Monday, May 14, 2018

Study shows that online grocery shopping and meal kit purchases are increasing

A recent study by Valassis concluded that consumers are embracing new grocery shopping options like online ordering and delivery, and meal kits. Of 1,000 U.S. adults surveyed, 7% said they order groceries online weekly, but that increases to 14% for parents, 12% for millennials, and 15% for millennials with children.

In addition, 5% of all respondents said they order a meal kit online once a week, compared to 10% of parents, 10% of millennials, and 14% of millennials with kids.

Among those ordering groceries online, in-store pickup was a preferred option. Eight percent of all shoppers polled said they order groceries online and pick them up from their local store, compared to 17% of parents, 14% of millennials, and 20% of millennials with children.

"From home delivery services to the growing presence of organic items, emerging channels and trends are changing the way shoppers buy and, in turn, how brands reach and activate their target audiences," said Valassis Chief Marketing Officer Curtis Tingle.

The study also reported the following:

Thirty-three percent of all shoppers reported that they buy only or mostly organic and natural products, compared with 48% of parents, 50% of millennals, and 60% of millennials with kids.

Overall, 69% of the shoppers surveyed save money with print, digital media and/or loyalty cards.

FIfty-six percent of those surveyed said they use grocery, drug, mass and/or supercenter savings apps, up from 51% in 2017 and 38% in 2016.

Instacart raises money to fuel expansion, add employees

Instacart announced last month that it received $350 million in financing from Coatue Management, a technology-focused hedge fund, and noted that it has raised more than $1 billion since 2012, with most of it still in the bank.

According to the company, the additional funding will be used to double its employee count, fuel expansion, and invest in new products and services.

Instacart is now used by North America's eight largest grocery retailers - Kroger, Albertsons, Publix, Costco, Ahold Delhaize, H-E-B, Loblaw and Sam's Clubs, not to mention regional grocers like Wegmans.

Friday, May 11, 2018

Amazon adding Prime perks at Whole Foods

After several weeks of speculation, the news broker earlier this month that Amazon is planning new Whole Foods benefits for its Prime members. According to a CNBC report, "the new perks will bring the might of Amazon's membership program to the grocery industry, folding Whole Foods into a network other grocers are struggling to compete with."

The report also stated that about 75 percent of Whole Foods shoppers are Amazon Prime members, but less than 20 percent of Amazon Prime members shop at Whole Foods.

Sources told CNBC that Whole Foods will begin offering Prime members an additional 10 percent off of already discounted products. The discount would be in addition to perks that have already been rolled out, including free delivery of Whole Foods products to Prime members in certain locations, 5 percent cash back when members use the Prime Visa rewards card at Whole Foods stores, and other exclusive member deals.

The news of these new perks has come at nearly the same time Amazon announced a $20 annual fee increase for Prime membership, and a couple weeks after Whole Foods announced the end of its loyalty program.

For food retailers, the new perks turn Whole Foods into a more formidable competitor, expanding its reach well beyond its 400 store footprint and combating the grocer's major weakness - high prices.

A&P sells off intellectual property

The Great Atlantic & Pacific Tea Co., which entered bankruptcy nearly three years ago before closing all of its stores, sold "substantially all of its intellectual property assets," which consist of its store banners and private labels. Hilco Streambank, a company retained by A&P in 2015, announced that it brokered the sale of 23 A&P brand names, including the following:

Supermarket Banners: Pathmark, Super Fresh, A&P, Food Emporium, Waldbaum's, Food Basics, among others

Private Labels: America's Choice, Greenway, Woodson & James, Hartford Reserve, Great Atlantic Seafood Market, among others

According to a Hilco spokesperson, the sale resulted "in a seven-figure overall recovery."

Some of the transactions were disclosed publicly, and they included the $1.75 million sale of Food Emporium IP assets to the Key Food Cooperative, and the $1 million sale of Pathmark IP assets to a unit of Foodtown operator PSK Supermarkets.

A&P, founded in New York City in 1859, was the world's largest retailer by 1930 with nearly $3 billion in annual sales and 16,000 stores.

Giant expands Peapod service in PA

Giant announced last week that Peapod's shopping and delivery services have become available to customers in a dozen new Pennsylvania zip codes, including stores in Reading, Birdsboro and Temple. The company says that 109 of the 170 stores under the Giant and Martin's banners are now within the geography of Peapod's delivery range.

Through the Peapod website or mobile app, customers can have groceries delivered as soon as the next day after the order has been placed. First-time customers get $20 off their first order and 60 days free delivery.

Giant, Martin's and Peapod are subsidiaries of Ahold Delhaize USA.

Sunday, May 6, 2018

Grocery store openings fell sharply in 2017

According to an annual "Grocery Tracker" report from JLL, grocery store openings dropped 28.8% in 2017 compared to the previous year. The report states that the decline reflects chains' efforts to reexamine their current footprints and rethink strategies to deal with new online and brick-and-mortar competition.

JLL said that California led the way in 2017 with 1.6 million square feet of new grocery store space. Virginia and North Carolina combined for 2.7 million square feet of new space, and Texas was described as "still one of the hottest states for grocery expansion."

Sprouts, Grocery Outlet, Aldi and Lidl were mentioned as notable chains that are expanding.

JLL's report said that investment in grocery-anchored centers grew 5.3% in 2017, and the company expects supermarkets to retain high interest as anchor tenants for shopping centers.

"It (grocery-anchored centers) was one of the only retail sectors to see growth in a year of low transaction volume," the study said. "Grocery-anchored centers remain a safe bet for investors, as overall transaction volume for retail has been down, indicating the asset remains a stable sector."

The study mentioned that the increase in smaller footprint stores is a clear trend - for more compact formats like Aldi and Trader Joe's, as well as for traditional supermarket chains and mass merchants like Walmart and Target.

"The grocers that can deliver the right in-store experience, combined with the right online pickup or fulfillment plan... are the ones that will thrive, whether their stores are 15,000 square feet with limited products or take up a footprint four times as large," said James Cook, JLL director of retail research.

Giant adding stores and fuel stations in PA

Ahold Delhaize USA announced last month that Giant will undertake a $70 million capital spending plan that includes six new supermarkets, major remodels to two stores, and five new fuel stations in the next two years. 

New stores are planned for East Stroudsburg and Walnutport, and new stores will replace older locations in Feasterville-Trevose, State College, Warrington and Broomall.

The stores being remodeled are in West Chester and Shrewsbury.

The company also said it would continue to invest in its Beer & Wine Eateries, of which Giant currently has 59. Overall, the grocery retailer has 171 stores in Pennsylvania, Maryland, Virginia and West Virginia.