Thursday, August 17, 2017

Seven grocers in top 30 U.S. private companies

Forbes published its 33rd annual ranking of America's largest private companies, and seven grocers landed in the top 30. (Cargill topped the overall list, with $109.7 billion in sales, followed by Koch Industries).

Albertsons, with several banners including Albertsons, Safeway and Acme, is third on the overall list and the top grocer, with $59.7 billion in sales and 273,000 employees.

Also on the list:

#7: Publix Super Markets
#10: C&S Wholesale Grocers
#12: HE Butt Grocery (H-E-B)
#16: Meijer
#25: Southeastern Grocer (Bi-Lo, Harveys, Winn-Dixie)
#27: Hy-Vee

Target focusing on grocery and new delivery service

Target announced earlier this week that it hired executives from Walmart and General Mills in an effort to boost its grocery business.  The company also announced that it would buy delivery logistics company Grand Junction so it could offer same-day delivery service to in-store shoppers.

Target and rival Walmart are continually making efforts to compete more successfully with Amazon, the leader in online sales and a growing force in the grocery business.

Target says they plan to start the delivery service at some New York locations, and then bring it to other major cities next year. Eventually it plans to use Grand Junction's software to speed up the delivery time for online orders.

Wednesday, August 16, 2017

Aldi to add Instacart online shopping in select markets

Aldi announced Monday that it would begin offering online ordering and delivery later this month via Instacart in Atlanta, Dallas and Los Angeles, with "potential for future expansion."

Instacart currently serves nearly 40 markets in 25 states, and provides online ordering and delivery for companies like Whole Foods, Wegmans, Giant, and others.

Report predicts that traditional supermarkets will decline rapidly

A report released by Inmar predicts that nearly one in four traditional grocery stores won't be around in five years. Inmar is an analytics and technology-enabled service provider in the retail space.

The report concludes that dollar share for traditional supermarkets will continue to decline through 2021, while fresh, limited assortment and warehouse stores will gain in dollar share and store count over the same period. In addition, food e-commerce is projected to grow at a rapid pace.

According to the report, store counts will decrease over the next five years by nearly 25% from about 25,000 to 19,000, while dollar share for traditional supermarkets will decrease from 36.5% to 33.7%.

The drug store is the only other significant channel projected to see a decrease in dollar share (-0.6%).

Inmar predicts that e-commerce food sales will more than double by 2021, from $33 billion, or 4% of the current food and beverage market, to $70 billion, or 8% of the projected market.

Limited assortment stores like Aldi, Trader Joe's and Save-A-Lot will grow by more than 21% or nearly 1,000 stores over the next five years, while their dollar share increases from 3.1% to 4.4%, according to the report.

Monday, August 14, 2017

Survey shows that 9% of households shop for groceries online

According to Gallup's annual Consumption Habits survey, just 9% of adults in the U.S. report that their household shops online for groceries at least once a month. On the other hand, almost all Americans report that someone in their family shops in person for groceries at least once a month, with 83% percent going at least once a week.

Also:

15% of U.S. adults between 18 and 29 say they purchase groceries online at least once a month. The numbers decrease to 12% for those 30-49,  10% for those 50-64, and 2% for those 65 and older.

Not surprisingly, working adults are twice as likely as those who are not working to shop for groceries online.

Wednesday, August 9, 2017

Walmart reacting to Lidl with aggressive pricing

Reports state that Walmart is reacting "quickly and aggressively" to Lidl's entry into the U.S. market. According to its website, Lidl now has 21 stores open in three states - North Carolina, South Carolina and Virginia - with plans in the next year for as many as 100 more in states from New Jersey to Georgia.

Since its first U.S. stores opened in June, Lidl has been hailed as the low price leader along with rival Aldi. But according to Rupesh Parikh, an analyst at Oppenheimer & Co., "Walmart is being really aggressive in terms of watching what Lidl, and presumably Aldi, are doing, and you can tell they are in a fight and not willing to give up customers."

"We found Walmart prices on like-for-like items were very compettive with both Lidl and Aldi," Parikh said.

Parikh also reported that several other retailers in current Lidl markets were reacting with lower prices, including Food Lion, Family Dollar, Dollar General and Target. The most aggressive pricing by all the food retailers has been in the private label category, which Parikh believes could lead to higher margins on other products in order to keep overall profits from falling.

Lidl's next U.S. market is likely to be Texas, where the German company recently opened a number of offices.

Sprouts expands relationship with Amazon

Despite speculation that Amazon's partnership with Sprouts Farmers Market may end due to the online giant's pending acquisition of Whole Foods, last week Sprouts confirmed plans to expand its relationship with Amazon Prime Now.

"Our partnership with Amazon Prime Now continues to grow," said Sprouts CEO Amin Maredia. "We will be delivering Sprouts products through the Prime Now service to over 20 locations across many of our major markets by year end."

Sprouts operates 260 stores in 15 states.