Supermarkets lead customer experience survey; Wegmans tops all companies

The Temkin Group, a research and consulting firm, said earlier this month that its 2018 Temkin Experience Ratings survey of 10,000 U.S. shoppers revealed that supermarkets were tops in customer experience ratings among 20 industries evaluated.

Supermarkets posted a rating of 78.5%, up from 78.1% in 2017. The industries near the top of the list include retail (74.4%), banks (73.1%), and parcel delivery (71.9%). A score of 80% or above is considered "excellent," 70% or higher is "good," and below 60% is deemed "poor."

Ratings are determined by customer responses in three main categories - success (can you do what you want to do?), effort (how easy is it to work with the company?), and emotion (how do you feel about the interactions?).

Overall, Wegmans turned in the top rating of all 318 companies included in the survey. The Rochester, NY-based food retailer had an overall customer experience rating of 86%. Among supermarkets, H-E-B, the top company in 2017, and Publix tied for second with a score of 83%.

Rounding out the top 10 scores among supermarkets for overall customer experience were Aldi and Wawa (82%), Trader Joe's and ShopRite (81%), Save-A-Lot and Food Lion (80%), Meijer, Kroger, Hy-Vee and Winn-Dixie (79%), Albertsons (78%), Safeway and Piggly Wiggly (77%), Stop and Shop (76%) and Vons (75%).

Ahold suspends Bfresh small format concept

Published reports last month stated that Ahold Delhaize, the parent company for Giant, Food Lion and Stop & Shop, is suspending its small-format Bfresh brand and will not open Bfresh stores in Philadelphia, as previously announced. The company still plans to make use of the spaces it has leased, though.

In addition, Ahold's 3,700 SF Everything Fresh grocery store on Walnut Street in Center City has closed.

Last year the company announced that it would open Bfresh stores at Second and South Streets, Bainbridge Street and University City.

Kroger - Ahold merger rumors have started

Last week the Cincinnati Business Courier reported that an analyst report out of Europe speculated that Kroger was pursuing a merger with Ahold Delhaize (Giant, Food Lion, Stop & Shop, Peapod, among others). On Wednesday of last week, Supermarket News reported that it was not able to verify the substance of the claim.

Analysts have talked about such a merger before, suggesting that the two powerful food retailers could gain additional scale and more effectively fight competitors like Walmart, Aldi and Amazon-Whole Foods. A merger would also provide Kroger with access to Peapod and its e-commerce platform.

As reported in Supermarket News, Ahold and Kroger have similar operating strategies in the U.S., both have invested in lower prices and have developed distinct private brands. Although the two companies compete in the Southeast, Ahold's Northeast store base would compliment Kroger's existing footprint.

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.

Lidl stores open in three states

The first Lidl stores in the U.S. opened earlier this month in North Carolina, South Carolina and Virginia. At 36,000 square feet, reports say the stores look more like car dealerships than grocery stores, with floor-to-ceiling glass covering much of the exterior.

The selections are nearly all private brands, with the packages made specifically for the U.S. market and closely resembling the national brands they are designed to replace.

According to an analysis conducted by RBC of Lidl's sales flier versus fliers of competitors, Lidl's promotional prices were 12% to 30% lower than all others - including Kroger, Sprouts Farmers Market, Publix, Food Lion and Save-A-Lot - with one exception. Lidl's and Aldi's prices were about the same.

A supplier representative told Supermarket News that Lidl appeared more concerned with quality compared to some competitors, and that the pricing was supported by a more efficient process than other buyers.

More to come as Lidl stores continue to open.

Weis adding stores, to spend $90M on CapEx

Weis Markets announced at their annual meeting last month that they are planning on one new store for 2017 and seven new stores for 2018, as well as several remodels and two new fuel centers. The company has planned for about $90 million in capital expenditures this year.

In 2016, Weis purchased five Mars Super Market stores and 38 Food Lion locations.  They now operate 204 stores with total annual sales of approximately $3.1 billion.

Real estate experts question Lidl's planned store locations

Real estate experts that spoke with Supermarket News last month expressed skepticism over Lidl's real estate choices. Douglas Munson and John Tippetts, former Kroger real estate staffers and co-founders of MTN Retail Advisors, said that about 70% of what they identified as the first 75 stores that Lidl intends to open lack the ingress and egress of a typical "Class A" supermarket location.

In addition, Munson and Tippetts believe that the sites appear to have been selected with a lack of insight into the volume of the competitors in the immediate trade areas.

Site Specialist Matthew P. Casey expressed similar concerns.

"I don't think they evaluated competition beyond doing things like looking at the number of cars in the parking lot," Casey said.

Lidl says that it plans to address quality and price in a manner that existing U.S. markets are not.

Munson predicted that Lidl will attract "the wrong people" and end up being more like a Weis Market or Food Lion rather than a Harris Teeter.

"You have to realize that the average Food Lion is doing $175,000 a week and the average Harris Teeter is doing $450,000. If you assume you're hitting Harris Teeter and you wind up hitting Food Lion, you're taking a much, much smaller piece of the pie."

On the other hand, Mark Thompson, managing director at Crossman & Co., said Lidl's site choices don't surprise him.

"Look what Wawa did in Florida," he said. "They went off hard corners to midblock and where they are at a hard corner it's a 'B' corner, yet all the pumps are full. Their model blew the market away. If Lidl's model blows the market away then people will shop."

bfresh stores to add grocery items and prepared foods

bfresh, the urban fresh concept that debuted nearly a year ago, is making substantial changes. According to parent company Ahold-Delhaize (Giant, Food Lion, Hanaford, Stop & Shop, Peapod), the store plans to add hundreds of branded packaged goods - from paper towels to peanut butter - to an assortment previously dominated by fresh, natural and organic brands. Stores will also include more grab-and-go and heat-and-eat food options.

These changes are being made as Ahold continues to learn how best to meet the needs of young urban shoppers.

"Shoppers want to keep things simple," said bfresh Team Coach Patrick Blye in a recent news release. "No matter how you want to shop - like stocking up for the week, buying fresh meals every day, or stopping in for the freshest quick bite in town - bfresh has got you covered."

According to a story in Supermarket News, Philadelphia is a target for bfresh expansion.

Ahold-Delhaize trading as one entity, selling off stores to avoid antitrust concerns

Ahold-Delhaize began trading as a combined entity on Monday, July 25, a few days after the Federal Trade Commission issued a consent order allowing for the completion of the merger, subject to the sale of 81 stores due to antitrust concerns.

According to the company, agreements have been made to sell all 81 stores, plus an additional five stores that were included as part of negotiations with buyers in order to reach a package deal. Buyers include Weis Markets (38 Food Lion stores in Delaware, Maryland and Virginia), Supervalu (22 Food Lion stores in Maryland, Pennsylvania, Virginia and West Virginia), and Publix (10 Martin's stores in Richmond, Virginia), among others.

The FTC said the agreement is subject to public comment until August 22, after which the commission will decide whether to make the proposed consent order final.

Ahold and Delhaize approve company merger

Ahold and Delhaize shareholders approved the merger of the two companies last month, leaving approval from competition authorities in the United States and Europe as the final hurdle. Pending the necessary approvals, the deal is expected to close this summer.

In order to help facilitate the approvals, both chains are offering a combined 83 stores for sale, according to Food Trade News. The stores for sale are assumed to represent an overlap in markets where both stores exist.

According to published lists, there are four stores for sale in Pennsylvania (York, Waynesboro, and two in Chambersburg), all of which carry the Food Lion banner.

Ahold USA, headquartered in Carlisle, PA and Quincy, MA, includes Giant Food, Stop & Shop and Peapod, among others. According to the company's website, Ahold USA operates 770 supermarkets and 210 "pick-up points" in 14 states and the District of Columbia.

Delhaize America includes Food Lion and Hannaford, and operates 1,288 supermarkets in 15 states. The company's website reports that Delhaize America accounts for 66% of the overall company revenue.

Ahold and Delhaize to merge, form one of largest supermarket chains in U.S.

Ahold (Giant, Stop & Shop) and Delhaize (Food Lion, Hannaford) announced this morning that the two companies plan to merge and become Ahold Delhaize, creating one of the largest supermarket chains in the U.S. The merger would create a company with 2,000 U.S. stores (6,500 stores worldwide), $44 billion in sales and 375,000 employees.

By comparison, Kroger, the largest full-service grocery retailer in the U.S., has about 2,650 supermarkets.

The deal, which is expected to close next summer, needs to clear regulatory clearances and obtain shareholder approval.

Giant and Food Lion parent companies in merger talks

Ahold and Delhaize confirmed last month that they are in the early stages of merger talks, and analysts believe a deal could be struck this year. Ahold is the parent company for Ahold USA, which includes Giant Food, Martin's, Stop & Shop, and Peapod. The Delhaize Group includes Delhaize America, which consists of Food Lion and Hannaford. Both companies are based in Europe.

Analysts said that both companies combined produced sales of $60.5 billion last year, of which about 61% came from the U.S.

The companies discussed a merger in 2006, but an agreement was not reached.

Giant Eagle to close Good Cents stores in PA, OH

Giant Eagle said last week that it plans to close all eight of its Good Cents discount grocery stores. The decision follows Food Lion's closure of all Bottom Dollar stores last year, which leaves Aldi and Save-A-Lot as the lone discount supermarket chains in the Western PA and Northeastern OH markets.

The company cited "numerous business and economic factors that made it difficult to continue to successfully deliver the shopping experience that customers have come to expect."

Bottom Dollar has lowest prices in Philly region, according to study

According to a story on CBS Philly, researchers from the Delaware Valley Consumers' Checkbook visited supermarkets across the Philadelphia region to see which retailer had the lowest prices. The shoppers compared prices on 151 items, including fresh produce, fresh meat, national brand prepared foods and dairy products.

And the winner is... Bottom Dollar. The discount grocer's basket sold for $78, compared to the same basket at Whole Foods, which cost $134.

Walmart and Wegmans (yes, Wegmans) came in second and third place, respectively. According to Checkbook Executive Director Kevin Brasler, Bottom Dollar, Walmart and Wegmans offered significant grocery savings on a daily basis, as compared to other supermarkets that attract customers with sales.

"Big chains like Acme, Pathmark, Giant and ShopRite really pull customers in with sale prices," said Brasler, who also pointed out that prices on other items can be high and even vary from store to store.

The researchers determined that Giant, Food Lion, ShopRite, Redner's, Target and Weis all have prices that are lower than average. Pathmark and Super Fresh, both owned by A&P, had prices that were higher than average, and Whole Foods and Acme had the highest prices.

Aldi was mentioned as having "steep savings" but a limited selection.

Bottom Dollar opens 40th store in Philly market

Bottom Dollar's new store in Levittown, PA, which opened last week, is the discount grocer's 40th store in the Philadelphia market. Overall, the company operates 59 stores in New Jersey, Pennsylvania and Ohio. Bottom Dollar is a division of Food Lion, which is owned by Delhaize.

Sales increase at Food Lion, Bottom Dollar still not profitable

Delhaize Group sales and earnings increased in the company's second quarter due in part to sales increases at Food Lion, according to a company statement issued last month. U.S. sales for Delhaize, which includes Food Lion, Hannaford and Bottom Dollar, improved 0.4% to $4.25 billion, as compared to the same period one year ago.

Margins improved from 3.7% to 3.8%, and profits in the U.S. were up by 4.9% to $162 million.

Although Bottom Dollar is still not profitable, Delhaize says the chain is making significant progress on cost and productivity initiatives and is continuing to gain new shoppers.

Walmart Neighborhood Market fastest growing U.S. supermarket

A report from Chainlinks Retail Advisors recently listed what they believe to be the 10 fastest growing supermarkets (excluding warehouse clubs) in the U.S. They are listed here along with the number of new stores planned for the next year:

1. Walmart Neighborhood Market: 95 - 115
2. Aldi: 80 - 100
3. Save-A-Lot: 60
4. Whole Foods: 50
5. Trader Joe's: 30
6. Food Lion: 22
7. Fresh Market: 20
8. Sunflower Farmers Market: 20
9. Grocery Outlet / Amelia's: 20
10. Food 4 Less: 16

Bi-Lo to buy three banners from Delhaize

Bi-Lo Holding, which operates Bi-Lo and Winn-Dixie supermarket chains in eight southern states, announced yesterday that it has agreed to acquire Sweetbay, Harveys and Reid's stores from Delhaize for $265 million. Delhaize owns Food Lion and Bottom Dollar Food, among others.

According to a Supermarket News report, there are 165 stores included in the transaction that generated revenues of about $1.8 billion last year. The same report claims that Sweetbay currently has 72 stores in Florida, Harveys has 72 stores in Georgia and Florida, and Reid's has 11 stores in California. (72+72+11=155.)

The sale is expected to close later this year, pending regulatory approval.

Delhaize considering sale of Sweetbay and Harveys

According to multiple reports today, Delhaize Group, which owns Food Lion and Bottom Dollar Food, has hired an investment bank to assist in the possible sale of its Sweetbay and Harveys brands in the U.S. Sweetbay, which is in Delhaize's Hannaford division, operates 72 stores in Florida. Harveys is in the Food Lion division and operates 73 stores, mostly in Georgia.

Delhaize reports lower losses at Bottom Dollar

Delhaize Group announced first quarter earnings earlier this week and said the company's performance in the U.S. was boosted in part by "lower losses at Bottom Dollar Food." U.S. operating profit for Delhaize increased to $197 million for the quarter, a 14.1% increase compared to the same time period a year ago. Operating margins improved to 4.2% of sales as compared to 3.7% in the first quarter of last year.

The company is in "phase four" of its repositioning effort for Food Lion, and has begun a "fresh round of price investments" at Hannaford Bros.

As for Bottom Dollar, Delhaize has not opened a new store in the past nine months, but future openings are planned for the Philadelphia and Pittsburgh markets.