BUSINESS
05/07/2014 12:24 EDT | Updated 05/07/2014 12:59 EDT

Loblaws Goes Middle Eastern With Purchase Of Arz Fine Foods

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Even as it consolidates the Shoppers Drug Mart chain into its network of stores, Loblaws is expanding again, this time with an eye on capturing a greater share of Canada’s growing ethnic food market.

The supermarket chain, Canada’s largest retailer, announced Wednesday it’s buying Arz Fine Foods, a Toronto grocery retailer specializing in Middle Eastern foods.

It’s a reflection of both the growth of Canada’s Middle Eastern population, and a reflection of the increasing diversity of food tastes among Canadian shoppers.

Though Arz is just one store, it offers Loblaws the expertise it needs to expand into this market, the company said in a statement.

The acquisition follows the same model as Loblaws’ buyout of the T&T Asian-foods supermarket chain in 2012, “which introduced ethnic expertise and products into our broader business in a very authentic way,” Loblaw Cos. president Vicente Trius said.

Loblaws said people of Middle Eastern descent now account for 2 per cent of Canada’s population and represent “one of the fastest growing market segments.”

Loblaws is facing heightened competition as retailers like Amazon and Walmart move to grab a greater share of the Canadian grocery dollar. Amazon launched a Canadian online grocery store last year, while Walmart is planning to build 35 new supercentres across Canada that will stock food.

Loblaws recently responded to the challenge with plans for a "click and collect" online grocery service. Customers would be able to order online and pick up the groceries at a nearby Loblaws or Shoppers Drug Mart.

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