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Amazon Hopes to Cart Off Canadian Grocery Sales

Major retail brands hungry for more international profits have been turning their focus to Canada, leading to an increase in online grocery shopping options for consumers there. Wal-Mart’s early fall foray into selling groceries online there has been swiftly followed by a similar effort from Amazon.com.

Amazon said in a statement they would add online grocery and automotive items sales to its Canadian operation. Like Wal-Mart, Amazon is offering non-perishable grocery goods for sale from its website.

One analyst cited by The Vancouver Sun believes Wal-Mart will suffer against Amazon’s competitive entry; likewise, smaller grocers may feel pressured into offering an online shopping option for their customers.

Such pressure could prove too much for grocers in an industry that already operates on slim margins. Grocery Gateway’s Stephen Tallavi noted that it’s not just thin margins but “you’re putting on top of it a very complex, costly logistical component, and to make it work properly and make a profit is a challenge.”

The entries by these multinational retailing giants comes as Canadians increasingly turn to the Internet for their shopping needs. Canadian government statistics found $18.9 billion in orders placed in 2012. According to Statistics Canada the average Canadian made 13 online purchases and spent about $1,450 that year.

It could be a matter of time before Amazon and Wal-Mart compete not only on non-perishables but on fresh grocery items as well. Both companies have been testing more comprehensive grocery choices and shipping options in the United States, albeit in a select few major population centers.

Hope is not lost for the smaller sellers looking for a grocery-selling niche. One venture called Good Eggs opened in Louisiana, adding to its operations in New York and California. Likewise, Whole Foods has been rumored to be similarly interested in online grocery sales.

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David A Utter
David A Utter
David A. Utter is a freelance writer based in Lexington, KY. He has covered technology topics from search to security to online business and has been quoted in places like ZDNet and BusinessWeek. He considers his appearance on NPR's "All Things Considered" with long-time host Robert Siegel a delightful highlight. You can find him on Twitter @davidautter and on LinkedIn.