Sobeys Begins Testing Voilà With New Ocado Fulfillment Center

Need to Know

• Sobeys has begun testing its home grocery delivery service Voilà this week as the need for online grocery delivery rises due to physical distancing restrictions. 
• To facilitate the service, UK-based Ocado has opened its first-ever North American Customer Fulfillment Centre (CFC) in Vaughan, Ontario. 
• A latecomer to home grocery delivery, Sobey joins key players Loblaws, Metro, and Walmart in Canada. 
• The market is huge–Loblaw’s e-commerce sales topped $1 billion in 2019, nearly double the total from the year prior. 
• According to Business Insider, the online grocery market value doubled between 2016 and 2018, and they forecast that it will continue to surge into Q2 2020 and expect adoption from all demographics. 

Analysis

With the world shifting to contactless service in an effort to curb the spread of the coronavirus, the demand for home delivery grocery is at an all-time high. The market, currently dominated by brands like Walmart, is a lucrative one—in 2018 it was valued at $632 billion. Sobeys and Ocado’s entry into the space represents a milestone moment for both the grocer and the fulfillment tech platform  

Beginning testing this week, Voilà, Sobeys first online grocery home delivery service, will offer an expansive product selection including fresh produce and other common household items at comparative prices. 

“An online grocery home delivery experience like Voilà by Sobeys does not yet exist in Canada,” said Sarah Joyce, SVP of e-commerce for Empire, Sobeys parent company. “While most players in the industry are focused on store pick models to fulfill their online orders, we are building automated warehouses specifically designed for best-in-class home delivery based on a highly successful model from the UK.”

Facilitating the rollout is UK-based Ocado with its first North American CFC. Its first CFC opened in France in March.

“Online grocery home delivery is an essential service – one that’s needed now more than ever before. We are thrilled to bring Voilà by Sobeys to the GTA and do our part to help Canadians in this challenging time,” the company wrote in a press release. 

COVID-19 has had dramatic effects on unemployment rates around the world. Canada lost a record one million jobs in the month of March alone. Empire estimates that the new CFC in Vaughan, Ontario, and any subsequent ones thereafter will create approximately 1,500 new jobs. 

Loblaw, one of the largest grocery chains in North America has seen tremendous growth in its e-commerce. Known for its digital innovation, Loblaws offers a range of delivery and curbside pickup options that cater to the rapidly changing consumer behavior. In February the grocery chain reported $1 billion in e-commerce sales for 2019, nearly doubling its 2018 total. 

Sobeys hopes that its dedicated fulfillment center will be enough to challenge the leaders at the top and provide Canadians with the services they need during these unprecedented times. 

Canadians can expect Voilà grocery delivery to roll out across the Greater Toronto Area as soon as testing is complete.