In its second-largest acquisition, Amazon buys the company for $970 million.
Loblaw, a Canadian grocery chain, plans to pilot a ‘click and collect’ program for groceries to challenge Amazon and Wal-Mart.
Canadian grocery store Loblaw Companies Ltd. plans to test a program that allows consumers to order and pay for groceries online and then pick them up in a store. This is the first move into e-commerce for Canada’s largest grocery chain. Three stores in Toronto will take part in the pilot.
“We believe that this model, which is popular in Europe, will provide busy customers a convenient and seamless in-store and online shopping experience,” a company spokesperson says. “The model will allow customers to shop for their groceries online and pick up in-store at a convenient time for them.”
The move could pit Loblaw against Amazon.com Inc. and Wal-Mart Stores Inc. with a slightly difference model. Amazon’s Canadian e-commerce site, Amazon.ca began selling groceries at the end of 2013 in the Canadian market. However, while Amazon.ca’s grocery store sells more than 15,000 dry food items and fresh flowers, it doesn’t offer fresh food, which Loblaw says it plans to focus on with its pilot. Amazon has not revealed plans to offer its fresh food in the Canadian market.
Wal-Mart Stores Inc. presents another challenge for Loblaw. Canadian web sales for the world’s largest retailer increased 145% in the fourth quarter of 2013 compared to 2012. Wal-Mart sells fresh food in its Canadian stores, but its e-commerce site does not offer fresh food. Canada Post announced in 2013 it would test same-day delivery for e-retailers such as Wal-Mart, Best Buy and Indigo Books. That test did not include fresh food.
If Loblaw’s test proves successful, it may soon be able to leverage its large retail footprint, which grew larger in March when it acquired Canada’s largest pharmacy retailers, Shoppers. The retailer plans on stocking those newly acquired outlets with fresh produce and groceries.