VANCOUVER — Before the pressure of the electronic logging device mandate, retailers thought they did a decent job of making sure every truck was full.
“Now we’re thinking a lot different on how we plan loads,” said Frank Gambioli, senior vice president of fresh merchandising, store support and national produce procurement for Brampton, Ontario-based Loblaw Cos. “When you’re trucking 2,800 loads a day, it adds up.”
Trucking pressures have even made a marked change on how Loblaws sources, he said, during a panel discussion about retail changes in Canada during the Canadian Produce Marketing Association Convention April 25-27 at the Vancouver Convention Centre.
“We’re the largest local buyer of produce in Canada,” he said. “This is the first year we’ve had indoor strawberries, exclusive to Loblaws, and the first winter deal of all local out of Leamington. We bought a little out of Mexico — but very little.”
Jim Waites, director of produce merchandising for Overwaitea Food Group, Vancouver British Columbia, echoed Gambioli’s concerns.
“We don’t want to ever send a truck that isn’t fully cubed,” he said. “The ELD mandate was a big change for us bringing products form the U.S. The challenge for us was trying to get the cycles for drivers. It’s every important that we manage our supply chain and forecast our deliveries.”
For a local delivery specialist like Sustainable Produce Urban Delivery, based in Vancouver, the pressure has meant keeping a tight rein on supplies on hand, said Reza Bafandeh, vice president of supply chain.
“We try not to over-forecast,” he said. “We’re thinking ‘what do we need for the next two days,’ and try to make sure we have the least amount we need.”
Canada’s new minimum wage increases have been a challenge as well. It’s forcing retailers to re-think processes, Gambioli said.
“We’re looking at any technological efficiencies we can find in the supply chain, and throughout our whole business,” he said. “We’re testing in-store robots that can scan aisles.”
Both Loblaws and Overwaitea are making sure to adequately staff customer service roles under these wage pressures, Waites said.
“We’re trying to come up with solutions that are going to reduce costs in the company without reducing team members,” he said.
E-commerce growth
Just a few years ago, there were just a handful of people in the e-commerce department at most retailers.
“Now, every site we’re building is integrated with ecommerce,” Waites said. “It’s a huge piece of our business now. Even the vans themselves, we’re backlogged on getting enough of them to support what we need now.”
At Loblaws, the department has grown exponentially, Gambioli said.
“We joke that the office used to have five people three years ago, and it’s 250 people now,” he said.
For a grocer that was founded on delivery, SPUD has focused on filling out territory and maximizing density, Bafandeh said.
Biggest concerns
The panel outlined their biggest concerns over the next few years. Innovation, is one of them, and food safety is another, Waites said.
“You have to find your niche in the market,” he said. “This is why all of our new stores have restaurants and things like sushi. You have to reinvent yourself all the time.”
For Loblaws, it’s clear that staying in business means competing on price.
“If you look internationally at what Aldi and Lidl have done, and with the huge price war between Walmart and Aldi in the U.S., people are just looking for lower prices,” he said. “Other than price, we have to deliver on produce. We have to think about how do we differentiate produce. It’s the number -ne driver for loyalty.”
For SPUD, delivering on expectations, and continuing to encourage consumers to shop for produce online is a key concern, Bafandeh said.