Hello and welcome to the Goodfood Market Corp. 2021 Annual Meeting of Shareholders. Please note that today's meeting is being recorded. During the meeting, we will have a question and answer session. You can submit a written question at any time by clicking on the message icon at the top of your screen. It is now my pleasure to turn today's meeting over to Mr. Jonathan Ferrari, Chairman, Director, and Chief Executive Officer. Mr. Ferrari, the floor is yours.
Thank you. [Non-English content] This year, to mitigate the risks to the health and safety of our communities, shareholders, employees and other stakeholders related to the COVID-19 pandemic, we have decided to hold our meeting in a virtual only format. Shareholders will have an equal opportunity to participate at the meeting online regardless of their geographic location. It is the second time that Goodfood holds a virtual meeting and you may all be familiar with the procedure.
However, for those of you who have not yet familiarized yourselves with virtual shareholder meetings, please note that the instructions on how to exercise your voting rights or ask questions during the meeting are displayed on your screen for ease of reference. We would like to remind you that registered shareholders and registered proxy holders are the only persons entitled to vote or ask questions during the meeting. We will conduct the votes on all the matters before us by poll using the online platform. The poll will be open for all motions and resolutions at the same time. This will allow you to choose to vote on each motion and resolution immediately, or to wait until the conclusion of discussion prior to casting your vote.
Once discussion on all items of business has concluded, I will give you a minute to enter your votes and then declare voting closed on all resolutions. If you have already voted by proxy, it is not necessary to vote again. Please note if you choose to vote again, only your cast vote during the meeting will be counted and the vote that you submitted by proxy will be revoked. Registered shareholders and duly appointed proxy holders have the opportunity to ask questions throughout the meeting by selecting the messaging icon on the online platform. Generally, we would ask you to keep your questions for the specific period identified for such purpose at the end of the formal meeting. If questions are asked, we will read the questions aloud so that they may be heard by all shareholders, proxy holders and guests present at the meeting.
I now declare the polls open on all resolutions. [Non-English content] Moving to slide five. Before we continue, I wanna mention that we have received satisfactory proof that the notice calling this meeting was duly publicized and sent to the shareholders of the corporation. In accordance with our bylaws, I will be acting as chairman and Ms. Jubinville will be acting as secretary for the meeting. This meeting will be held in English and in French. To ensure the proper proceeding of the meeting, we have designated in advance Mr. Neil Cuggy to act as proposer and Ms.
Nadia Jubinville to act as seconder. Please note that both Mr. Cuggy and Ms. Nadia Jubinville are shareholders and proxy holders of the corporation. [Foreign language]
[Non-English content] Once the formal part of the meeting is completed, we will proceed to the presentation of Goodfood's business and financial results, and a question and answer period with management will follow. Any person wishing to ask a question should, at the appropriate time during the question and answer period, submit their questions through the online platform. [Non-English content]
[Non-English content]
My name is Neil Cuggy and I move that the following six persons be nominated as directors of the company, Neil Cuggy, Jonathan Ferrari, Hamnett Hill, Donald Olds, François Vimard, Terry Yanofsky.
My name is Nadia Jubinville and I second the motion.
Nadia Jubinville has confirmed that to her knowledge, the company has received no written notice from a shareholder nominating another individual for election to the board of directors within the period prescribed by the bylaws. [Non-English content] Moving to Slide 7.
The next item on the agenda is the appointment of the auditors for the financial year ending on September third, 2022, and the fixing of their remuneration. I would ask for a motion for the appointment of the auditors.
My name is Neil Cuggy and I move that KPMG LLP be appointed auditors of the corporation for the financial year ending on September 3, 2022, and that their remuneration be determined by the Board of directors.
My name is Nadia Jubinville and I second that motion.
I now invite you to vote on the appointment of the auditors. Since we have covered all the topics on the meeting agenda, we will now take a short break in order to allow registered shareholders and proxy holders to vote if they have not done so already. I remind you that if you have already voted by proxy, it is not necessary to vote again. The voting period is now closed for all the topics on the meeting agenda.
[Non-English content]
[Non-English content]
[Non-English content]
[Non-English content]
[Non-English content] Moving to Slide 11. We note that e-commerce for grocery is evolving quickly around the globe. The advent of the third wave of e-commerce, called quick commerce, has changed how customers interact with online grocery and is the future of grocery logistics infrastructure.
Brick-and-mortar grocery trips currently take over 60 minutes to complete, while online grocery options in Canada provide limited same-day options and can take multiple days to be delivered. Our on-demand delivery network aims to respond directly to the needs of Canadian households by providing the right merchandising to answer most, if not all, food grocery needs in approximately 30 minutes. Moreover, providing a customer-facing platform that is integrated to our inventory systems avoids stock-outs and substitutions, giving customers a better experience. That experience has translated into a Net Promoter Score of approximately 90, a truly unique experience that is bringing a cult-like following to Canadians. On Slide 12, we can see that the Canadian grocery market continues to gain scale and its digitization has strong momentum, but remains in its very early stages, and very little of the estimated CAD 142 billion market has shifted online.
The very large target addressable market is there for the taking, and we are positioning ourselves through our on-demand offering to capture a significant portion of it. We believe and have observed that providing an experience to customers that rivals in speed and selection, physically going to a grocery store is key in driving the next leg of adoption post-pandemic. In fact, 85% of Canadians see value and attribute importance to having online grocery delivery within two hours, while 61% of them are willing to switch to a new grocery retailer with two hours or less on-demand delivery. Our selection has surpassed 1,000 products and will continue to grow. Our merchandising includes staples and unique grocery products, combined with meal solutions that can provide a healthy, delicious option to any meal occasion at competitive prices.
Overall, we are pioneering quick commerce online grocery in Canada as the first and only vertically integrated player with our own grocery products and value-added meal solutions sent to customers through our purpose-built fulfillment center network, and are poised to be the market leader as we roll out our network from coast to coast. We have created a unique and differentiated experience that will drive Goodfood's future growth. Over the past two years, we have delayed the profitability of our existing ready-to-cook subscription business, which it could have provided in order to invest in three key pillars, speed, selection, and technology, and to build the value proposition to capture the online grocery opportunity. Starting this year, we are launching this value proposition to customers and are excited by their response.
As we continue our evolution to an on-demand grocery and meal solution provider, our strong execution has allowed us to make significant progress on the three key pillars required to build Canada's leading on-demand online grocery network and ultimately drive our next phase of growth. On that note, I will turn it over to Jonathan Royter, Chief Financial Officer, to go over our key highlights and financial performance for this year.
Thank you, Jonathan. As you can see on Slide 14, our results this year demonstrate the continued strength of Goodfood's penetration and value proposition. The clear convenience and differentiation of our ready-to-cook products, combined with our growing grocery selection and fast delivery capabilities, drove strong basket sizes and order rates, translating into record revenues of CAD 379 million for the year. Our gross profit and gross margin also hit new records of CAD 116 million and 30.6%. Our Q4 results have been impacted by the return of summer seasonality, further amplified by the reopening of economies across the country. The volume decline, particularly in the months of July and August, impacted our top line, with net sales reaching CAD 79 million and gross margin standing at 23%.
We view the 5% year-over-year decline in net sales as a sign of resilience in the business, as Q4 net sales remained well ahead of pre-pandemic levels, despite unprecedented pent-up demand for out-of-home activities. Our gross margin was impacted by the volume decline, creating operating deleverage on our cost of goods sold, seasonality leading to higher packaging costs as well as inflation, particularly in labor, as a result of the current labor shortage conditions. Lastly, our investments in on-demand grocery and meal solution fulfillment also grew, creating material start-up costs and cost of goods sold. After a strong FY 2021 and a seasonally weak fourth quarter, we are now looking forward to FY 2022 and the growth potential of our on-demand grocery and meal solution strategy, the key driver of our next phase of growth.
We have now surpassed the 1,000 product mark, providing a compelling selection of grocery and meal solutions to our customers, available under one hour in Toronto and Montreal. Offering alternative to traditional grocery that takes less time to arrive at our customers' doors than it takes to go shop in a store is a truly unique value proposition that will drive online grocery penetration and position Goodfood to be the Canadian leader in the field. I will now move to Slide 15 for a review of our financial performance. The acceleration of delivered to home e-commerce, grocery and meal solution adoption, combined with Goodfood's enhancements in delivery speed and product offering, allowed us to achieve record results this year.
Net sales reached CAD 379 million for the year, a 33% growth compared to FY 2020. For the quarter, net sales of CAD 79 million, a 5% decline compared to the same period last year. The result was driven by expected seasonality, amplified by the reopening of economies across the country, which in turn led to a lower active customer count and order rate. Our record gross profit this year increased to CAD 160 million, translating into gross margin of 30.6%. Gross profit grew 34% year-over-year, and gross margin grew 0.3%
The increase in gross profit and gross margin for the year resulted mainly from fixed cost leverage in the first three quarters of the year, provided by higher volume and average order values, and lower levels of credit and incentives as a percentage of revenues. For the Q4 , our gross profit and gross margin fell to CAD 18 million and 23% respectively. This level of gross margin was as a result of four key drivers. First, labor costs and shipping costs were impacted by operating deleverage, resulting from lower volume. A fixed labor cost remained while sales were lower, and lower density impacted shipping efficiencies, particularly in the months of July and August.
Second, inflation, mainly in the labor market, driven by an unprecedented tight labor market, led to labor shortages requiring wage increases, overtime, and incentive bonuses, all at the same time as volume was impacted by seasonality. Third, our packaging costs were impacted by seasonality as they are every year, with more ice packs on liners used to protect against the warmer weather, which lasted well into October, as well as the increase in the sales of grocery products requiring additional packaging. Lastly, start-up costs to support our on-demand initiative had a material impact as new facilities were opened and inventory was built, particularly in grocery. Overall, we are pleased with the record net sales and gross profit achieved this year, and doing so despite the headwinds faced in the fourth quarter.
Our profitability was impacted by volume, rapid volume deleverage, and the investments made this year to support our platform for future growth. Investments we will continue to make as our cash balance provides the financial flexibility we need. Without these investments, our profitability would have been in the high single-digit % adjusted EBITDA this year. As our additions to technology, to management, and to all the supporting admin functions have been made to capture the on-demand grocery and meal solution market. As we see these investments generating sizable compounded annual growth in net sales for years to come, we expect these costs over time to be absorbed by our new on-demand growth platform. Moving to Slide 18. We are now opening the question period. May I remind you that Mr. Neil Cuggy, President and Chief Operating Officer, Mr. Jonathan Ferrari, Chief Financial Officer, Ms.
Nadia Jubinville, Vice President, Legal Affairs, General Counsel, and Corporate Secretary, Roslane Aouameur, Vice President, Corporate Development, and myself are available to answer your questions. I'd like to remind you that only shareholders or proxy holders are entitled to ask questions, and that the instructions for asking a question appear on your screen. We will take a short break to allow you to ask any questions. Please follow the instructions that appear on your screen.
Ladies and gentlemen, this concludes the meeting. You may now disconnect.