Pathmark supermarket to open in Brooklyn... really

Grocery retail cooperative Allegiance Retail Services announced that it plans to open a 49,000 square foot Pathmark supermarket - at the site of a former Pathmark store in Brooklyn, NY - later this month or next. The New Jersey-based cooperative purchased the intellectual property of the Pathmark name and associated marks last year.

Pathmark was a mainstay in the metro New York market for decades until parent company A&P filed for bankruptcy in 2015.

The new store's owner is PSK Supermarkets, which operates about a dozen stores in the New York market, mostly under the Foodtown banner.

Study reveals that Whole Foods' prices have not improved under Amazon

A study conducted by Senior Analyst Chuck Grom from Gordon Haskett in New York found that prices at Whole Foods haven't changed much in the year since it was purchased, despite Amazon's promise of lower prices.

As published in a September story by Forbes.com, in seven pricing studies of a basket of 108 items over the course of a year following the acquisition, Grom found that the basket's aggregate price was just 0.8% below the price before the acquisition was completed. In addition, compared with Whole Foods' first round of price cuts in the Fall of 2017, the basket price actually inched up 1.3%.

Lidl to acquire 27 Best Market stores in New York and New Jersey

Lidl announced today that it plans to purchase 27 Best Market supermarkets in New York and New Jersey for an undisclosed amount. Twenty four of the Best Market stores are located in Long Island. The deal is expected to close early next year, and all of the acquired stores will be converted to the Lidl banner.

Lidl currently operates 59 stores in Virginia, North Carolina, South Carolina, Georgia, Maryland, Delaware and New Jersey. In addition, stores are under construction in Pennsylvania and are expected to open in 2019.

Both companies said that all Best Market employees in New Jersey and New York will have guaranteed employment opportunities with Lidl, and will be offered positions with wages and benefits equal or better than what they currently have.

Best Market opened its first store in 1994 and has grown relatively quickly. The company has opened or acquired 11 stores since 2015.

Kosher supermarket opens in Northeast Philly

The first all kosher supermarket in the Philadelphia region opened last spring on Bustleton Avenue in Northeast Philadelphia. The 13,000 square foot store offers foods like meats, pizza, sushi, breads, candy and kugel, as well as household staples like laundry detergent and paper towels.

According to Lubicom Marketing Consulting, a New York firm that co-hosts a trade show called KosherFest, the kosher food industry in the U.S. increased by about 12 percent between 2014 and 2016.

In the last decade, about 65 independent kosher supermarkets have opened across the country.

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.

Amazon may be planning to open 2,000 grocery stores

A Business Insider report earlier this week suggested that Amazon envisions having 20 bricks-and-mortar grocery stores open by the end of 2018, and as many as 2,000 in another 10 years. The report said the information was gathered from internal memos sent between 2014 and 2016. Amazon has not commented publicly.

According to Business Insider, locations for the 20 stores would include New York, Miami and Las Vegas, and would serve as tests. A rollout of as many as 200 stores per year could follow, pending the test results.

Supermarket News pointed out yesterday that Amazon's entry into bricks-and-mortar food retail would suggest that the future of grocery shopping includes a combination of virtual and physical options.

Amazon Fresh, the company's virtual shopping option, expanded this week in the Dallas and Chicago markets.

Trader Joe's price investments widening the gap with Whole Foods

According to an analyst, Trader Joe's may be widening its price advantage with Whole Foods. Karen Short of Deutsche Bank Securities said in a report recently that a Trader Joe's in the New York market had a total price advantage of 26% over a neighboring Whole Foods Market across a basket of 77 like items. In fact, Trader Joe's prices were cheaper on 60 of the 77 items checked.

Overall, Trader Joe's prices were 30% cheaper on perishables and 24% cheaper on non-perishables. In addition, Trader Joe's had a 15% advantage in overall prices versus Whole Foods' private label items.

Short said the widening price gap may be the result of a round of price investments by Trader Joe's, which recently reached the 500 store mark. The company made a similar round of price investments in 2013, when they reached the 300 store mark. That event in 2013 garnered a response by Whole Foods, which lowered prices to remain competitive with its rival.

Ahold investing in freshness, training and price reductions

Ahold announced last week that its U.S. pilot program that invests more heavily in the quality and merchandising of its fresh assortment, in employee training and in targeted price reductions, resulted in "encouraging volume uplifts" and will be rolled out more extensively, especially in New England. The announcement came as Ahold's first quarter results revealed eroding margins amid competitive and inflationary pressures.

Ahold, based in the Netherlands, operates the Stop & Shop banner in New England and New York markets, as well as the Giant banner in Pennsylvania and Maryland.

In its earnings call, the company said it expects the program to be implemented in more than half of its stores by the end of the year, and that it will be funded mostly by the expected $250 million "simplicity" program of cost savings in the U.S.

Ahold also owns and operates Peapod, the online grocery ordering and delivery service. Peapod experienced double-digit sales growth in the first quarter.

Weis Markets 3Q results include higher earnings, lower sales

Weis Markets announced its third quarter earnings recently, which were highlighted by a 1.2% increase in net income to $17.2 million.

In addition:

• Earnings per share increased 1.6% to $0.64 per share as compared to the same period one year ago.
• Operating income increased 1.3% to $26.5 million.
• Sales decreased 1.5% to $668.4 million.
• Comparable store sales decreased 1.7%.

According to the company, net income and operating income increases were due to its continuing focus on disciplined promotions and marketing, increased store-level productivity, improved operational and supply chain efficiencies, and a decrease in depreciation expenses.

The decrease in sales was attributed to spikes in sales in the third quarter of 2011 as a result of Hurricane Irene and Lee. Weis also pointed to higher gas prices as well as cautious consumer spending due to high unemployment in Northeastern Pennsylvania, New York's Southern Tier, and parts of Central Pennsylvania.

For the year-to-date, the company's sales were down 0.4% and comparable store sales were down 0.2% as compared to the same period one year ago. Net income rose 7.3% and operating income rose 7.1%.

Online grocer FreshDirect coming to the Philly market

Exactly one year ago today I blogged about Peapod by Giant's entry into the Greater Philadelphia market (Peapod by Giant online grocery shopping to serve Greater Philly).  Today I'm writing about FreshDirect.com, although I just gave the lead sentence to its biggest competitor!

FreshDirect, which has served the New York metro area for the last decade, will officially launch in Philadelphia on Monday, October 1. The online service provides produce, meat, seafood and deli items, pastries and breads, organic foods, coffee and pre-made meals. The company's online store front opened earlier this week and began accepting orders for delivery starting on October 1.

The launch only includes eight center city zip codes but the company says it plans to expand throughout the region in 2013.

FreshDirect requires a $30 minimum order and a delivery fee in the $6.99 - $8.99 range, although new customers can lock in unlimited free deliveries for 60 days when signing up for the service.