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Industry NewsLoblaw may be teaming up with Instacart on grocery home delivery deal

Loblaw may be teaming up with Instacart on grocery home delivery deal


Friday, September 29, 2017

Loblaw Companies Ltd. says it’s exploring the possibility of offering grocery home delivery, and that it has “engaged” a number of e-commerce innovators around the world, including Instacart.

Loblaw spokesman Kevin Groh said in a statement that the company is continuing to explore the best ways to serve its customers in the future, and that may include home delivery, according to a Canadian Press report. Loblaw already offers a click and collect program, where customers order their groceries online and pick up the items at a store’s parking lot within a pre-selected time frame.

The statement came after the Wall Street Journal reported that Instacart is close to a deal to partner with Loblaw to launch its service in Canada in the coming months. It would be the startup’s first foray amid increasing competition, the news report says. The deal will allow Instacart to begin delivering groceries from Loblaw stores in Toronto and then expand nationally throughout the grocer chain over the next year, a source told the Journal.

Instacart already has delivery deals with well-known U.S. retail chains, including Whole Foods, Costco Wholesale Corp. and Target Corp., where the startup relies on contract employees to pick and bag groceries and then deliver them to customers’ doorsteps.

Instacart, which operates in 38 U.S. states, had considered expanding into Canada for the past three years. Then Amazon’s Whole Foods deal in June jolted the food retail industry and accelerated Instacart’s talks with three national grocers, including Loblaw, the news report says.

Instacart will face strong competition in Canada.  Longo’s Grocery Gateway service has been a long-standing success in the Greater Toronto Area, and Amazon is planning to rollout its one- and two-hour Prime Now membership delivery service into Canada later this year. Earlier this month, Metro Inc. announced it would focus on online grocery delivery in Quebec, where it will fulfill orders using dedicated teams at 10 stores across the Canadian province.

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