How Canadian Fulfillment Centers Create Jobs and Investments
Alberta is getting a new high-tech Canadian fulfillment center. Walmart Canada is investing more than $118 million to build the facility in Rocky View County just outside Calgary, with a planned opening in September 2022. The company says the move will create more than 325 in-house positions on top of the local construction and engineering jobs that the project generates. The Rocky View County center is part of an overall $3.5 billion investment that Walmart is making all across Canada, which includes new fulfillment centers in Ontario and British Columbia.
This multi-billion-dollar venture seems a clear sign that the retail giant is betting on a booming future for Canadian fulfillment centers. The investment comes just in time to meet a pressing need: Canada is on the verge of running out of warehouse space. This, according to Bloomberg News, is due in part to the massive upswing in e-commerce prompted by the coronavirus pandemic. JPMorgan Chase & Co reports that after the onset of COVID-19 in 2020, the number of Canadian shoppers whose overall purchases were at least 40% online doubled. The fulfillment centers that facilitate this e-commerce weren’t designed to handle the volume of this unprecedented surge. Even the near-record construction of 26.1 million square feet of new logistics facilities that got underway in 2021 isn’t enough to handle the boom.
Walmart isn’t alone in its bullish view of the future of Canadian fulfillment centers; Amazon Canada is opening three new fulfillment centers and one sort center in 2022 and 2023. This is in addition to the 15 fulfillment facilities, including delivery stations, that Amazon Canada has launched since 2021. Following the bow of its first Canadian fulfillment center two years ago, the omni-fulfillment platform ShipBob launched a second facility in Toronto in March 2022. Along with commitments from other top fulfillment companies such as Stalco, these investments show that the major players in the Canadian fulfillment sector are wagering on a strong future for e-commerce.
The data suggests that they’re making safe bets; over the past several years, Canada has seen about 10% year-on-year growth of e-commerce. According to Retail Insider, online sales in Canada are on track to hit nearly $80 billion in 2022, expected to rise to about $104 billion by 2025. The rise is happening faster than many experts forecasted; the research gurus at Insider Intelligence predicted that the number of Canada’s digital buyers would hit 25 million in 2023, but the milestone was passed in 2021. Canadian businesses are making moves to meet the needs of this growing demographic of e-shoppers with expanded online presences that include an increased focus on social commerce through platforms including Snapchat, TikTok, and Google Shopping.
With the growth of online sales continually outpacing retail sales by considerable margins, the fulfillment centers needed to handle this increase in online commerce seem certain to be integral parts of this rising tide. What does all this mean for Canada? Billions of dollars of investments in physical infrastructure and thousands of new jobs. All thanks, at least in part, to Canadian fulfillment centers.