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Customers not yet sold on buying groceries online, but retailers still see revenue opportunity TORONTO — Online grocery sales remain a minuscule part of the food retail landscape, but they could be a good source of added revenue from customers who are making fewer overall trips to the grocery store. The number of times time-strapped consumers have gone to buy groceries at a supermarket has declined seven per cent since 2012, according to the market research firm Nielsen — a “trip compression” total of 175 million store visits, Carman Allison, vice president of consumer insights, told an audience at the Retail Council of Canada’s Store 2017 conference on Wednesday. Retailers prefer that customers visit stores more frequently, because every trip to the store represents an opportunity for impulse buying, bumping up the total size of the grocery basket beyond planned purchases. “We are seeing a decline on overall traffic,” Allison said. “But even though you have fewer opportunities to engage in the store, with digital, you have more opportunities (as a retailer) to engage and interact with the consumer.” Consumer packaged goods bought online currently account for 1.9 per cent of grocery sales in Canada, according to Nielsen, but sales of the goods online are projected to grow at a rate of 20 per cent a year and will account for 5.3 per cent of the market by 2020. Loblaw sees gains in its Shoppers Drug Mart fresh food business Packaged food accounts for just 0.6 per cent of the market currently, below that of health and beauty items, at 1.8 per cent of sales, while non-grocery staples such as pet foods and household paper products account for 3.2 per cent of sales. Some categories are particularly robust: while sales of baby care items have fallen three per cent in stores over the last year, according to Nielsen, they were up 59 per cent online. Sales of paper product sales rose two per cent in stores last year, and 32 per cent online. Erin Young, chief marketing officer at online pharmacy retailer Well.ca, said many consumers first shop at the site for baby care items, but “we then see a real migration into food and then other household categories.” In addition, she said, the site has performed well with niche brands that are too small to be carried at national retailers.
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