Canada country presentation_presentation

© www.igd.com/analysis
Country Presentation
Canada
Updated February 2011

Contents
Introduction
Demographics
Political Outlook
Economic Overview
The Retail Market
Top Retailers
Challenges
Market Share Definitions
Retailers covered include:

Source: CIA
 Area:
9,984,670 sq. km
(2nd
largest in the world)
 Capital City:
Ottawa
 National Currency:
Canadian Dollar
 Population (2010):
33.8 million
 Population Density:
3.39 people/sq. km
 Prime Minister:
Stephen Harper
 Ruling Party:
Conservative
Summary

Demography: 10 Most Populated Provinces
Province Capital City Population
(000’s)
Area
sq. km
Ontario Toronto 13,064 1,076,395
Québec Quebec City 7,828 1,542,056
British Columbia Victoria 4,460 944,735
Alberta Edmonton 3,670 661.848
Manitoba Winnipeg 1,220 647,797
Saskatchewan Regina 1,029 651,036
Nova Scotia Halifax 939 55,284
New Brunswick Fredericton 749 72,908
Newfoundland and Labrador St. John’s 508 405,212
Prince Edward Island Charlottetown 141 5,600
• Nearly 90% of Canadians live within 200km of the US border.

Demographics
Population Split by Age, 2010 (%)Population Growth Forecast (millions)
Source: IGD Retail Analysis Datacentre, calculated in 2011, Statistics Canada

Immigration In Canada
Immigration has helped to make Canada one of the world’s richest and diverse nations.
The number of immigrants entering Canada has increased significantly since the 1940’s.
Over 18% of the Canadian population were foreign born at the time of the last Census
(2001).
In the same census, 13% of Canadians identified themselves as belonging to a visible
ethnic minority.
The proportion of so-called visible minorities will grow to one-third of the population by
2031.
The vast majority of immigrants are arriving from China and South Asia.
Almost 70% of Canadian’s are English speaking, with 15% French speaking. Everything
that is sold in Canada is labelled in both English and French.

The Proportion Of Immigrants Living In Canadian
Provinces
Province Foreign Born
Population (%)
Ontario 26.8
British Columbia 26.1
Alberta 14.9
Manitoba 12.1
Québec 9.9
Saskatchewan 5.0
Nova Scotia 4.6
Prince Edward Island 3.1
New Brunswick 3.1
Newfoundland and Labrador 1.6
Source: Statistics Canada

Total visible minority population by province%population
Source: Statistics Canada

Trading In Canada
Companies have to operate within a system of both federal and provincial legislation,
including differing tax regimes in operation.
The Canadian economy has remained relatively robust during the economic
downturn, particularly its banking sector, and has returned to growth quickly.
Canada is a member of the North American Free Trade Agreement (NAFTA).
The US and Canada have the world’s largest trading relationship.
The Canadian economy is largely tied to the US, which in 2009 absorbed 73.4% of
Canadian exports.
In recent years, the relationship between Canada and the US has encountered
challenges following a number of moves by the US which includes placing tariffs on
Canadian timber.
The slow economic recovery in the US could impact the pace of recovery in Canada.

Political Outlook
Twelve years of Liberal government ended in January 2006 when Stephen Harper
was appointed Prime Minister.
However, the new conservative Government has limited room for manoeuvre as it
failed to gain a majority vote.
The conservative party aims to cut taxes, fight crime, increase military spending and
improve the relationship with the US.
Mr Harper has been criticised for the apparent switch of focus from social to economic
matters.
An economic stimulus package has been broadly successful in protecting the
Canadian economy from the severest impacts of the recession
The next national election is scheduled for 2012

Economic Overview
2007 2008 2009 2010 2011
GDP (Nominal US $bn)
1,431 1,508 1,344 1,571 1,655
GDP Growth (%)
2.53 0.41 -2.48 2.13 3.55
GDP per Capita (US $)
43,525 45,353 40,006 46,404 48,524
Unemployment (%)
6.01 6.16 8.43 8.83 7.50
Food Price Inflation (%)
2.59 2.51 2.61 2.71 2.81
Consumer Price Inflation
(%) 2.12 2.39 0.03 0.53 1.38
Source: IGD Retail Analysis Datacentre, calculated in 2010

Grocery Retail Market Sizes 2010
Country Grocery Retail
Market
(US$bn)
1. USA 882
2. Brazil 290
3. Mexico 159
4. Canada 104
5. Venezuela 58
6. Argentina 49
7. Columbia 48
8. Chile 25
9. Peru 25
10. Dominican Republic 12
Top 10 North, Central & South
American Markets
Top 10 Global Markets
Country Grocery Retail
Market
(US$bn)
1. USA 882
2. China 790
3. Japan 360
4. India 350
5. Brazil 290
6. France 276
7. Russia 256
8. Germany 215
9. United Kingdom 215
10. Italy 172

The Retail Market
2007 2008 2009 2010 2011
Consumer Spend (US$bn) 798.01 844.72 752.75 895.35 934.89
Total Retail Market
(US$bn)
269.02 314.70 287.77 329.03 342.85
Total Grocery Market
(US$bn)
90.15 95.60 92.71 104.35 107.70
Grocery as a % of Retail 33.5% 30.4% 32.2% 31.7% 31.4%
Grocery Retail Spend /
Capita (US$)
2,742 2,874 2,759 3,083 3,158

Retail Consumer Spend Per Capita in Canada
• Consumer spend per capita is the second highest in the NAFTA behind the US, and
amongst the highest in the world.

Retail Legislation
Canada has been one of the leading countries to ban the display of tobacco products.
The legislation has been gradually phased in across each province and territory since
2002. Currently 12 of the 13 provinces/territories have a ban in place.
In October 2009, the Council of Ministers of the Environment approved in principle a
Canada-wide Action Plan for Extended Producer Responsibility and a Canada-wide
Strategy for Sustainable Packaging.
Extended producer responsibility (EPR) is an environmental policy approach in which
a producer's responsibility for a product is extended to the post-consumer stage of a
product's life cycle.
Two related features of EPR policy include:
 Increasing producer responsibility by shifting responsibility upstream toward the
producer and away from municipalities and/or regional or provincial waste
management authorities.
 Providing incentives to producers to incorporate environmental considerations in the
design of their products.

The Grocery Retail Market – Structure By Format
The majority of grocery stores in the Canadian market are supermarkets. These are
typically operated under a range of banners by each of the leading operators, many of
which are specific to each province.
Although there are only a small number of convenience operators in Canada, Couche-
Tard, based in Quebec, is North America’s second largest convenience store retailer
with almost 6,000 stores, over 2,000 of which are in Canada.
There are currently few hypermarket operators in the market, although Walmart
continues to expand its presence with its Supercentre format.
The majority of discounters operating in Canada are soft discounters, with this channel
growing in importance, and a key area of development for retailers.
A number of the leading retailers also operate a range of drugstore formats.
Increasingly retailers from beyond the traditional grocery sector are developing food
ranges including drugstores, dollar stores and general merchandise operators.
Developing an offer to meet the needs of Canada’s highly diverse multi-cultural society
is also a growing focus for retailers.

Top Grocery Retailers 2010
Retailer Net Sales
($ CAD m)
% Total
Turnover
Growth 2009
v 2008
No. of Stores Sales Area
(sq ft 000’s)
Loblaw 31,322.79 +1.9% 1,044 51,470
Sobeys 15,463.46 +1.4% 1,379 28,343
Walmart Canada 12,753.15 -3.3%* 323 43,024
Metro Inc 11,342.80 +1.3% 771 20,967
Costco Canada 10,349.55 -6.8%* 79 10,800
Shoppers Drug Mart 10296.30 +3.1% 1,310 12,186
Safeway Canada 6,096.06 -9.0%* 226 9,040
Couche-Tard (Canada) 2,085.23 -3.6%* 2,072 4,839
* At actual exchange rates

Market Share - Canada
2008 2009 2010
Loblaw 24.8% 24.0% 23.9%
Sobeys 13.7% 13.6% 13.4%
Metro Inc 9.6% 9.7% 9.5%
Safeway 6.7% 6.3% 6.2%
Wal-Mart
Canada
4.3% 6.0% 6.7%
Couche-Tard 1.8% 2.0% 2.1%
Canada Market Share - 2010
Couche-Tard turnover only includes goods sold in-store (ex fuel)

Key:
H = Hypermarket
S/S = Superstore/Supermarket
C&C = Cash and Carry
H/SD = Hard/Soft Discount
Banner Total
net
Sales
($m)
Format No. of
Stores
Sales
Area
(000s sq
ft)
Av.
Sales
Area
(sq ft)
Atlantic Superstore, Real
Canadian Superstore,
9,455 H 183 14,553 79,524
Dominion, Fortinos,
Independent Grocer, Zehrs,
Zehrs Great Food, Loblaws,
Loblaws Great Food, Provigo,
SuperValue, Valu-Mart, Atlantic
SaveEasy
11,452 S/S 413 22,244 53,860
Extra Foods, No Frills, Maxi,
Maxi & Cie
4,909 H/SD 380 7,234 18,988
Cash & Carry, Presto, The Real
Canadian Wholesale Club
5,487 C&C 68 7,125 104,787

Loblaws in Montreal
Source: Retail Analysis photo gallery
Loblaw is Canada’s leading food and grocery retailer.
In 2007, Loblaw began its three to five year turnaround
plan in an attempt to “Make Loblaw The Best Again.”
The plan involves implementing the three main
imperatives of “Simplify, Innovate, Grow”.
A key element of this strategy is to reinvigorate its store
base, particularly its hypermarket format –
refurbishments will continue in 2011
Loblaw is also investing significantly in its supply chain
capability and focusing on driving improved levels of
productivity.
It’s private label ranges, no names and President’s
Choice, are important levers for growth going forward,
with the latter having been extended into banking and
telecom services.
The retailer will expand its standalone clothing store
operation, Joe Fresh, this year, with six new stores

Key:
C/F = Convenience/Forecourt
O= Other
Banner Total
net
Sales
($m)
Format No. of
Store
s
Sales Area
(000s sq ft)
Av.
Sales
Area (sq
ft)
Sobeys, Thrifty Foods,
Foodland, IGA, IGA Extra,
Marche Bonichoix, Les Marches
Tradition
13,085 S/S 900 23,909 26,565
Lawtons Drugs, Rachelle-bery 533 O 77 540 7,018
Price Chopper, FreshCo 900 H/SD 110 2,113 19,214
Needs Convenience 510 C/F 284 978 3,444
TRA Atlantic, Lumsden 435 C&C 8 801 100,223

Sobey’s focus is based on being “best in food” coupled
with offering outstanding customer service.
In April 2008, Empire Company Limited, acquired whole
ownership in Sobeys, buying all outstanding shares in
the company for CAN$1.1bn.
Sobeys is the second largest food retailer in Canada,
benefiting from a number of strategic acquisitions
including the Thrifty Foods in British Columbia,
extending the retailer’s reach in the West of Canada.
Although its reach is becoming increasingly national, it
adopts a local approach in each of its markets.
In June 2010 the retailer launched a new discount
concept, FreshCo. This has a focus on fresh foods and
ethnic ranges, and uses a unique layout to guide
shoppers around the store.
These stores replaced its existing Price Chopper format,
and all conversions are scheduled for completion in 2011
Sobeys and Sobeys
express in Montreal

Key:
O = Other
Banner Total
net
Sales
($m)
Format No. of
Store
s
Sales Area
(000s sq ft)
Av.
Sales
Area (sq
ft)
Metro, Metro Plus, Dominion,
Loeb
7,215 S/S 379 13,072 34,491
Super C, Food Basics 3,023 H/SD 185 6,757 36,522
Brunet, Clini Plus, Pharmarcy
Drug Basics
1,105 O 207 1,139 5,500

Metro’s mission is to be “Canada’s best food retailer.”
Metro is concentrated in Eastern Canada, and is the
second largest retailer in Québec and Ontario.
Metro operates a multi-format portfolio including
supermarkets, discount stores and drug stores.
Metro has now completed the consolidation of its
supermarket stores in Ontario under the Metro banner.
In 2009 Metro formed dunnhumby Canada in
partnership with dunnhumby to enable it to leverage
insights from shopper loyalty programmes.thr
The focus in 2011 will be on leveraging the insights
from this programme to drive improved business
decisions in pricing, ranging and promotions
Metro has also consolidated its private label offer under
two key brands, Irresistible and Selection.
Metro Plus and Super C in
Montreal

Banner Total
Sales
($m)
Format No. of
Stores
Sales Area
(000 sq ft)
Av. Sales
Area (sq ft)
Wal-Mart
Supercentre
7,230 H 118 19,777 167,605
Wal-Mart 5,523 GM 205 23,247 113,398
Key:
H = Hypermarket
C&C (Clubs) = Cash & Carry Members Club
GM = General Merchandise
• Wal-Mart first entered Canada in 1994 through the acquisition of 122 Woolco stores.

On the 18 October 2006, Wal-Mart opened its first
Supercentre stores in Canada.
The stores are modelled on those in the US, and
combine Wal-Mart's traditional general merchandise
offer with a wide assortment of perishable goods, a
bakery, a deli, as well as a number of fresh food
counters.
Developing its food offer, and in particular its fresh food
ranging, is an important element of the strategy going
forward.
In 2011, Wal-Mart will introduce the Supecentre format
into Quebec and Alberta.
In 2010, the retailer began offering its own financial
services, following approval from regulatory authorities
to establish its own bank
In August 2010 Walmart Canada announced the
expansion of the range of products available under the
George clothing brand with a major re-launch.
Wal-Mart, British Columbia

Banner Total
Sales
($m)
Format No. of
Stores
Sales Area
(000 sq ft)
Av. Sales
Area (sq ft)
Costco 10,350 C&C
(Clubs)
79 10,800 136,709
Key:
C&C (Clubs) = Cash & Carry Members Club
Entered Canada in 1985.
Costco’s sales in Canada accounted for approximately 13.8% of total group sales
in Fiscal 2007.
Canada is Costco’s largest international market.

Costco’s main priorities in Canada are:
Continue to grow organically.
Costco could open as many as 10 to 15 stores in
the coming years.
Plans to open 35 new stores by 2015.
Adding gas stations to existing stores.
Costco in TorontoOntario, Quebec and British Columbia are
Costco’s largest markets in Canada. Stores
in these three provinces account for over
75% of the entire portfolio.

Banner Total
Sales
($m)
Format No. of
Stores
Sales
Area (000
sq ft)
Av.
Sales
Area
(sq ft)
Shoppers Drug Mart,
Shoppers Simply Pharmacy,
Pharmaprix, Pharmaprix
Simplement Sante, Murale
9,954 H&B 1,247 11,745 9,418
Shoppers Home Health Care 342 O 63 441 6,997
Key:
H&B = Health & Beauty
O = Other

Shoppers Drug Mart, Langley
BC
Canada’s leading health and beauty chain.
Increasing focus on developing food and grocery
ranges.
Format development includes larger format
Shoppers Drug Mart stores and continued
expansion of its Murale beauty stores.
The retailer has also developed smaller format
stores, namely Shoppers Simply Pharmacy - these
stores are around 1,000 sq ft in size and provide a
retail pharmacy format in medical buildings or
clinics. Currently there are 30 locations in
operation.
The retailer has recently undertaken the first in a
series of reductions in store operating hours as a
result of the impending funding cuts to
community pharmacy by the Ontario Government.
A broader trial of fresh food ranges is also
underway.

Banner Total Sales
($m)
Format No. of
Stores
Sales Area
(000 sq ft)
Av. Sales
Area (sq ft)
Safeway 6,096 S/S 226 9,039 40,000
Key:
Canada remains Safeway’s only consolidated business outside of the US.
Operates in Canada through Canada Safeway Limited, a subsidiary of Safeway Inc.
Based in Winnipeg, Manitoba.

Nearly a third of all stores in Canada are less than
35,000 sq.ft in size and are located in Western
Canada.
New store development is likely to remain fairly
limited in the years ahead, as Safeway focuses on
rolling out the Lifestyle concept in its core US market.
2010 saw the roll-out of an aggressive price cutting
programme, reflecting a similar initiative that had
been implemented in the US in 2009.
Safeway utilises its private label capability to create a
key point of difference, particularly in terms of its
Signature café ranges and prepared foods.
Many of Safeway’s Canadian stores also feature a
Starbucks outlet.
Safeway in Canada

Key:
C/F = Convenience/Forecourt
• Sales in Canada accounted for 29.8% of total group turnover in 2009.
Banner Total
Sales
($m)
Format No. of
Stores
Sales Area
(000 sq ft)
Av. Sales
Area (sq ft)
Couche-Tard,
Macs
2,085 C/F 2,072 4,840 2,336

Couche-Tard’s growth in North America has been fuelled by
a large number of acquisitions, which combined with new
store openings has resulted in a portfolio of over 2,000
convenience and forecourt stores in Canada.
Innovation and well-targeted marketing strategies have
been at the centre of Couche-Tard’s growth.
New product development and in-store merchandising
differs according to regional preferences. A typical store now
offers around 3,200 SKUs, almost twice that of a decade
ago.
Own brand lines have played an important role in building
customer loyalty in recent years. Couche-Tard has an
extensive private label assortment in coffee, energy drinks
and sandwiches.
The retailer is currently trialling different foodservice options
in the US as it builds capability in this area.

Priorities in 2011
Continued innovation in private label, national expansion of No Frills
and delivering increased supply chain capability through progressing
its 2012 initiatives
Completing the FreshCo store conversions and re-focusing its
marketing to drive its core business with emphasis on
freshness and uniqueness and category management
Leveraging customer insights to deliver its customer first focus,
impacting products, pricing and promotional decision making
Investing in its foodservice capabilities should help to
drive a step-change in performance in this area
Further tailoring of the offer to demonstrate its local
relevance
Around 40 further Supercentres will open in 2011, helping it
to demonstrate its commitment to fresh produce retailing

Challenges and Opportunities
Focus on Fresh – A strong fresh food offer tends to feature in all of the leading chains in
the Canadian market and will continue to be a key battleground going forward, especially
in natural and organic ranges.
Extension of the Supercentre in Canada – Wal-Mart opened its first Supercentre store
in October 2006. This has since led to an even greater competition on price, particularly
in Ontario, where a significant proportion of sales are now driven through the discount
channel.
Discounting – significant innovation is taking place within the discount sector as
retailers seek to appeal to more value conscious customers, and to reach new customer
groups.
Growth in convenience – The Canadian convenience market is relatively
underdeveloped. Apart from Couche-Tard and Sobeys’ experimental convenience stores,
there are few operators in the sector. An opportunity therefore exists in the Canadian
convenience sector for greater expansion.
Changing demographics – Retailers are developing broader ethnic ranges to cater for
the changing Canadian population. With immigration forecast to grow strongly in the
future, the major retailers are seeking to replicate the success of more specialist retailers
in this area.

IGD Market Share Methodology
IGD has a single, universal methodology to enable comparisons of market shares and
consolidation levels between countries. It is calculated by comparing retailers’ sales from grocery
formats with IGD’s grocery retail market size.
IGD defines the grocery retail market as all food, drink and non-food products (e.g. health &
beauty, pet care, clothing, DIY) sold through all retail outlets selling predominantly food in a given
country.
 This definition includes both modern retail formats such supermarkets and hypermarkets, and
traditional retail formats such as open air markets and traditional food stores such as bakers.
However, it excludes Cash & Carry operations and drugstores/pharmacies and sales tax.
IGD market sizes are ‘top down’, derived from national statistical bodies wherever possible. In all
other cases, the figures published in this report represent IGD estimates and are based on a
consistent methodology and knowledge of local markets.
For each retailer, the turnover used is total sales from grocery format, and therefore excludes
non-food formats (such as DIY, electrical stores, department stores etc). IGD also exclude Cash &
Carry formats and drugstores/pharmacies from this measure, to ensure the data sources are
comparable;
 1.Retail turnover is excluding VAT
 2.Retail turnover is excluding non-food formats (e.g. furniture, electrical stores etc)
 3.Cash & Carry operations are excluded
 4.Where known, we have subtracted the Cash & Carry operations of players such as Carrefour
and Rewe to use a pure grocery retail estimate of turnover.
IGD’s market shares differ from panel-based or till-roll markets shares (e.g. from ACNielsen, TNS or
IRI) due to the different methodologies; the latter are based on limited categories/retailers.

For More Information
Visit the Canada hub page on Retail Analysis.
Use the IGD Datacentre for key macroeconomic data on Canada, plus statistics on
retailers’ operations by banner and format.
Visit the photo archive for images of retailers operating in Canada.
Got a MyReports subscription? Try checking our International Research reports.
To find out how an IGD Customised Briefing can bring you up to speed on the market
and the key players, email anne.bordier@igd.com
Still can’t find what you’re looking for? Contact us igd@igd.com or 01923 857141.

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