The grocery industry is changing. Retailers have been feeling the pinch from the push to online sales for years now, resulting in store closings, a spike in online sales and the development of systems to support them, and naturally, the loss of jobs.
Up until recently, the grocery industry hasn’t really felt the same pinch. There has been a lot of movement in recent months from Canada’s top grocery retailers. That movement is leading to a shift for Canada’s grocery industry into something that starts to look and feel a bit different to consumers when visiting the grocery store to purchase their week’s groceries.
Canada’s largest employer, Loblaws, recently announced that they will be closing 22 of their lowest-performing stores to focus more of their efforts on online grocery sales. This will result in a loss of about 500 corporate and store support positions. Loblaws also reported that the new increases in the minimum wage will cost the company an additional $190M in 2018.
Sobeys is Canada’s second-largest grocery retailer and is also making moves to transform their business by cutting about 800 office jobs across Canada. The move is in support of Sobey’s $500M cost-cutting plan, Project Sunrise. This move will not affect front-line store workers or staff at distribution centers for the time being, but will instead allow Sobeys to become agiler as Canada’s grocery industry settles into its next phase of business.
When looking at both instance above, Canada’s largest grocery retailers are looking at online grocery sales. Currently, online grocery shopping makes up a relatively small portion of total grocery sales in Canada. “The annual retail food market of almost $100 billion, $80 billion of which is focused on traditional grocery stores.” Total online grocery sales are estimated to be approximately $2 billion but are looking to double within the next couple of years.
When you add in Amazon’s recent purchase of Whole Foods, the turbulence and disruption that is expected in the grocery retail market only increases for Canada’s grocery retailers. Whereas a price war seems to be out of the question, grabbing hold of early grocery shoppers is going to be the priority. Currently, 81% of Canadian consumers state that they prefer to pick out their groceries in person.
Online grocery shopping options will grow if more consumers become interested, but it’s unclear how quickly wary Canadians will embrace them. That being said, grocery retailers need to be ready.
Mindfield wants to send a message to Canada’s grocery retailers. Brick and mortar grocery stores will never disappear, despite the buzz around online grocery shopping. However, a battle for brand recognition and customer loyalty is going to become increasingly important. We are going to start to see various strategies emerge from the grocery space, but one thing remains consistent, people will always be a component of the grocery industry.
It’s time to start thinking about your workforce and the individuals that you employ. The change is coming, if not already here and your workforce needs to reflect the future. It’s time to hire smarter.
This means collecting and learning from your recruitment and employment metrics. It means you need to make sure you are filling positions with not just another warm body, but an employee that is going to excel in the role and has been matched and screened to ensure they are going to be a best-fit.
Mindfield is a Recruitment Outsourcing solutions provider that partners with companies to create powerful hourly workforces. Our solutions combine a recruitment team, simple to use technology and a data-driven hiring strategy that promises to improve the quality of your hourly workforce. This approach focuses on tying business outcomes such as sales performance, tenure, and engagement to the selection, hiring and measurement of quality candidates.