Friday, December 28, 2018

Kroger debuts self-driving delivery vehicles

Kroger announced that it has started using unmanned vehicles for online grocery deliveries. The services was launched at a Fry's Food Store in Scottsdale, AZ. It follows a successful pilot with Nuro, a California-based robotics and artificial intelligence specialist.

To use the service, customers shop for their groceries at FrysFood.com or via their mobile app, and place their order according to available time slots. The orders can be delivered that day or the next day, and are brought to customers' homes by the Nuro R1 vehicle or by self-driving Prius cars. There is a $5.95 delivery fee and no minimum order.

Instacart and Whole Foods to end partnership

Instacart said earlier this month that it will "wind down" its nearly five-year old partnership with Whole Foods. Instacart plans to lay off 243 of its 1,415 Whole Foods personal shoppers. However, the company said it expects to place more than 75% of its affected personal shoppers in similar jobs at other retailers in their area.

Industry experts had anticipated this move ever since Amazon purchased Whole Foods in 2017. As of June 2018, all Whole Foods stores in the U.S. were connected to Amazon Prime, and Prime Now delivery is currently available at Whole Foods stores in 63 cities.  In addition, Prime Now Pickup is offered at stores in 22 markets.

Despite losing the Whole Foods account, Instacart continues to expand, and currently works with more than 300 retailers. The click-and-collect Instacart Pickup program is expected to rollout soon to nearly 200 grocery stores in 25 metro markets.

Grocery Outlet to open 40 new stores in 2019

Grocery Outlet, the California-based discount food retailer, has quietly ramped up its growth as competitors like Aldi and Lidl are making much more industry noise. Earlier this year the company opened its 300th store, and 40 new stores are expected for 2019.

Grocery Outlet, which purchased Amelia's stores in Greater Philadelphia a few years ago, operates stores in Pennsylvania, Oregon, Washington, Idaho, Nevada and California. Southern California represents their largest region, with 70 locations.

According to a recent story in Supermarket News, Grocery Outlet offers 40% - 70% off nationally recognized brands. They purchase from manufacturers that have excess inventory and pass their savings on to consumers. As a result of this opportunistic approach, the lineup of products often varies with each shopping trip. And since the stores are locally owned (not franchised), the product lineup may also vary from store to store. Each owner has the ability to choose what products they want to buy and sell.

"People love to save money, there's no question," said Phil Lempert, founder and editor of SupermarketGuru.com. "If you can combine that with a treasure hunt, from a consumer standpoint, it's great."

Although the products may differ from week to week, Grocery Outlet's inventory is predominantly made up of national brands, unlike Aldi and Lidl, who only offer a limited amount of national brands.

Recently Grocery Outlet has addressed its millennial customers, who are often their most vocal shoppers. Millennials seek both value and high quality, as well as an understanding of 'the experience of the food," according to Vice President of Marketing Layla Kasha. As a result, Kasha describes a new store in Los Angeles as "modern and hip, focusing on clean lines and a design aesthetic that matches the surrounding area."

Nationally, the model seems to be working, as Grocery Outlet recently surpassed $2 billion in annual sales, according to Supermarket News.

Wednesday, November 28, 2018

Lidl to open first store in PA

Lidl announced that its first Pennsylvania store will open next week in Folsom. The company, which operates about 10,000 stores in 29 countries, has 59 operating U.S. stores throughout New Jersey, Delaware, Maryland, Virginia, North Carolina, South Carolina and Georgia.

Lidl announced earlier this month that it plans to purchase 27 Best Supermarkets, mostly in New York.

In Pennsylvania, Lidl also has plans for stores in Philadelphia and Montgomery County.

Monday, November 26, 2018

Costco and Target are primed for growth, experts say

According to participants in Supermarket News' 23rd annual Financial Analysts' Roundtable, warehouse clubs, specifically Costco, may be primed for a growth surge.

Wolfe Research Managing Director Scott Mushkin said that Costco's broad mix of offerings make it a big draw.

"Costco, over time, has created more and more reasons to pay for that membership," Mushkin said. "It's an incredibly positive business model."

"They are probably the best merchants of any retailer I've ever covered," added Karen Short, managing director for equity research at Barclays Capital. "They keep pushing the envelope and keep pushing their vendors, and the deals and price point just keep getting better and better."

As for BJ's Wholesale Club, Mushkin had a negative outlook. "If there were a Costco and a BJ's next to each other, it doesn't make any rational sense to actually have a membership to BJ's because the offering is so much more extensive at Costco and the savings are better," he said.

The participants also singled out Target, which they believe could be a sleeping giant in grocery if it continues to improve its fresh offering and out-of-stocks, and improves on its execution. The panel cited Target's strong private labels and the company's ability to develop innovative departments and merchandising.


Study reveals that Whole Foods' prices have not improved under Amazon

A study conducted by Senior Analyst Chuck Grom from Gordon Haskett in New York found that prices at Whole Foods haven't changed much in the year since it was purchased, despite Amazon's promise of lower prices.

As published in a September story by Forbes.com, in seven pricing studies of a basket of 108 items over the course of a year following the acquisition, Grom found that the basket's aggregate price was just 0.8% below the price before the acquisition was completed. In addition, compared with Whole Foods' first round of price cuts in the Fall of 2017, the basket price actually inched up 1.3%.


Whole Foods to finally open in Newtown Square, PA

Long after the Whole Foods building was constructed at Ellis Preserve in Newtown Square, PA, it was announced that the store would open in January. Steve Spaeder, from Ellis Preserve developer Equus Capital Partners, said Amazon's purchase of Whole Foods delayed the opening by a year and a half.