Thursday, February 9, 2017

Walmart, Kroger and Costco top list of 75 food sellers in US and Canada

Supermarket News released its annual list of the Top 75 Retailers and Wholesalers. The list ranks the largest sellers of food (by revenue) to be consumed at home in the United States and Canada.

Here are some bulleted highlights that I have copied word-for-word from Supermarket News. I would suggest visiting their website for the complete study.

  • Natural and organic foods are still growing, but the retail beneficiaries aren't necessarily who they used to be;
  • Formats serving low-income shoppers - while still some of the industry's fastest growers due to unit growth - have seen their sales in disarray as their shoppers deal with reductions to federal food benefit programs and rising costs for housing and health care, while a slowly improving economy may be lifting some of their shoppers out of the channel; and
  • While Internet retailing remained a relatively small share of the pie, it became the subject of outsized ambitions by some of the industry's leading players, and a serious threat from digital natives like Amazon, which at year-end announced plans for a leap into the physical food retailing world. Initiatives to add click-and-collect shopping capabilities speak to a trend among food retailers to improve the convenience of their offerings to shoppers, and drive more sales from existing units, sources said.
  • All this occurred while a nearly unprecedented stretch of deflating prices triggered chaos throughout the supply chain - an event analysts say could dampen sales at least through the first half of 2017.

Here are the top 10 retailers and wholesalers, plus other notable companies on the list.

1.  Walmart
2.  Kroger
3.  Costco
4.  Albertsons
5.  Ahold Delhaize
6.  Loblaw Cos.
7.  Publix
8.  Target
9.  C&S Wholesale Grocers
10. Walgreens


12. CVS
15. Dollar General
16. Supervalu
16. Wakefern
19. 7-Eleven
20. Trader Joe's
21. Aldi
22. Dollar Tree
26. BJ's Wholesale Club
30. Rite Aid
30. Wegmans
44. Weis Markets
54. Grocery Outlet
56. The Fresh Market
61. Amazon

Three Wakefern members were listed as separate entities on the list, including Saker ShopRite (56), Village Super Market (61), and Inserra Supermarkets (69).

Asian grocer 99 Ranch opening stores in New Jersey

Asian supermarket 99 Ranch plans to open at least three stores in New Jersey this year, according to published reports. The first store, a 60,000 square foot former Pathmark, opened recently in Edison, NJ, about a mile from an H Mart, which is also an Asian grocery chain. 99 Ranch stores are also slated for Jersey City and Hackensack.

The chain is owned and operated by California-based Tawa Supermarket, Inc. and has 42 additional locations in its home state, Washington, Nevada and Texas.

99 Ranch focuses on products from China, but also includes a broad assortment of foods from other Asian countries including India and the Philippines.

Acme to close Burlington, NJ store

Acme announced that it would close its Burlington Township, NJ store by February 16 due to under-performance. With the closure last year of Mattson's Market, a family-owned store that had been in existence since the mid-20th century, ShopRite and Walmart are the remaining grocery stores servicing township residents.

Albertsons - Price Chopper deal called off

According to a Supermarket News report in late January, Albertsons has dropped its pursuit of Price Chopper, which is headquartered in upstate New York. It had been reported in late 2016 that Albertsons was in "advanced talks" to purchase the supermarket chain for about $1 billion.

It is likely that Price Chopper will continue to seek avenues for new investment, but a strategic acquisition is now unlikely, according to a Supermarket News source.

Strategic Resource Group's Burt Flickinger anticipates that the 135-store chain would seek alternative means of financing such as sale-leasebacks or a family investment in partnership with private equity.

Tuesday, January 31, 2017

U.S. grocery sales volume weakened in December

According to published reports, U.S. grocery sales continued to slump in December, despite price deflation.

According to IRI, dollar sales were down by 1.7% (excluding mass merchants like Walmart) in the four weeks ended December 18, 2016 as compared to the same period a year earlier.  In addition, sales volume was down by 2.3%. These decreases represent the weakest monthly sales growth figures since November 2013, when sales were affected by a Thanksgiving calendar shift.

BMO Capital Markets Analyst Kelly Bania was at a loss to explain the slowdown.

"We initially thought maybe there was a trade-out to restaurants. But we haven't seen anything in the restaurant data to support that," Bania said. "It doesn't look like it's a shift to Walmart either. We don't have a great explanation for it."

Burt P. Flickinger III, managing director for Strategic Resource Group, suggested that holiday promotions for department stores and mass merchants may have drawn more dollars away from grocery than usual. He also mentioned relatively light promotions from consumer goods companies as a possible culprit.

Monday, January 30, 2017

Whole Foods closing food production facilities

Whole Foods announced earlier this month that it plans to close three food production facilities along the East Coast. The closures are believed to be part of the company's efforts to streamline operations and reduce costs. The facilities closing are in Everett, MA; Landover, MD; and Roswell, GA.

The operations at the three locations will either be outsourced or moved in-store. The Boston Globe reported that Whole Foods had already ceased production in the Everett facility and had outsourced the work to suppliers using Whole Foods recipes.

A report in the Austin American Statesman noted that the three facilities were the last remaining Whole Foods prepared foods commissaries in the U.S. Prepared foods account for about 19% of company sales each year.

According to an industry analyst, it's much easier now for the company to outsource food production compared to when the facilities were first built.

Save-A-Lot closing west coast stores

Save-A-Lot, under the ownership and guidance of private equity firm Onex since last fall, announced earlier this month that it would close all 13 of its existing stores in California and Nevada, as well as the distribution center servicing them.

Supervalu, the discount grocer's previous owner, saw the west coast as a great opportunity, but current CEO Eric Claus told Supermarket News that the investment required to build brand equity and store density would be better deployed on initiatives where the chain was better established.

Save-A-Lot currently has about 1,400 stores from Colorado and states to the east.

The 13 stores are expected to close in a matter of weeks.