LOBLAW EXPERIMENTS WITH ON-LINE SHOPPING

BRIAN DUNN

MONTREAL -- Loblaw Cos., Toronto, is cautiously testing the on-line shopping market, adding its name to a small but growing number of e-grocers in Canada.

The country's largest grocery chain will offer a full range of groceries on a secret Web site available to a handful of people with a special access code.

Geoff Wilson, a Loblaw spokesman told SN, "It's a small pilot project we're launching this month on a closed site."

"We will be monitoring consumer issues and economic issues, before deciding whether to expand the site," he added.

"The test is quite primitive," according to Peter Caicco, analyst at the National Bank Financial, Toronto. "They're testing the service elements from an angle of skepticism. I think they want to prove to themselves that on-line grocery shopping can't be profitable."

Loblaw said no company was making money through on-line grocery shopping, but added it would jump in if the purchasing channel begins to take off.

The only other Canadian grocer involved in e-commerce is Sobeys' Quebec division, which through its 151 IGA stores offers over 6,000 SKUs on-line. Iga.net had Internet sales of $680,000 last year. The company said it expects to double that volume this year.

Metro here, Canada's other major grocer, has no immediate plans to offer on-line shopping.

"I don't think it's going to explode any time soon," Pierre Lessard, Metro president and chief executive office, said recently at the company's annual meeting.

A new study by National Bank Financial predicts the on-line grocery sales in Canada will grow to between $340 million and $475 million by 2003, which would amount to slightly more than 1% of total Canadian grocery sales. This sales figure would pose little threat to existing supermarket operators, according to Caicco.

Along with IGA, there are at least four major Canadian firms offering on-line grocery shopping: GroceryGateway, PeachTree Network, HomeXpress and TeleGrocer.