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%).

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.

Ahold to grow online sales by 80% in three years

Ahold (Giant, Stop & Shop, Peapod) CEO Dick Boer recently said he would like the company to grow online sales by nearly 80% over the next three years, from approximately $1.7 billion to about $3.1 billion. The company's online strategy would involve growing its market share, expanding its geographic reach and increasing the number of items sold.

To that effect, Peapod, Ahold's U.S. online grocery delivery service, opened a new distribution center in New Jersey, and plans to open a new warehouse in Indianapolis next year. Peapod sales this year are expected to total $590 million, which represents annual growth rates of 11% over the last five years.

Giant Food parent behind new Philly store

A November 6 article on Philly.com revealed that Ahold USA (Giant, Stop & Shop) is behind the Everything Fresh store planned in the redeveloped Stapler Building on Walnut Street in Philadelphia. According to the report, the store is part of Ahold's plans to investigate new formats and test ideas.

The "opening soon" sign on the property says the store, which will occupy 3,700 square feet of selling space plus another 1,500 square feet of basement prep space, will offer organics and prepared foods.

An Ahold spokeperson cautions that the location "may not be representative of a new format."

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.

Peapod opens Bucks County facility

Ahold announced last week that it's Peapod division, which offers online shopping services in support of the Giant and Stop & Shop chains in the Northeast and Mid-Atlantic, has opened a facility in Coopersburg (Bucks County) that will allow the company to service Doylestown, Quakertown and Coopersburg.

Peapod services the city of Philadelphia and many of its surrounding areas, and considers itself the largest online grocer in the U.S.

Ahold denies plan to reduce number of banner names in U.S.

Earlier this month a spokesperson for Ahold USA said rumors about reducing the number of banner names in the U.S. was false. A Dutch newspaper had said that Ahold wanted a greater presence and therefore might prefer one common U.S. banner.

Ahold currently operates under the Giant, Martin's and Stop and Shop names, as well as the Peapod online grocery service.

Perhaps they should combine the names. How does "Stop Martin's Giant Peapod" sound?

Ahold USA reports sales increase

As compared to the same time period a year ago, U.S. sales at European-based Ahold improved 4.3% in the fourth quarter to $6.1 billion, and identical-store sales improved by 1.4%. Ahold USA includes Giant, Stop & Shop, Martin's Food Markets and Peapod.

For the fiscal year, U.S. sales increased 3.1% to $25.8 billion. Worldwide, Ahold sales totaled $42.9 billion.

The company said it would keep its "eyes and ears open" about potential acquisitions but didn't say anything about Harris Teeter Supermarkets, which has been rumored to be on the sales block. Ahold and Publix are both rumored to be interested in Harris Teeter.

Performance during hurricane boosts Ahold sales

Giant Food parent Ahold reported last week that their 4.3% fourth quarter sales growth was helped by their ability to keep stores open during Hurricane Sandy. Sales in the U.S. for the full year were up 3.1% to $25.8 billion, with comparable sales up 1.9%.

Ahold also said that the 15 Genuardi's stores it acquired from Safeway performed in line with fourth quarter expectations.

Ahold operates Giant-Landover, Giant-Carlisle, Stop & Shop and Peapod online grocery service.

Peapod by Giant online grocery service to expand

Ahold (Giant, Stop & Shop) officials were in Philadelphia yesterday, where they said the company will accelerate investment in its Peapod Internet shopping site. CEO Dick Boer said the growth of online shopping is the "biggest shift" in the retail food landscape.

"People want to shop online," he said. "More and more are selecting the products in the store and shopping online for them. That dramatic shift brings us clearly to a new era, and a big change in our industry. And we are ready for that."

It was just over a year ago that Ahold introduced Peapod by Giant to the Philadelphia market. Here is my September 28, 2011 post:

Peapod by Giant online grocery shopping to serve Greater Philly 

Many supermarkets remain closed due to Hurricane Sandy

Many supermarkets remain closed due to Hurricane Sandy, including the following:

• ShopRite - 17 stores closed as of this morning, most of which are in New Jersey.
• Stop & Shop - 10 stores (five in NY and five in NJ) were closed as of yesterday.
• Whole Foods - four of the company's seven New York City stores were closed as of yesterday.
• Acme - three stores are closed, all of which are on New Jersey shore islands. As of yesterday, the Sea Isle store had water damage, and the Long Beach Island and Brigantine stores remained inaccessible.
• A&P - some stores are closed due to power outages, according to the company.

Top grocery chains buying up shopping centers

Demand among investors for grocery-anchored shopping centers is high, and grocery chains are buying up many of the centers in what may be both a defensive and cost-saving move, according to a story last week on retailtrafficmag.com.

The defensive purchase by a grocery chain limits the uncertainty that a new shopping center owner brings. At the same time, it can be an effective cost saving move. Kroger, which owns 45 percent of the 2,435 stores it operates, says it saves $1 per square foot per year by owning its stores versus leasing them.

Overall, the biggest grocery chains in the U.S. have invested about $450 million in grocery-anchored shopping center purchases in the last two years. Publix has led the way. The company, which operates 1,058 stores in the Southeast, spent $187.2 million to purchase 17 centers, making it one of the top 10 most active buyers of grocery-anchored centers.

Ahold (Giant, Stop & Shop) also purchased 17 centers during this time period, spending $118.4 million. Kroger has spent $61.7 million for nine shopping centers, and Wal-Mart has purchased four centers for $24.8 million.

According to the story, in many cases the grocery chains are taking advantage of "right of first refusal" clauses that allow them to match other buyer's offers, rather than having to outbid them.

Buyers looking at Supervalu units, but not the entire company

According to a Bloomberg story last Friday, Supervalu (Albertsons, Acme, Save-A-Lot, among others) has received several inquiries from potential buyers interested in individual units of the company, but would prefer to sell off the entire business as a whole. Supervalu hired Goldman Sachs and Greenhill & Co. earlier in the summer to find a buyer.

Reportedly Cerberus Capital Management is interested in Albertsons, and Ahold (Giant, Stop & Shop) is looking at the Shoppers chain, which operates in Maryland, Virginia and Washington.

Most analysts believe selling the company as a whole would be far more difficult than selling off its units separately, unless a buyer was willing to keep some of the chains and sell off others. That's a risky, venture, though, since such a buyer would be taking on $6.14 billion in net debt along with $1.05 billion in pension obligations.

Save-A-Lot, which has a number of stores in the Philadelphia market, would be the most valuable Supervalu asset, according to a Citigroup analyst who thinks the chain is worth about $817 million.

Currently Supervalu and its 11 chains have approximately 2,400 retail food stores and a wholesale business with 2,660 customers.

Ahold reports higher sales, remains cautious about the future

Ahold USA, parent company of Giant and Stop & Shop, reported yesterday that sales increased 3.4% to $6 billion in the second quarter as compared to the same period a year ago. The company also announced gains in identical-store sales and operating margin (to 4.3%).

Worldwide, Ahold's net income rose on higher sales. CEO Dick Boer said he expects market conditions to remain difficult and is cautious about the potential impact of rising food costs in the United States.

As for the recent conversion of 15 Genuardi's stores in the Philadelphia market, the company said it was pleased. Boer won't rule out additional acquisitions, but says the current store base in the U.S. is more important.

ShopRite workers approve new labor agreement

We're used to reading about problems between supermarket chains and their unionized employees, just as we're used to reading about ShopRite's success and climb to supremacy in the Greater Philadelphia Region. So, it should come as no surprise that 24,000 workers at ShopRite and Stop & Shop stores in New York and New Jersey represented by United Food & Commercial Workers Local 1262 voted to accept a new labor agreement.

According to Union President Harvey White, the new two-year contract provides health care benefits, pension and wage increases. He calls it one of the best labor agreements in the Northeast.

Fourth quarter sales up 5% at Ahold USA

Giant and Stop & Shop parent Ahold USA reported that fourth quarter sales were up 5% compared to the same period one year ago. Total sales for the company's three divisions - Stop & Shop, Giant-Landover and Giant-Carlyle - were $5.9 billion for the quarter.

For the full year, Ahold USA sales increased 6.6% to $25.1 billion. Worldwide, Ahold reported a 4.5% increase in fourth quarter sales, and full year sales rose 2.5% to $38.9 billion.

It was announced a couple weeks ago that Giant-Carlyle purchased 16 Genuardi's stores in PA in a deal expected to close in a few months.

Wegmans MA store (70,000 SF) to be smallest in a decade

Last Monday, Wegmans announced that its upcoming store in Newton, MA (a densely-populated suburb that borders Boston), planned for 70,000 SF, will be its smallest in a decade. By comparison, the nearby Northborough, MA location is 138,000 SF, and the store recently announced for Montgomeryville, PA will be 120,000 SF.

A Wegmans spokesperson said the 70,000 SF footprint represents a new design and concept for the company. The store will anchor Chestnut Hill Square, a complex with 160,000 SF of shops, offices and luxury residences.

The Northborough store, which opened in October, had more than 25,000 local shoppers sign up for a Wegmans discount card before the supermarket even opened. According to the publisher of The Griffin Report of Food Marketing, Wegmans plans to open six or seven stores in a short period of time across New England.

At 70,000 SF, this "small" Wegmans will still be larger than most Stop & Shop markets, which are typically about 60,000 SF. Stop & Shop New England (a division of Ahold USA; same parent company as Giant) has more than 200 locations throughout MA, NH, CT and RI.

Foodtown announces creation of new co-op

On Friday, Foodtown President and COO Bill Donahoe announced the formation of Allegiance Retail Services, LLC, a company that will function like a co-op by providing retail services to Foodtown operators. Independent retailers operating under non-Foodtown banners will also be able to benefit from the co-op.

According to Foodtown, Allegiance will provide members with advantages such as collective buying power, advertising and marketing services, IT / POS support, more than 1,100 Foodtown brand products, and loyalty, gift card and payment processing services.

Foodtown, which closed its Lansdale, PA store earlier this year and recently announced the sale of five New Jersey stores to Stop & Shop, lists 41 open locations in PA, NJ and NY on its website.

U.S. Sales Boost Ahold (Giant)

Ahold reported a 6.2% increase in net income for its first quarter and cited its U.S. brands (Giant, Martins, Stop & Shop) as strong performers.

In the U.S:

• Identical store sales improved 3.2% (not including fuel);
• Total sales increased 7.4% to $7.6 billion.

Overall, net income for the company improved 6.2% to $425 million on net sales of $13.5 billion, up 5.9% from the previous quarter.

C&S Wholesale keeps growing despite A&P losses

An executive for C&S Wholesale Grocers said yesterday the company is growing through the addition of customers like Ahold (Giant, Stop & Shop), Foodtown and Target. This growth comes despite the fact that bankrupt A&P had accounted for as much as 20% of the company's revenues.

At a conference yesterday, C&S Senior Vice President and Treasurer Tim Ludlow said they have recently added $1 billion in new business with Ahold and may double its current volume with Target this year. They have also added the Foodtown cooperative as a wholesale customer.

Source: Supermarket News