Tuesday, September 19, 2017

Kroger drops lawsuit against Lidl

The trademark suit filed by Kroger against Lidl in July for allegedly copying its "Private Selection" generic brand name and logo has been dismissed. Both sides agreed earlier this month to dismiss the federal case with prejudice, which means the case can not be refiled.

Kroger had charged Lidl with violations of federal trademark and service mark infringement, unfair competition, dilution, and a violation of Virginia's Consumer Protection Act. The company was seeking damages of $75,000 and an order preventing Lidl from selling its "Preferred Selection" items.

It is believed that Kroger reconsidered its case when a judge ruled against the company's request for a preliminary injunction that would have prevented Lidl from using its own "Preferred Selection" logo. The judge ordered a jury trial and indicated that he was skeptical of Kroger's ability to prove its claims.

Whole Foods traffic up 25% in first two days of Amazon takeover

In the days before Amazon's highly-anticipated August 28 takeover of Whole Foods, Amazon promised significant and immediate price cuts, and as previously reported, the company delivered (Amazon slashes prices at Whole Foods...). Two weeks later, Foursquare Labs, Inc. reported that Whole Foods experienced a 25% traffic bump nationally in the first two days after the takeover.

Stay tuned for more reports on Amazon's affect on Whole Foods and the overall food retail market.

Kroger scraps long-term growth targets, plans to invest in pricing and tech

Kroger announced earlier this month that it has scrapped the long-term earnings-per-share growth targets that it established in 2012. Rather, the company plans to invest in pricing and technology amid increased competition from Walmart and Amazon, as well as Aldi and Lidl.

"We are re-prioritizing and accelerating investments in our 'Customer 1st Strategy' in order to anticipate and meet rapidly evolving consumer demands to shop with us for anything, anytime, anywhere," said Kroger CEO Rodney McMullen. "Our transformation is all about redefining the customer experience."

Although the company will release more details at its next investor conference, McMullen revealed that Kroger plans to invest in a store-wide space optimization initiative to spur sales and growth, and would continue to make investments in price.

Dollar stores not being hurt by big retailer price wars

Despite analysts' fears that dollar stores could become collateral damage in the price wars being waged between big retailers like Walmart and Kroger, sales forecasts for Dollar General and Dollar Tree remain strong. Dollar General expects net sales to increase by five to seven percent for the year ending February 2, and Dollar Tree expects a similar increase for the year ending in January.

In contrast, Walmart and Kroger anticipate low single-digit growth.

"The big advantage that dollar stores have is that, given their store footprint and the real estate they need, they can exist in small towns where Walmart or supermarkets are not going to go," according to Euromonitor analyst Jared Koerten.

In an article last month, The New York Times said that dollar stores, which operate on razor-thin margins, are sprucing up stores, stocking more national brands, selling food and fresh produce, and opening more stores.

Moody's analyst Mickey Chadha added that "dollar stores... also offer home products, seasonal products, electronics, apparel and accessories that are higher margin."

Tuesday, August 29, 2017

Amazon slashes prices at Whole Foods on first day of merger, more changes to come

Media reports around the country reported yesterday that on the day Whole Foods merged with Amazon, prices were slashed on several items at stores around the country. Orange signs throughout the stores with Whole Foods and Amazon logos promised "more to come..."

Price reductions - some as high as 43% - were found on items like tomatoes, organic Fuji apples, avocados, bananas, Atlantic salmon, tilapia, and grass-fed ground beef. Amazon Echo and Echo Dot devices were on sale at a New York City store for $99, down from $179.

Conventional grocery stores have historically enjoyed a significant price advantage over Whole Foods, due in part to advantages in scale, logistics and category management, all of which are issues Amazon plans to help Whole Foods address.

Last week Amazon said it would embark on a plan to have Amazon Prime take over the Whole Foods loyalty program and eventually provide "special savings and in-store benefits" for Prime shoppers. The company also plans to install lockers at select Whole Foods stores to allow for delivery of online orders.

And yesterday, many of Whole Foods' private label products - including 365 Everyday Value, Whole Paws and Whole Catch - were available for online ordering and delivery through the Amazon's various channels.

Walmart partners with Google, expands Uber delivery service

Walmart and Google announced last week that a new partnership between the companies will allow shoppers to use Google's apps and devices to shop at Walmart.

According to a story in Supermarket News, Walmart customers will soon be able to link their accounts to Google and receive personalized shopping results based on past purchases using Google Express, Google Assistant or a Google Home device. Walmart will fulfill orders made through Google at no extra charge.

According to the companies, "hundreds of thousands" of items will be available through the service. (Walmart.com has about 67 million SKUs available for sale.)

Walmart ecommerce CEO Marc Lore said the partnership is "just the beginning," adding that voice shopping, which will be possible through Google, will be expanding its capabilities in the near future.

Walmart and Uber team up for home delivery

In a separate announcement, Walmart said last week that it plans to expand its grocery home delivery service through Uber to the Dallas and Orlando markets. Walmart began testing Uber delivery over a year ago in Phoenix.

Customers who choose home delivery through Uber are charged $9.95 per order.

Perhaps the bigger news is that the fleet of Walmart Uber delivery cars have giant models of fruit and vegetables on their roofs.

Thursday, August 24, 2017

Instacart to service PriceRite stores in PA's Lehigh Valley

PriceRite Supermarkets announced yesterday that it is expanding its partnership with Instacart to include the Lehigh Valley, where the grocer has two stores - one each in Allentown and Bethlehem. Instacart already operates in the Lehigh Valley, where about 206,000 households can shop online at Wegmans, Whole Foods and Costco, and have their purchases delivered to them for a fee.

Instacart is already offered at many PriceRite locations in Connecticut, Maryland, Massachusetts, New York, Rhode Island and Virginia.