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."

Kroger may look to buy part of Rite Aid portfolio

The Cincinnati Business Courier reported on Monday that Kroger could be a prime bidder for some Rite Aid or Walgreens drug stores that will need to be sold when the two companies complete their merger later this year. Kroger was rumored to be interested in purchasing Rite Aid before the chain reached a deal with Walgreens.

Industry experts say that about 500 of Rite Aid's 4,600 stores will need to be sold.

Kroger, the nation's largest operator of traditional supermarkets, is also the nation's fifth largest pharmacy operator with 2,200 in-store locations. Leon Loewenstine, an investment strategist with RiverPoint Capital Management, believes such a deal would only make sense if Kroger planned to keep running any acquired drug stores, where they could keep using the chain's customer loyalty cards. Loewenstine compared the idea to Kroger's launch of stand-alone gas stations, which supplement their gas stations at Kroger supermarket locations.

"It would be a new venture, a new avenue of growth for the company," said Loewenstine. "They could compete with Walgreens and CVS. If anybody can do it, it would be Kroger."

Target food sales growing faster than overall company sales

Target reported this week that comparable food sales grew faster in the fourth quarter than overall company sales. The company views this growth as validation of the changes it continues to make in food assortment, freshness and presentation.

Target also said that it expects the replacement of its own pharmacies with the CVS brand should help grow traffic in the pharmacies at a faster rate than the company would have been able to do on its own. Chairman and CEO Brian Cornell added that the deal with CVS has already provided over $1 billion in net cash that Target is using to support its capital deployment priorities.

TargetExpress to open in Center City Philadelphia

Target announced last week that it plans to open a TargetExpress store next summer at 19th and Chestnut in Philadelphia, and according to reports, the company is already considering a second Center City location.

Earlier this year Target announced that it would open TargetExpress stores in urban areas, including San Francisco and Chicago.

The Philadelphia store is slated to be 21,000 square feet over two floors and will carry smaller items than typically found in full-size Target locations. The smaller items will allow carless customers to carry them and stash them in cramped apartments, according to a company spokesperson.

A decision has not been made yet as to whether there will be a pharmacy in the store. Earlier this week Target and CVS announced that the drugstore chain would acquire Target's pharmacy and clinic businesses.

Walmart leads list of top 75 food retailers

The Supermarket News released its annual list of the top 75 food retailers in the United States and Canada. Here's a summary:

The top 10:

1.  Walmart *
2.  Kroger
3.  Costco *
4.  Loblaw (Canadian grocer)
5.  Safeway
6.  Publix
7.  Ahold (Giant et al)
8.  C&S Wholesale Grocers
9.  Albertsons (Acme et al)
10. H-E-B

* includes sales of consumable items only

Also:

11. CVS *
16. Target *
17. Wakefern
18. Dollar General *
19. Whole Foods
21. Trader Joe's
23. Walgreen's *
25. Aldi
27. BJ's Wholesale Club *
31. Family Dollar *
32. Wegmans
36. Dollar Tree *
44. Rite Aid *
50. Weis Markets
59. The Fresh Market
62. Amazon.com *

ShopRite, Giant dominate Delaware Valley and Philadelphia market share

The annual Market Study issue, published by Jeff Metzger and friends at Food Trade News, came out last week and reported that ShopRite remained the supermarket leader in the 15-county Delaware Valley market, while Giant took over as the leader in the eight-county Philadelphia market.

"Other merchants may have opened more stores, made acretive acquisitions or achieved higher identical store sales gains," said the authors of the study in describing ShopRite's success, "but on the whole, nobody continued to protect market share, open new stores and have significant same store increases like the member/owners of Wakefern/ShopRite once again did."

Here is the list of Delaware Valley supermarket leaders*, as ranked by market share.

1. ShopRite/PriceRite - 30.08% market share
2. Giant/Carlisle - 21.74%
3. Acme Markets - 19.77%
4. A&P (Pathmark, Super Fresh, Food Basics) - 9.22%
5. Wegmans - 4.72%
6. Save-A-Lot - 3.43%
7. Whole Foods - 3.23%
8. Thriftway/Shop 'n Bag - 2.62%
9. Redner's Markets - 2.57%
10. Bottom Dollar Food (Food Lion) - 2.08%

It's interesting to note that Wegmans earned it's 4.72% share with only 8 stores, and Whole Foods earned its 3.23% share with 10 stores. In comparison, ShopRite/PriceRite has 69 stores in the market, Giant has 62, Acme has 91 and A&P has 48.

The Philadelphia market share leaders* are as follows (the market consists of Bucks, Montgomery, Chester, Delaware and Philadelphia Counties in PA, and Burlington, Camden and Gloucester Counties in NJ):

1. Giant/Carlisle - 27.88% market share
2. ShopRite/PriceRite - 23.52%
3. Acme Markets - 18.25%
4. A&P (Pathmark, Super Fresh, Food Basics) - 9.31%
5. Wegmans - 5.31%
6. Whole Foods - 3.65%
7. Save-A-Lot - 3.45%
8. Redner's Markets - 3.29%
9. Thriftway/Shop 'n Bag - 2.41%
10. Bottom Dollar Food - 2.27%

As for the retailers that have struggled over the past several years, the authors said "there was no relief in sight as the economy continued to be listless, competition remained fierce, shopper loyalty diminished and consumers in all economic strata maintained the mindset of thrift and caution."

* The lists above do not include supercenters (Walmart, Target), club stores (Costco, BJ's), drug stores, dollar stores or convenience stores. When including all retailers that sell groceries, Wawa's market share is higher than everyone else's except ShopRite and Giant in both the Delaware Valley and Philadelphia markets. Walmart, CVS and Rite Aid also fare well (top 10), and BJ's is the dominant club store in both markets.

For more detailed information, including sales numbers, lists by county and more, visit best-met.com.

ShopRite, with $1.7 billion in sales, leads Philly market in 2011

Last Friday the Philadelphia Business Journal published the list of top companies in Philadelphia's eight-county area selling groceries, health- and beauty-care products, general merchandise and tobacco products, as compiled by the Food Trade News. Here's the list:

1. ShopRite - 43 stores with sales of $1.7 billion
2. Acme - 69; $1.57 billion
3. Giant - 47; $1.53 billion
4. Wawa - 280; $1.44 billion
5. Rite Aid - 252; $884.1 million
6. A&P (Super Fresh, Pathmark) - 40; $850.8 million
7. Wal-Mart - 37; $831.1
8. CVS - 187; $817 million
9. Genuardi's - 28; $733.7 million
10. Target - 29; $534.3 million
11. Walgreens - 90; $480.9 million
12. BJ's Wholesale Club - 12; $413.9 million
13. Wegmans - 6; $371 million
14. Save-A-Lot - 34; $258 million
15. Sam's Club - 7; $238.2 million
16. Thriftway / Shop n Bag - 21; $230.5 million
17. Redner's Warehouse Markets - 10; $222.7 million
18. KMart - 29; $210.9 million
19. 7-Eleven - 179; $201.3 million
20. Whole Foods - 8; $191.6 million

It's interesting to note that the three major drug stores had 529 stores in 2011. The 10 supermarkets totaled 276 stores (from Wegmans with 6 to Acme with 69).

Here's a link to the original compiler: Food Trade News

Number of dollar stores surpasses number of drugstores in the U.S.

A new report from Colliers International says the U.S. now has more dollar stores than drugstores. The four big national dollar store chains - Dollar General, Dollar Tree, Family Dollar and 99 Cents Only - have approximately 21,500 locations. The three big drugstore chains - Walgreens, CVS and Rite Aid - have approximately 19,700 locations.

According to the report, the recession led consumers to dollar stores instead of drugstores and supermarkets. In addition, dollar stores are often willing to go in small markets, where a big supermarket or drug store (which often has "onerous real estate requirements") may not be willing to go.

The Colliers report says all four dollar store chains are expected to continue adding stores throughout 2012.