Whole Foods and Instacart end partnership, 56 workers let go

Whole Foods and Instacart announced earlier this month that the two companies have "mutually agreed" to end their delivery services partnership, effective May 15. As a result, 56 Philadelphia-area workers have been laid off.

The end of the Whole Foods - Instacart relationship did not come as a surprise to industry analysts, many of whom predicted the change since Amazon purchased Whole Foods in 2017. Whole Foods currently offers Prime Now, a one- and two-hour delivery service in more than 60 U.S. cities, including Philadelphia.

Instacart remains a strong presence in the Philadelphia market, as it has relationships with Reading Terminal Market, CVS, Aldi, Sprouts Farmers Market, Sam's Club, Wegmans, Acme, and Costco. Overall, the company is in 5,500 cities and delivers from nearly 20,000 stores.

"The U.S. is nearly a $1 trillion grocery market, and last year we saw almost every major grocer in North America bring their delivery business online in a significant way," said Instacart CEO Apoorva Mehta in a statement last year. "We believe we're in the early stages of a massive shift in the way people buy groceries, and we expect that one in five Americans will be shopping for their groceries online in the next five years."

Price comparison finds Whole Foods and Acme as most expensive in Greater Philly

A December story on Philly.com reported the findings of a Consumers' Checkbook study that compared prices of 19 grocery stores in the region. The lowest prices? Walmart. The highest? Whole Foods.

"When Amazon purchased Whole Foods last year, many consumers were excited by the prospect of paying Amazon-like prices for Whole Foods-quality products," said Checkbook Executive Editor Kevin Brasler. "But we're not there quite yet."

Checkbook staff members checked prices on 154 common items, and they surveyed thousands of consumers to assess the quality of the products and services offered at the stores. Although Whole Foods scored poorly on price, it was one of the highest rated grocers.

Unfortunately for Acme, it was not only one of the highest-priced grocery chains, but it was also one of the lowest rated. Only Whole Foods was more expensive.

The highest rated store in the region was Wegmans, and their prices came in at three percent below average.

Lidl planning to take part of vacant Acme in Lansdale, PA

Lidl presented plans to Towamencin Township last month to take over about half of the former Lansdale, PA Acme that closed last summer. Acme occupied about 60,000 square feet.

"We're definitely looking at opening this year, this calendar year. That's the hope," said Sam Kachidza, Real Estate Manager of Acquisitions for Lidl U.S.

The site is just two miles from two existing full-service supermarkets - Giant and ShopRite, and two miles from Ralph's Corner Shopping Center, where Aldi is under construction.

So far Lidl has one store open in Pennsylvania - on MacDade Boulevard in Folsom, and the company is actively looking for more. Lidl stores in Lower Providence Township and Royersford are also planned.

Albertsons and Rite Aid announce merger; new company to have $83 billion in sales

Albertsons and Rite Aid announced yesterday that the companies plan to merge into a new publicly traded entity with an estimated $83 billion in annual sales. It is expected that the deal will close during the second half of the calendar year.

Here are some of the details of the planned merger:

• Albertsons' private food label products will be sold in Rite Aid stores, and most Albertsons pharmacies will be rebranded as Rite Aid.
• The new company will operate about 4,900 locations, 4,350 pharmacy counters and 320 clinics across 38 states and Washington D.C. It will service more than 40 million customers per week.
• The name of the company has not been determined, but it will have dual headquarters - Albertsons' current home in Boise, ID, and Rite Aid's current home in Camp Hill, PA.
• Rite Aid's John Standley will become CEO of the combined company, and Albertsons' Bob Miller will serve as Chairman.
• The company says it is too soon to determine if any overlapping stores will close. In the Greater Philadelphia market, both Albertsons (Acme Markets) and Rite Aid have a strong presence.
• According to Burt Flickinger III, managing director at the Strategic Research Group, "(Rite Aid) will get Albertsons distribution power and they both have good distribution centers. It is a strategic triumph for Albertsons, and whereas Kroger is selling off assets like convenience stores, Albertsons is profitably growing and making strategic acquisitions."
• In exchange for every 10 shares of Rite Aid common stock, Rite Aid shareholders will have the right to elect to receive either one share of Albertsons Companies stock plus $1.83 in cash, or 1.079 shares of Albertsons Companies stock. Depending on the result of the election, Rite Aid shareholders will own a 28% - 30% stake in the combined company.
• Walgreens and Rite Aid planned to merge last year, but the deal encountered resistance from the FTC and fell apart. Shortly thereafter, Walgreens agreed to acquire 1,932 Rite Aid stores and select distribution centers. According to Bloomberg, the newly formed company will have fewer pharmacy counters than Rite Aid did before it agreed to sell the stores to Walgreens. 

Amazon introduces home delivery from Whole Foods

On Thursday Amazon introduced free two-hour delivery of certain Whole Foods Market items between the hours of 8am and 10pm in select zip codes in Austin, Cincinnati, Dallas and Virginia Beach. Orders can be made via primenow.com or the Prime Now app.

Amazon expects to expand the service across the U.S. later this year.

According to Amazon, Prime customers can shop for thousands of Whole Foods items, including produce, bakery, dairy, meat, seafood, floral and everyday groceries. Select alcohol is also available for delivery. Prime members receive two-hour delivery for free, and "ultra-fast" delivery within one hour for $7.99 on orders of $35 or more.

Many traditional supermarkets already offer home delivery services. Ahold (Giant, Stop & Shop) was one of the originators with Peapod, ShopRite offers delivery provided by individual stores, and Acme partnered with Instacart earlier this year to delivery orders "in as little as two hours."

ShopRite tops in New Jersey with 139 stores

A story on NJ.com last month listed the 10 biggest supermarket chains (by number of stores) in New Jersey. Here's the list.

ShopRite - 139 stores
Acme - 77
Stop & Shop - 61
Target - 44
Aldi - 42
Walmart - 29
BJ's Wholesale Club - 23
Kings Food Market - 23
Save-A-Lot - 22
Key Food - 22

Stores in New Jersey with fewer locations include Whole Foods, Trader Joe's, Wegmans, Weis Markets, and soon... Lidl.

Fresh Grocer not leaving UPenn site anytime soon

I reported in April about the kerfuffle in the University City section of Philadelphia between Fresh Grocer and UPenn (Fresh Grocer and UPenn in litigation over Acme deal). Well, the fight rages on.

Last spring the University of Pennsylvania announced that Acme would replace Fresh Grocer, stating that the incumbent grocery store failed to renew its lease on time. UPenn ordered Fresh Grocer to leave the premises by March 31, 2017.

However, Fresh Grocer disputed UPenn's cliam and said they had no intention to leave. And according to a story last month in The Daily Pennsylvanian, Fresh Market Store Manager Dawn Goldstein said recently that "we're here forever."

Although "forever" may not be accurate, they certainly won't be leaving anytime soon. The Philadelphia Court of Common Pleas website recently listed June 4, 2018 as the projected trial date.

Stay tuned.

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

Acme lowering prices

According to reports, Acme is advertising "thousands" of new lower prices in sales flyers released this morning. The price breaks come amidst the continued expansion of Aldi and ahead of Lidl's anticipated Greater Philadelphia store openings. Aldi is known as grocery's low price leader (lower than Walmart!), and reports indicate that Lidl's new stores in North Carolina and South Carolina feature prices on par with Aldi.

Acme's campaign is one of the first major shake-ups since Jim Perkins returned to his role as president. In Perkins' previous tenure as president, he used lower pricing to help turn the company around.

Sources have told Supermarket News that some of the A&P stores acquired by Acme in 2015 have not performed as well as expected.

Wegmans tops Consumer Reports list again

Wegmans grabbed the top spot in a survey of grocery chains conducted by Consumer Reports, which received feedback from nearly 58,000 subscribers. Wegmans has held the top spot in the annual survey since 2006.

For 2017, the company received excellent ratings in categories such as cleanliness, fresh store-prepared foods, staff courtesy, checkout speed, produce quality and variety, meat/poultry quality, healthy options and local produce quantity.

Market Basket finished second, followed by Trader Joe's, Publix and Fairway Stores. Costco and Aldi received good marks, while Whole Foods, Kroger, BJ's, ShopRite, Giant and Weis were further down the list. Acme received poor marks, and Walmart finished last.

Sprouts Farmer's Market coming to Philly, South Jersey

Sprouts Farmers Market, an organic and natural foods grocer with 268 stores in 15 states, is reportedly planning on a new store in Philadelphia, PA and Moorestown, NJ. Both stores would represent the first in each state.

The Philadelphia store is planned for Lincoln Square at Broad Street and Washington Avenue in South Philadelphia, a mixed-use development that Kimco is involved in. The Moorestown store would inhabit part of the space in the Moorestown Mall that Macy's recently vacated.

Sprouts expansion to the northeast comes at a time when sales of organic food has been soaring in the U.S. Until recently, Whole Foods has owned most of the organic market in Greater Philadelphia. However, Mom's Organic Market and bFresh have recently entered the market, and several traditional and discount grocery stores - like Aldi and ShopRite - have been increasing their organic and natural foods offerings. Newcomer Lidl is expected to offer a significant variety of organics, as well.

What this all leads to is "a price war of unprecedented proportions," according to Burt Flickinger III, managing director at Strategic Resource Group.

Nationally, Sprouts had reported that they have 63 sites approved for new stores and 43 signed leases "for the coming years."

As reported previously, Albertsons (Acme) is exploring an acquisition of the Sprouts chain.

Fresh Grocer, UPenn in litigation over Acme deal in University City

The Philadelphia Business Journal reported last week that Acme signed a lease with the University of Pennsylvania for a 34,500 square foot store on Walnut Street in University City. However, Fresh Grocer currently operates a store there and doesn't plan to leave, even though Penn notified them that their lease expired on March 31.

Penn's claim that Fresh Grocer missed the deadline to renew its lease is disputed by Wakefern, the cooperative that Fresh Grocer is a member of. Attorneys are now heavily involved...

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.

Acme to be repaced by residences in Society Hill, Philadelphia

The Acme store in Philadelphia's Society Hill will close once its lease expires in two years and be replaced by a residential building, according to a report in today's Philadelphia Inquirer. The report says that Alterra Property Group received a conditional zoning permit last week that allows for the demolition of the current building as well as the construction of a five-story structure with 43 underground parking spaces.

Neighborhood residents and the Society Hill Civic Association oppose the project, which needs to be reviewed by the Philadelphia Historical Commission since it's located within a historical district.

Acme acquired the store after A&P's bankruptcy in 2015. It had been operating for several years as a Super Fresh.

Acme may replace Fresh Grocer at UPenn

Philly.com reported earlier this week that the Fresh Grocer on the University of Pennsylvania's campus in Philadelphia may be replaced by Acme. Acme confirmed that they have been in talks with UPenn about the location.

According to the Philly.com story, Fresh Grocer, which has been open and operating since 2001, "failed to exercise its renewal right in a timely manner."

Fresh Grocer had recently received approval to sell wine at the store, and has been selling beer for over a year.

Acme to open new store in South Philly property formerly occupied by ShopRite

Acme Markets and The Goldenberg Group announced today that the former ShopRite in South Philadelphia's Snyder Plaza Shopping Center would be renovated and opened as a new Acme supermarket in 2017. The Goldenberg Group owns the property.

The 54,415 square foot store is slated to have a beer and wine shop, and a Starbucks café. In addition, the store's exterior will receive an updated façade and new points of entry. Improvements are planned for other parts of the shopping center as well.

Earlier this year ShopRite relocated to a bigger store on Oregon Avenue that was formerly occupied by Pathmark.

Albertsons on the verge of purchasing Price Chopper

Reports earlier this week state that Albertsons (Acme, Shaw's, Safeway, etc.) is "on the verge" of acquiring Price Chopper, the leading supermarket by market share in the Albany, Schenectady and Glens Falls, NY markets. Price Chopper also has strong market share in Binghamton, NY, Utica, NY, Pittsfield, MA, Worcester, MA and Burlington, VT.

For the better part of this year, Price Chopper has been seeking financial partners to help transform its 135 stores to their new Market 32 format.

Reuters has reported that the price tag would be approximately $1 billion and would not include Price Chopper's real estate assets. Supermarket News estimated that Price Chopper's 2015 sales were $3.7 billion.

The purchase by Albertsons would fill the gap between its Pennsylvania-based Acme and Massachusetts-based Shaw's brands.

Not that it's relevant, but... I grew up in Price Chopper country and my first job was as a stock boy for one of the Clifton Park, NY stores. As an employee, I was mediocre at best (it's safe to say that price labels didn't always make it onto the products at the bottom of the freezer!).

Albertsons' IPO plans at a standstill

Albertsons' IPO plans have been halted again, this time due to price deflation that has affected sales and earnings across the supermarket industry. Albertsons (Acme, Albertsons, Safeway, Vons and several others) originally proposed a public offering a year ago, but postponed it when Walmart's announcement about earnings pressure prompted an industry-wide drop in valuations.

Analysts are not optimistic that Albertsons will be able to achieve an IPO at the valuations contemplated last fall, when price deflation wasn't an issue and consumers were not as cautious as they seem to be now.

Albertsons banners - including Acme - to expand e-commerce

On the heels of a recent analyst report recommending that food retailers slow their e-commerce efforts, MyWebGrocer announced that several Albertsons banners - including Acme - plan to add "click-and-collect" and delivery service on its platform. Albertsons has used MyWebGrocer's software since 2012 for online shopping lists and circulars.

A report released earlier this month by Tabs Analytics reported that just 4.5% of all shoppers are using the Internet to buy groceries six or more times per year, and concluded that "consumers have turned their backs on buying groceries online."

Related story: Study concludes that food retailers should focus on families, not e-commerce or millennials

Acme performance improving thanks to new playbook

Prior to Albertsons takeover of Acme in 2013, same-store sales at the one-time Greater Philadelphia market leader were negative in 27 of the previous 28 quarters. Today, thanks in large part to the parent company's "operating playbook," Acme is performing better than it has in years.

According to a Supermarket News story last week, new leadership immediately boosted store standards, customer service and community involvement. In addition, it empowered local buyers to make buying and merchandising decisions, and added "aggressive muscle" to price and promotions.

These efforts paid off quickly. And recently, Acme aggressively pursued stores left vacant by the A&P bankruptcy filing. In all, they bought 73 former A&P, Pathmark and SuperFresh stores for $293 million. The purchase returned Acme to the Northern New Jersey, New York and Connecticut market.

The company's "operating playbook" was applied to the purchased stores, and customers are seeing the results. One Acme shopper told Supermarket News that "customer service is now a major priority, and the store has become the cleanest grocery store I've ever shopped in."

Industry expert Bob Gorland of Matthew P. Casey & Associates believes Acme is a healthier company than it used to be. In addition, he pointed out that they are doing things they weren't doing a few years ago, like remodeling more stores and adding beer cafes.