goods companies. In addition to regularly contributing to the company’s publications, she is a quarterly blogger for Canadian Grocer magazine. Alexandra Mansfield—Global Research Manager [email protected] Alex Mansfield, Global Research Manager, manages Kantar Retail’s global data team and research initiatives. Working across Kantar’s worldwide offices, Alex is responsible for the development and execution of Kantar Retail’s global retail data and forecasting research. She and her team also deliver syndicated and analytical content for Kantar Retail’s global products and projects. Bringing experience from multiple industries, Alex has an extensive background in market research and analysis, global markets, data management, and consulting services. -2- Canadian Market Introduction Ranked the 8th highest globally in terms of gross Population Concentration domestic product (GDP) per capita, Canada is one of the Despite its economic heft, Canada’s population is relatively most affluent countries in the world. Its overall GDP is small at 35 million people, according to Statistics Cana- ranked the 12th largest worldwide. Looking ahead, the da’s 2013 estimates . Even with Canada’s massive size, Bank of Canada expects that the country’s net GDP growth second in total area only to Russia , 75% of the population will be modest in 2013, at 1.8%, and then pick up to a pace is concentrated in Ontario, Quebec, and British Columbia of 2.7% in both 2014 and 2015 . (Figure 1). In addition, its economic affluence is spread relatively Upon closer examination, the population centres in a evenly. In terms of income distribution, Canada’s Gini coef- handful of urban areas located predominately within ficient, a measure of income inequality, is behind France, these three provinces. In fact, 43% of all Canadians live on par with the United Kingdom, and ahead of the United in the metropolitan areas of five cities: Toronto, Montréal, States . Accordingly, the Canadian consumer landscape is Vancouver, Calgary, and Ottawa-Gatineau . Viewed broadly, widely middle class with strong purchasing power. Cultur- 81% of Canadians lived in urban areas by 2011, a slight ally, Canadians tend to celebrate their egalitarian nature. uptick over the 80% who lived in urban areas in 2006 . Contradicting historical stereotypes, Canadians are a rela- tively urban consumer audience. Figure 1. Proportion of Canadian Population by Province Source: Statistics Canada – 2013 estimates, Kantar Retail analysis -3- Market Shifts: Demographic, Economic, Technology Examining the trends shaping the shopper landscape of immigrants over the past 30 years and accounted for first requires consideration of the overarching demo- 56.9% of the inbound population between 2006 and 2011. graphic, economic, and technology shifts. Pulling out the The Philippines was the top country of origin during this key forces, Kantar Retail has identified the following five period, followed by China and India, respectively. Other drivers influencing Canadians today: major countries of origin from this region include 1. Increased Ethnic Diversity Pakistan, Iran, and South Korea. Steady population 2. Aging Population & Health Concerns inflows from Africa, the Caribbean, and the Central/ 3. Consumer Financial Health South America regions have also increased over the past 4. Urbanization five years. Leading countries of birth in these regions 5. Digital Adoption include Algeria, Morocco, Nigeria, Colombia, Mexico, and Haiti (Figure 2). Increased Ethnic Diversity Canada is an extremely diverse marketplace, with one of Canada’s immigration population is heavily concentrated the highest immigration rates in the industrialized world . in urban centres: over 90% of immigrants live in one of Immigration has contributed to a large portion of popula- Canada’s census metropolitan areas (versus roughly tion growth in recent decades and is expected to account 63% of total Canadian-born residents). The three largest for almost 80% of growth by 2030. 2011 National House- metropolitan hubs—Toronto, Vancouver, and Montréal— hold Survey data indicates that one in five (20.6%) Cana- are home to almost two-thirds of the immigrant popula- dian residents were born outside of the country. tion, with Toronto retaining the highest concentration of foreign born, followed by Vancouver and Montréal, respec- Immigration over the last few decades has transitioned tively. However, smaller census areas, including Winnipeg, away from a predominantly European-based influx toward Saskatoon, Edmonton and Calgary, have also observed an more ethnically diverse immigration patterns. Asia uptick in immigrant migration in the last five years. (including the Middle East) has been the largest source Figure 2 Immigrant Region of Birth by Period of Immigration – Canada 100% 90% Oceania & Other 80% 70% Asia & Middle East 60% Europe 50% 40% Africa 30% 20% Caribbean, Central & South America 10% United States 0% Before 1971 to 1981 to 1991 to 2001 to 2006 to 1971 1980 1990 2000 2005 2011 Source: Statistics Canada National Household Survey (NHS), 2011 -4- Market Shifts: Demographic, Economic, Technology Within the three largest metropolitan areas, the compo- Figure 3. Historical & Projected Aging Population—Canada sition of immigrants differs.