Dive Brief:
- Canadian conglomerate Empire Company Limited has launched Voilà by Sobeys and Voilà par IGA, a new online grocery delivery service that will be powered by Ocado, a company press release said. Voilà will serve the greater Toronto area and major cities in Quebec.
- Construction is underway on a $95 million automated customer fulfillment center in Vaughn, Ontario, with plans to be operational in spring 2020. A second customer fulfillment center will be built in Montreal, Quebec with operations expected to begin in 2021.
- Voilà will offer a selection of 39,000 products, and orders will be fulfilled through the Ocado-powered automated fulfillment centers. Each center will create around 1,500 jobs.
Dive Insight:
Competition in the online grocery space is reaching new heights as grocery companies commit to massive investments in infrastructure to support e-commerce and capture some of the multibillion dollar market.
Sobeys is joining a select group of grocers on the front lines of automated grocery delivery as it launches its Voilà brand. In partnering with Ocado, the Canadian retailer will have the support of a cutting-edge company whose shares have jumped 72% this year and an army of warehouse robots that are three times faster than Amazon’s, according to Bloomberg.
In the U.S., Kroger also has a high-profile partnership with the British e-grocer, with the first of dozens of Ocado automated customer fulfillment centers under construction near Cincinnati right now. Plans to construct second and third centers in Central Florida and the Mid-Atlantic are in place, and the first facility is expected to open by 2021. While Kroger is not directly competing with Voilà, the Canadian grocer's quicker timeline for its facilities is notable.
One differentiating factor between the Ocado partnerships is that Sobeys has opted for an individualized e-commerce brand, while Kroger offers the online grocery delivery service under its store name. Kroger's uniformity may appeal to some shoppers, assuming that the products they receive in their delivery will be the same as what they would have scooped up in store.
The sheer size and power of mega fulfillment centers may give retailers like Kroger and Sobeys an edge, but other retailers are opting for different fulfillment center designs. Stop & Shop, for example, is building automated micro fulfillment facilities that take far less time to build than Ocado’s facilities, which take two to three years to construct. This will allow Stop & Shop to serve customers at a much faster rate throughout key markets.
Across the pond, Ocado is also exploring whether its technology can crack the one-hour delivery market through a trial that took place in West London in March. The endeavor is not a response to Amazon’s Prime Now service, according to Ocado CEO Tim Steiner, who doesn’t see Amazon as a competitive threat in the U.K. market.
