Friday, January 19, 2018

Kohl's plans to add groceries to select stores

According to reports, Kohl's is looking for "well capitalized companies" that it can partner with to offer groceries and drive traffic to its stores.

Kohl's has streamlined their offerings in hundreds of stores in recent years, and several of those locations have excess space that can be used to showcase grocery items that draw customers in more frequently. For stores that are part of a larger shopping center, selling groceries may be restricted by other tenants, or waivers may be needed by certain co-tenants.

The company currently operates about 1,100 stores, most of which are in the 80,000 - 90,000 square foot range.

According to the Milwaukee Journal Sentinel, the grocers that partner with Kohl's would have their own entrances and would be separated by an internal wall. It is expected that Kohl's will provide more information during its March 1 quarterly earnings call.

Kenny ShopRites giving bonuses as a result of tax reform

Kenny Family ShopRites, which operates six supermarkets in Delaware, announced earlier this month that as a result of the new tax reform legislation, it would give $150 to 1,000 of its non-management workers, and invest $150,000 in employee training and development.

According to President and CEO Christopher Kenny, "Our ability to provide bonuses and training to our employees demonstrates the far-reaching implications of this tax reform."

Thursday, January 4, 2018

Is Target next for Amazon?

A former analyst who followed Apple closely and was known for his accuracy in predicting their financial performance over the years made news recently by forecasting that Amazon will buy Target in 2018.

"Target is the ideal offline partner for Amazon for two reasons, shared demographic and manageable but comprehensive store count," said Loup Venture Co-Founder Gene Munster. "Getting the timing on this is difficult, but seeing the value of the combination is easy."

Analysts have been making several predictions about Amazon's next deal. Companies mentioned recently have included Lululemon Athletica, Abercrombie & Fitch, Bed Bath & Beyond, and Advanced Auto Parts. One analyst foresees Amazon purchasing a small- or mid-sized bank.

Wednesday, December 27, 2017

Discount grocers are getting it right... here's how

Earlier this month Supermarket News listed six reasons that discount grocers continue to grow, and provided the following background.

Ten years ago, two-thirds of U.S. shoppers reported that supermarkets were their primary grocery channel, as per the Food Marketing Institute's 2016 U.S. Grocery Shopping Trends Report. However, in 2016, only 49% of U.S. shoppers said that supermarkets were still their primary grocery channel. The average shopper is now using five to seven retail channels and two to three shopping channels on a regular basis. More than half of Americans feel overworked and overwhelmed, making convenience increasingly important.

Here are the six things that discount grocers are getting right, according to Supermarket News, and below is a link to the article that provides more detail on each point.

  • Good deals attract consumers from all economic levels.
  • Stores that are modern, convenient and offer a more supermarket-type experience with great value attract customers.
  • Discounters benefit by offering a wide selection of products including wine, produce, health and beauty, bakery and organic products.
  • Discounters are customer-obsessed about their brand and model, and keeping it very simple.
  • Discounters are proving private labels can provide extremely good quality and amazing values.
  • Discounters are adopting multi-channels.

Viewpoints: What discount grocers are getting right

Report finds that grocery shoppers visit multiple stores

A report from Acosta found that 76% of shoppers visit more than one store each week for groceries, and most of these consumers shop around to find cheaper products. In addition, 37% visit other stores to ensure they have fresh food, and 33% do so because they can't find all the brands they like at one location.

The report also notes that 53% of shoppers choose a retailer based on a preference for specific store brands, up from 34% in 2011.

So, grocery chains should take note (and most likely they are) that while price is a motivating factor for grocery shoppers, selection, freshness and private label quality are also very important. And while store traffic may be up overall due to consumers shopping around and making multiple grocery trips each week, it is likely that basket size per visit is down.

The findings help explain the proliferation of non-traditional food retailers, as consumers aren't finding everything they want at a traditional grocery store.

Costco online sales up 43.5%

Costco reported earlier this month that its online sales increased 43.5% compared to the same quarter last year, largely due to website improvements, the ability for shoppers to buy items online and pick them up at the store, and the recent launch of new delivery options. In addition, the company reported that it continues to get a revenue boost from customers who initially come into the store for food, but end up purchasing non-food items as well. (Those who shop at Costco know that it's hard to get out of the store for less than $200!)

Even with the online boost, about 95% of Costco's sales occur in stores.

Costco, the third largest grocery retailer in the U.S. behind Walmart and Kroger, reported net income in the third quarter of $640 million, a 17% increase from the same quarter last year. Membership fee revenue climbed 9.8% to $692 million. The company raised membership fees in June.

"Membership trends and renewal rates are still at the 89% and 90% level," according to Edward Jones Analyst Brian Yarbrough. "I think the model continues to work very well. They've got food that's over 50% of their business, and that drives traffic. And they have great deals, and that creates a treasure hunt nature."

Tuesday, December 26, 2017

Wakefern introduces Price Rite Marketplace

The Wakefern Food Corp cooperative launched a rebranding of the Price Rite banner and unveiled its first fully rebranded store under the new Price Rite Marketplace name in Secane, PA last month. According to a story in Supermarket News, the store is brighter and includes new signage, a whitewashed wood backdrop, and various new offerings.

Wakefern said it plans to roll out the look to all 65 of its Price Rite locations in the next year.

The new offerings at Price Rite Marketplace include a "Sweet Spot Dessert" case, expanded private label offerings, a "Meals to Go" section, and the addition of Certified Angus Beef and Perdue's No Antibiotics Ever Chicken.

"Price Rite has become the strongest traditionally sized extreme-value retailer in the Eastern U.S.," according to Burt Flickinger, managing partner at Strategic Resource Group. "In relatively small amounts of space, they have some of the highest sales per square foot and sales per store of any of the extreme-value stores."

Price Rite stores typically have from 22,500 - 35,000 square feet of selling space, according to Flickinger.