Launched this week was Amazon’s newest competitive appeal to Canadian consumers, an online grocery and gourmet food store. This service will sell and deliver goods to Canadians using Amazon’s unique dynamic pricing system which allows Amazon to adjust prices in real time to maintain a competitive advantage over competitors such as Walmart.

This move signals Amazon’s attempt to compete with Walmart who has already released an online grocery system in Canada. In my opinion, Amazon holds an edge in online groceries in the sense that they already have a huge online presence and already have an extensive shipping system in place. In expanding to Canada, Amazon simply incurs additional shipping costs which are passed along to the consumer. Amazon also deals with low supplier power as it already has this extensive model established in the United States. By expanding to Canada, Amazon is resultantly increasing its purchasing volume and leveraging more power for itself. This could possibly result in lower prices, the benefits of which could then be passed on to consumers and to the company as increased profit margins.

It will be interesting to see the degree to which this entrance by Amazon will effect the Canadian grocery industry over the next decade.

How will Amazon fit into this breakdown?

Source: http://www.cbc.ca/news/business/amazon-launches-online-grocery-store-in-canada-1.2303320