Monday, November 13, 2017

Amazon/Whole Foods working on new formats; AmazonFresh cuts service

Amazon revealed during its third quarter earnings conference call that it is working with Whole Foods executives on new grocery store formats.

"There will be a lot of work together between Prime Now, AmazonFresh, Whole Foods, Whole Foods products on the Amazon site, (and) Amazon Lockers at the Whole Foods stores," according to Amazon CFO Brian Olsavon.

Olsavon also said the company plans to open more Whole Foods stores.

Meanwhile, Whole Foods said last week that it will add in-store pop-up shops in select stores that feature technology products from Amazon. The stores will also provide information about Amazon's Prime membership and Prime Video offerings.


Amazon announced earlier this month that it would discontinue its AmazonFresh grocery delivery service to select zip codes around the country. Customers in several states, including New York, Pennsylvania, New Jersey and Delaware, have reported receiving notices that the service would soon end.

According to a Planet Retail RNG analyst, Amazon's Prime Now service, which provides grocery delivery in under two hours, appears to be more successful than AmazonFresh, which has been economically challenging to operate.

"There is some internal rationalization happening for Amazon in grocery as it integrates the Whole Foods stores into its business," said the analyst. "While Instacart does have almost three-and-a-half years remaining on an agreement with Whole Foods to be its exclusive perishables delivery provider, I think Amazon long term will take this over, delivering groceries from Whole Foods stores using its own Prime Now program."

"Amazon's move today away from the AmazonFresh program is a clear second step in integrating Whole Foods, with many more moves to come," said Spencer Millerberg, CEO of One Click Retail. "AmazonFresh on its own has not gained sufficient momentum in 10 years since it launched, while Whole Foods items on Amazon have been growing around 8% per week since launch."

Analysts agree that Amazon will likely expand its e-commerce efforts in areas where Whole Foods operates in order to leverage the retailer's brick-and-mortar presence.

Thursday, November 9, 2017

Whole Foods CEO finds Amazon culture "challenging"

A Forbes story last month reported that Whole Foods CEO John Mackey is struggling with the Amazon culture, describing it as "challenging" in a recent speech. Mackey announced that he has scheduled a retreat to help him and other top Whole Foods executives better align with Amazon's "higher purpose."

In a short period of time, Mackey has seen Amazon close one of the five newly opened Whole Foods 365 stores, and the four others have seemed to stall. The 365 concept was Mackey's attempt to attract shoppers and dispel the "Whole Paycheck" image. According to reports, the stores did neither.

Amazon's plan, according to CEO Jeff Bezos, is to lower prices throughout the entire Whole Foods chain, not just at the smaller format stores.

A recent survey by ChargeItSpot, which owns cellphone charging stations, revealed that 62% of shoppers were more likely to shop at Whole Foods now that it has been acquired by Amazon, and 84% had positive feelings about the merger.

Whole Foods data breach hits Greater Philly area stores

It was reported about a month ago that Whole Foods had experienced a data breach where some customer credit and debit card info was hacked (Whole Foods announces credit and debit card hack). Shortly thereafter it was revealed that some stores in the Greater Philadelphia area were included in the breach.

The cyber attack, which was aimed at Whole Foods' taprooms and restaurants and not the stores grocery checkout lines, affected the Center City store at 2101 Pennsylvania Ave., as well as stores in Wynnewood, Allentown, Upper St. Clair and Wexford.

Whole Foods said it has taken "appropriate measures" to address the issue, and the investigation is ongoing.

Lidl opening first NJ store next week

Lidl's first New Jersey store is slated to open in Vineland next Thursday, November 16. The German retailer has stores in 28 countries, and currently has 41 stores in five U.S. states.

Several stores are slated for Pennsylvania, but none are expected to open this year.

Saturday, November 4, 2017

Moody's downgrades The Fresh Market

A Supermarket News story last month reported that The Fresh Market's effort to increase store traffic through investments in price have not been successful, and same-store sales are expected to decline for the rest of the year. Supermarket News cited Moody's Investor Service as the information source.

Moody's recently categorized The Fresh Market's corporate family credit rating as a very high credit risk and gave it a negative outlook.

According to a Moody's analyst, increasing pricing pressure and new store openings in The Fresh Market's operating areas will "make it very challenging to meaningfully improve profitability in the next 12 months." The analyst quoted cited potential pressure from Amazon-Whole Foods.

In addition to the credit rating downgrade, Moody's also downgraded the rating on The Fresh Market's $100 million revolving credit facility, as well as the rating of its $800 million senior secured notes.

The company was acquired last year by Apollo Global Management for about $1.4 billion. The Fresh Market currently has 176 stores in 24 states.

Mixed reviews for Lidl so far

A recent story on reported that shoppers are giving Lidl's new U.S. stores mixed reviews. The German grocer currently has 41 stores open in five states, with plans to establish at least 100 stores from New Jersey to Georgia by next summer (although multiple sources have reported delays in store openings due to slow sales).

According to the story, shoppers have been impressed with Lidl's low prices, bakery section, organic fruit, fresh produce and wine selection. However, shoppers have complained about the merchandise mix, having to purchase shopping bags, the limited assortment of brands, inconsistent service, and items being out of stock.

Sunday, October 29, 2017

Vince 'Jim' Genuardi, supermarket pioneer, dead at 88

Vincent "Jim" Genuardi, who along with his brothers built the Genuardi's Family Markets supermarket chain, died earlier this month. He was 88 years old.

At its height, the Genuardi's chain had 33 stores and 7,000 employees in Pennsylvania, New Jersey and Delaware.

Genuardi's daughter, Lisa Genuardi Wilson, said her father "was part of the committee within the National Grocers Association that paved the way for beer and wine in supermarkets. He spend a lot of time way back in the late '80s in Harrisburg, fighting for the rights we have in select (grocery) stores today."

Jim Vuotto, who worked for Genuardi's for 48 years, said Genuardi "was a pioneer for using bar codes. We were also the first company where every manager in the store was food certified. That was huge."

"They were all an incredible, community-oriented family," Vuotto said. "All the brothers had their own expertise area. Jim was groceries, Charles ran produce, Joe ran frozen food, Tom ran meat, and Frank did real estate."