Grocery store openings increased 30 percent in 2018

New grocery store openings were up 30% in 2018 as compared to the prior year, according to a report by JLL. More than one-quarter of the new stores were in Florida, California and Texas as a result of expansion by Publix, Sprouts Farmers Market, Aldi, Kroger and H-E-B.

"Grocery is one of the strongest retail sectors, with nearly twice as many new stores opening than closing last year," according to JLL Director of Research James Cook.

Cook also pointed out that shopper habits have shifted to more frequent, shorter trips, and as a result, food retailers are focusing on developing smaller format stores.

"In 2019 we expect to see even more grocery stores rolling out their smaller-format stores as they battle razor-thin margins in prime locations, while still serving evolving consumer needs," said Cook.

Aldi, which accounted for 16% of total new stores by square footage, continues to expand at a rapid pace. And new formats, like Giant's 9,500 square foot Heirloom Market in Philadelphia, were recently introduced.

Wegmans named easiest company for customers to work with, Wawa also top performer

Last week the Temkin Group published the 2018 Temkin Effort Ratings, which the company calls the industry's most comprehensive benchmark of customer effort. This measurement shows the degree to which customers view companies as either easy or hard to work with.

The winner? Wegmans Food Markets.

Temlin has proclaimed Wegmans as the "easiest company for customers to work with," with an overall score of 90 percent. Other top performers noted in the study were Subway, Citizens Bank, Ace Hardware, and Wawa Food Markets, all with 89 percent scores. USAA and Publix were close behind at 88 percent.

The worst ratings belong to Spirit Airlines, Medicaid and CarMax.

According to the Temkin Group, supermarkets, fast food chains and retailers earned "excellent" ratings (above 80 percent), while health plans and TV/Internet service providers earned "poor" scores (below 60 percent).

Instacart raises money to fuel expansion, add employees

Instacart announced last month that it received $350 million in financing from Coatue Management, a technology-focused hedge fund, and noted that it has raised more than $1 billion since 2012, with most of it still in the bank.

According to the company, the additional funding will be used to double its employee count, fuel expansion, and invest in new products and services.

Instacart is now used by North America's eight largest grocery retailers - Kroger, Albertsons, Publix, Costco, Ahold Delhaize, H-E-B, Loblaw and Sam's Clubs, not to mention regional grocers like Wegmans.

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%).

Investments in grocery-anchored centers grew in 2017

Investments in grocery-anchored shopping centers grew by 5.3% last year compared to 2016, according to a report issued by Chicago-based Jones Lang Lasalle (JLL). The increase makes the grocery-anchored segment one of the few retail sectors to see real growth.

The report also stated that grocery store openings declined by 29% in 2017, with several retailers cutting back on expansion plans and others shutting stores as they attempted to avoid bankruptcy.

"Grocery is considered to have a moat around it to defend against e-commerce, and because of that, these assets are seen by retail property investors as a safe investment," according to JLL.

A Supermarket News article points out investing in supermarket-anchored centers is not 100% safe, as Amazon and other e-commerce firms make inroads into the market. As a result, many shopping centers run the risk of dying, like their regional mall counterparts anchored by weak department stores.

Tops Friendly Markets (upstate New York) filed for bankruptcy last month, and Southeastern Grocers (Bi-Lo, Winn-Dixie, Harveys) may file this month. A&P, once a major player in the grocery industry, filed for bankruptcy and liquidated in 2015.

Not surprisingly, shopping centers anchored by strong operators like Whole Foods, Sprouts, Trader Joe's, Kroger, ShopRite, Wegmans and Publix are among those that have the greatest investment potential.

Target ramping up CapEx, small-format stores, e-commerce efforts

Target announced earlier this week that it plans to spend about $3.5 billion on capital expenditures in 2018 (compared to $2.5 billion last year) as it accelerates investments in store remodels, small-store formats and other initiatives.

The company also reported that the investments will likely have an adverse affect on profit margins. Target execs said that they expect to generate a lower operating margin in the near term as they continue to increase wages and upgrade its stores and supply chain to better accommodate its growing e-commerce business.

Regarding Target's e-commerce efforts, the company unveiled free two-day shipping on hundreds of thousands of items and plans to offer same-day delivery through Shipt, which it acquired last year, in most major markets by the end of this year.

Shipt is currently available to deliver from 455 Target stores. Target said Shipt also plans to continue to expand its partnerships with other retailers, including Costco, Publix and others.

Following up on the "nearly 30" small-format stores opened in 2017, Target said it plans to open about 30 more in 2018 and another 30 in 2019.

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

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.

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.

Walmart, Kroger and Costco top list of 75 food sellers in US and Canada

Supermarket News released its annual list of the Top 75 Retailers and Wholesalers. The list ranks the largest sellers of food (by revenue) to be consumed at home in the United States and Canada.

Here are some bulleted highlights that I have copied word-for-word from Supermarket News. I would suggest visiting their website for the complete study.

• Natural and organic foods are still growing, but the retail beneficiaries aren't necessarily who they used to be;
• Formats serving low-income shoppers - while still some of the industry's fastest growers due to unit growth - have seen their sales in disarray as their shoppers deal with reductions to federal food benefit programs and rising costs for housing and health care, while a slowly improving economy may be lifting some of their shoppers out of the channel; and
• While Internet retailing remained a relatively small share of the pie, it became the subject of outsized ambitions by some of the industry's leading players, and a serious threat from digital natives like Amazon, which at year-end announced plans for a leap into the physical food retailing world. Initiatives to add click-and-collect shopping capabilities speak to a trend among food retailers to improve the convenience of their offerings to shoppers, and drive more sales from existing units, sources said.
• All this occurred while a nearly unprecedented stretch of deflating prices triggered chaos throughout the supply chain - an event analysts say could dampen sales at least through the first half of 2017.

Here are the top 10 retailers and wholesalers, plus other notable companies on the list.

1.  Walmart

2.  Kroger

3.  Costco

4.  Albertsons

5.  Ahold Delhaize

6.  Loblaw Cos.

7.  Publix

8.  Target

9.  C&S Wholesale Grocers

10. Walgreens

Also:

12. CVS

15. Dollar General

16. Supervalu

16. Wakefern

19. 7-Eleven

20. Trader Joe's

21. Aldi

22. Dollar Tree

26. BJ's Wholesale Club

30. Rite Aid

30. Wegmans

44. Weis Markets

54. Grocery Outlet

56. The Fresh Market

61. Amazon

Three Wakefern members were listed as separate entities on the list, including Saker ShopRite (56), Village Super Market (61), and Inserra Supermarkets (69).

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.

Wegmans beats out Trader Joe's as nation's best grocer

For the first time in four years, Trader Joe's wasn't ranked as the nation's best grocery chain. That honor recently went to Wegmans, which ranked ahead of Trader Joe's and Publix in a survey of more than 10,000 consumers conducted by Market Force Information.

Hy-Vee Food Stores ranked fourth, and Aldi was fifth. The top five chains are all privately held.

Costco ranked sixth, while Walmart ranked 15th, last on the list.

Although online ordering seems to be a hot topic and a fast growing trend, the survey found that only 5% of the people surveyed ordered online for home delivery in the past 90 days, while only 2% placed an order online to pick up their groceries in the store.

Wegmans again named top supermarket in U.S.

Wegmans was recently named the top supermarket in the U.S. by the American Customer Satisfaction Index for the second consecutive year. Here is the list along with the scores.

Wegmans - (86)
Trader Joe's - (83)
H-E-B - (82)
Publix - (82)
Aldi - (81)
Hy-Vee - (78)
Kroger - (76)
Delhaize (Food Lion / Hannaford) - (76)
ShopRite - (75)
Meijer - (74)
Bi-Lo - (74)
Whole Foods - (73)
Supervalu - (71)
Target - (71)
A&P - (70)
Ahold (Giant) - (70)
Albertsons (Acme) - (68)
Giant Eagle - (67)
Walmart - (67)

It's interesting to note that the controversial year for Whole Foods cost them dearly in this report, as their score dropped 10 points from the previous year. Target's score dropped 12 points.

Wegmans, which was also named America's best supermarket by Consumer Reports, had the only year over year gain.

Wegmans rated best supermarket by Consumer Reports

In Consumer Reports' annual ranking of supermarket brands, Wegmans once again came out on top. In all, 68 supermarket brands were ranked based on responses from more than 62,000 Consumer Reports subscribers. Traditional supermarkets, warehouse clubs, supercenters and limited assortment stores were included in the study.

The top rated supermarkets, which also included Publix and Trader Joe's, received high scores for overall freshness, staff courtesy and a clean shopping environment.

Walmart Supercenters, which tied for last with A&P and Waldbaum's, earned low marks in every category other than price.

The results:

1) Wegmans
2) Publix
3) Trader Joe's
4) Fareway Stores
5) Market Basket
6) Costco
7) Raley's
8) Sprouts Farmers Market
9) Fresh Market
10) Stater Brothers

Also:
14) Aldi
15) Whole Foods
26) ShopRite
39) Giant
42) BJ's Wholesale Club
45) Target / Super Target
47) Sam's Club
53) Weis
61) Acme
65) Pathmark
66) A&P
66) Walmart

Wegmans tops annual "reputation" survey

Wegmans came out on top in the 16th annual Harris Poll Reputation Quotient study, which ranks companies' perceived reputations. Wegmans was the only company to rank among the top five in each category - social responsibility, emotional appeal, products and services, vision and leadership, financial performance, and workplace environment.

Also on the list:

2. Amazon.com

4. Costco

8. Publix Supermarkets

14. CVS

21. Whole Foods Market

32. Kroger

44. Aldi

54. Walgreens

63. Target

67. Safeway

84. Walmart

Trader Joe's beating up Whole Foods in sales per square foot

Business Insider published an article earlier this week explaining why Trader Joe's sells nearly twice as much per square foot than Whole Foods ($1,734 PSF compared to $930 PSF).

According to the story, "Trader Joe's is cheap." For instance, Trader Joe's sells a bag of quinoa for $4.99, while Whole Foods sells it for $9.99. The story doesn't specify whether or not the bags are the same size, but I think we're supposed to assume they are. The story also doesn't specify what quinoa is. Blogger.com's spell check and I are unsure.

Anyway, the point is that consumers view Trader Joe's as high-quality but inexpensive, and despite Whole Foods' recent and ongoing efforts to lower some prices, analysts say they are not doing enough to market their bargains, so customers don't realize Whole Foods is getting cheaper.

Regarding the sales per square foot numbers, here are some stats from the story:

Trader Joe's - $1,723 PSF
Whole Foods - $937
Publix - $552
Kroger - $496
The Fresh Market - $490
Weis Markets - $335

It should be noted that Whole Foods announced in February that its stores generated an average of $983 in sales per square foot in 2013. And according to stats published by the Food Marketing Institute, the average sales PSF for supermarkets in the U.S. is $360 (based on a median total store size of 46,000 SF and median weekly sales per supermarket of $318,170).

Another reason for Trader Joe's success, according to the article, is that 80% of Trader Joe's products are in-house brands, so customers can't buy them anywhere else. In addition, the product mix is pretty creative (Chili-Lime Chicken Burgers, Cookie Butter), while the mix at Whole Foods is basic in comparison.

Whole Foods has been considered the go-to place for organic and healthy foods in recent years, but lately the competition is catching up, including Walmart.

Lastly, the story included an interesting chart illustrating the projected growth in sales for various grocery formats. Fresh, limited assortment and dollar store formats are leading the way.

Fresh format - 92.2% growth in sales through 2018
Limited assortment - 38.4%
Dollar store - 31.2%
Supercenter - 22.9%
Wholesale - 19.0%
Convenience store - 12.7%
Drug store - 10.6%
Traditional supermarket - 3.6%  

Supermarkets among top retail chains in the world

A report published by Deloitte Touche Tohmatsu and Stores Magazine last month claims that 32 of the 100 largest retail chains in the world are supermarket chains. And in the U.S., 20% of the retail chains on the top 100 list are supermarkets. The list includes the following grocery chains:

Kroger - #5
Safeway - #24 (prior to the sale of the company's Canadian unit and closing of the Dominick's chain)
Delhaize - #33
Supervalu - #35
Publix - #36
H-E-B - #51
Whole Foods - #91

Also of note:
Walmart - #1
Tesco - #2
Costco - #3
Target - #10
Dollar General - #56
BJ's Wholesale Clubs - #88

Study reveals Trader Joe's as consumer's favorite grocery chain

As the result of a study of 6,600 consumers released last week by Market Force Information, Trader Joe's was named North America's favorite grocery store based on customer satisfaction. Publix and Whole Foods were second and third, respectively. All three chains received high marks for courteous staff, inviting atmosphere and high-quality produce.

As far as factors that consumers said they liked the most about their preferred store, convenience was at the top of the list, followed by low prices and good sales and promotions. However, the study concluded that these characteristics are not necessarily helping the chains gain more business; rather, consumers have come to expect these attributes from their grocery stores. Operations-focused attributes seemed to make a bigger difference.

Here are the top ranked grocers in several key categories:

Convenient Location - Ralph's, Food Lion, King Shoppers
Low Prices - Aldi, WinCo Foods, Walmart
Good Sales & Promotions - Winn-Dixie, Hy-Vee, Publix
Merchandise Selection - Meijer, Trader Joe's, WinCo Foods
One-Stop Shopping - Walmart, Target, Meijer
Cleanliness - Publix, Trader Joe's, Hy-Vee
Accurate Pricing - Aldi, Trader Joe's, H-E-B
Courteous Staff - Publix, Trader Joe's, Hy-Vee
Atmosphere - Trader Joe's, Publix, Hy-Vee
Fast Check-out - Trader Joe's, Ralph's, Publix
High Quality Meat - Whole Foods, Costco, Publix
High Quality Produce - Whole Foods, Publix, Trader Joe's
Natural & Organic Options - Whole Foods, Trader Joe's, Publix
Nutritional Information - Whole Foods, Trader Joe's, Hy-Vee
Sustainable/Green Practices - Whole Foods, Trader Joe's, Aldi

Report says supermarkets gained share on warehouse clubs last year

A study released last week by DSR Marketing System claimed that U.S. supermarkets gained market share against warehouse clubs (i.e. Costco, BJ's) and superstores (i.e. Walmart, Target) in 2012.

The study showed that supermarkets owned a 59.3% share of grocery sales, up 0.4% from 2011. At the same time, the share of grocery sales for warehouse clubs and supercenters decreased 0.4% to 22.6%.

According to DSR, the share increase for supermarkets reflects the impact of fast-growing food retail concepts like Aldi, Kroger, Publix, Wegmans and Whole Foods, as well as closures at Kmart and slower relative growth of warehouse clubs. The company also noted that the aging population helps smaller format stores like supermarkets, since older shoppers generally dislike larger stores. (And older shoppers don't need a three-year supply of ketchup and Cheese-Its, like my family apparently does.)

Grocers take top 3 spots in "experience" ratings

The third annual Temkin Experience Ratings, which evaluate a company's overall customer experience, came out last week, and grocery chains fared well. Based on a study of 10,000 consumers, Publix, Trader Joe's and Aldi earned the highest scores. Here are the top 12 performers:

1 - Publix
2 - Trader Joe's
3 - Aldi
4 - Chick-fil-A
5 - Amazon.com
6 - Sam's Club
7 - H.E.B.
8 - Dunkin Donuts
9 - Save-A-Lot
10 - Sonic Drive-in
11 - Little Caesar's
12 - Ace Hardware

The five lowest scores went to US Airways, Time Warner Cable, Days Inn, Empire BCBS and 21st Century.