Sobeys Inc. is the latest Canadian grocer to wade into e-commerce after last year’s arrival of Amazon into the nation’s competitive grocery industry forced incumbents to improve their online offerings.
Sobeys and Ocado Group announced Monday that they have signed a partnership deal for the British company to help build the grocer’s online shopping business.
“Sobey’s intends to play to win in Canadian online grocery shopping,” said Michael Medline, Sobeys CEO, in a statement.
Ocado, which was founded in 2000, will partner exclusively in Canada with Sobeys and provide support and engineering services.
The two will build a customer fulfillment centre in the Greater Toronto Area that is expected to take about two years to construct. The companies said they will consider developing more in other urban areas in the country.
The announcement comes just over two months after Sobeys’ competitor Loblaw Companies Ltd. said it would partner with California-based Instacart to launch home delivery services in Toronto starting Dec. 6 and Vancouver starting this month.
Loblaw did not immediately respond to questions about whether those services have started as planned.
Canada’s grocery industry has been slow to offer home delivery to customers, focusing instead on online ordering, but in-store pick up models. Loblaw, for example, offers its click-and-collect services at some 200 locations.
But tech titan Amazon’s entrance into the country’s grocery market last year changed that.
In 2016, Amazon acquired Whole Foods Market, including its 13 Canadian locations. That led to speculation Canada’s grocers would have to step up on home delivery offerings.
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(Companies in this story: TSX:EMP.A, TSX:L)
Aleksandra Sagan, The Canadian Press