Walmart wins bid for liquor license in PA

Walmart submitted the top bid for a restaurant liquor license earlier this year for a store in South Union Township in southwestern Pennsylvania. It's the first liquor license in PA for Walmart, assuming the company files the required application and is awarded the license.

"We want Walmart customers in Fayette County to save money so they can live better," said a Walmart spokesperson, predictably.

According to Shawn Kelly from the Liquor Control Board, if Walmart is granted approval for the license, they will have to turn a portion of their store into a cafe that measures at least 400 square feet and has at least 30 chairs. Walmart would also be limited to selling 192 ounces of beer (approximately two six-packs) per transaction for off-premises consumption.

It is expected that Walmart will apply for a permit to sell up to three liters of wine per retail transaction.

Walmart isn't the first big box store in Pennsylvania to acquire a liquor license. A Target store in Plymouth Township (Montgomery County) has had a restaurant liquor license since last November. Several supermarkets and convenience stores - as well as movie theaters - already own liquor licenses in the state.

Amazon still dominant, but competitors gaining ground

Nielsen reported recently that Amazon's e-commerce lead is shrinking as major brick-and-mortar retailers like Target, Walmart and Kroger - along with e-grocery company Instacart - have outpaced Amazon in percentage growth of online consumer packaged good (CPG) purchases.

In the two-year period beginning in January 2017, the number of e-commerce buyers of grocery and other CPG products for Amazon rose 29%. However, the growth for Instacart (256%), Walmart (207%), Kroger (172%) and Target (122%) was far greater.

According to Nielsen, Amazon competitors gained ground in the last couple years by rapidly ramping up their online grocery fulfillment capabilities for home delivery and for store pickup.

Despite big gains by competitors, Amazon still enjoys a healthy lead. Its reach among U.S. online purchasers is approximately ten times more than any other retailer.

Costco and Target are primed for growth, experts say

According to participants in Supermarket News' 23rd annual Financial Analysts' Roundtable, warehouse clubs, specifically Costco, may be primed for a growth surge.

Wolfe Research Managing Director Scott Mushkin said that Costco's broad mix of offerings make it a big draw.

"Costco, over time, has created more and more reasons to pay for that membership," Mushkin said. "It's an incredibly positive business model."

"They are probably the best merchants of any retailer I've ever covered," added Karen Short, managing director for equity research at Barclays Capital. "They keep pushing the envelope and keep pushing their vendors, and the deals and price point just keep getting better and better."

As for BJ's Wholesale Club, Mushkin had a negative outlook. "If there were a Costco and a BJ's next to each other, it doesn't make any rational sense to actually have a membership to BJ's because the offering is so much more extensive at Costco and the savings are better," he said.

The participants also singled out Target, which they believe could be a sleeping giant in grocery if it continues to improve its fresh offering and out-of-stocks, and improves on its execution. The panel cited Target's strong private labels and the company's ability to develop innovative departments and merchandising.

Study shows that consumers still prefer visiting supermarkets for groceries

Despite all the hype around online ordering and delivery services, a recent study conducted by TABS Analytics found that conventional supermarkets and Walmart are overwhelmingly the top destinations for regular grocery shopping.

Of the 1,000 U.S. adults surveyed, 75% said traditional grocery stores were the retail venues they regularly visited to buy food and beverages (more than six times per month), and 57% cited Walmart.

However, compared to last year, 2% fewer people named supermarkets and Walmart as the places they regularly shop for food and beverages, and 2% - 4% more customers named dollar stores, drug stores and discount grocery stores. Target, Trader Joe's and Whole Foods saw gains as well.

Just one in six consumers said they regularly shopped online for groceries.

Weis Markets launching same-day delivery via Shipt

Weis Markets announced that it will rollout same-day delivery via Shipt beginning on September 6 in 11 markets throughout Pennsylvania, Delaware and Maryland. Shipt, based in Alabama and owned by Target, said the rollout will give nearly 2.6 million households access to products delivered from Weis in as soon as one hour.

The same-day service will serve as another online option for Wies customers, as the supermarket chain already has its Weis 2 Go click-and-collect grocery service available at about 90 stores. Weis operates 2016 stores in Pennsylvania, Delaware, Maryland, New Jersey, New York, West Virginia and Virginia.

Target posts best quarter in over a decade

Target announced this week that the company's second quarter results were its strongest in more than a decade, fueled by a 6.5% same-store sales increase, as well as a 6.4% increase in customer traffic.

Last year Target began implementation of a strategy that earmarked $7 billion to improve digital operations, expand private label collections, lower prices and remodel stores. The retailer also opened smaller store formats in big cities and near college campuses.

Target's 2017 purchase of Shipt has paid off as well, as digital sales grew 41% last quarter as compared to a year ago.

According to COO and Executive Vice President John J. Mulligan, "Over the last year, Shipt's membership base has more than tripled, while orders, revenue and gross merchandise volume are two-to-three times higher."

Total revenue for the quarter reached $17.8 billion, a 6.9% increase compared to the same quarter a year ago.

Lidl expands delivery via Shipt

Shipt announced last month that it has begun to offer online grocery delivery services for Lidl stores in Northern Virginia. The company said that fresh foods, household essentials and other grocery items ordered through its online marketplace can be delivered from Lidl stores in Ashburn, Fredericksburg, Manassas and Woodbridge in as soon as an hour.

In addition to the Northern Virginia communities, Lidl offers Shipt delivery in select South Carolina, North Carolina and Virginia markets.

Shipt, a wholly-owned subsidiary of Target Corp., offers delivery services to several grocery retailers.

Target continues to expand same-day and next-day delivery

Last month Target announced that it rolled out its Target Restock service nationwide, and that the company has expanded its Shipt same-day delivery service in six midwestern states.

Restock

According to Target, more than 75% of the U.S. population can order from an assortment of 35,000 items and have their "Restock box" delivered to their door the next day. Through the Restock service, customers can order food, home essentials and other consumer staples.

Customers can order as late as 7:00pm and have their boxes delivered the next day. Target fulfills the orders from shelves of nearby stores.

Shipt

With the planned addition of 12 million Midwest households, same-day delivery via Shipt, which Target acquired last December, will soon be available to more than 60 million households in more than 100 markets nationwide. Target expects the service to be in 180 markets - reaching 80 million households - by the end of this year.

Through Shipt, Target customers can get same-day delivery of more than 55,000 groceries, household essentials, electronics, toys, home and other items.

An annual Shipt membership provides free, same-day delivery on orders of more than $35. Members search and shop online, make special requests, select a one-hour delivery window, and pay for their order. Personal shoppers pick, bag and delivery the orders.

Amazon remains the low price online grocery leader, but Walmart is closing in

A study conducted by e-commerce specialist Profitero claims that Amazon remains the low price online grocery leader by a slim margin over Walmart. Profitero's "Price Wars: Grocery, Household & Beauty" report found that Walmart.com's grocery prices average 1.8% more than Amazon's.

Target ranked third in the study with Walmart's Jet.com coming in fourth.

"With consumer buying decisions increasingly based on price, and dynamic pricing made possible through technology and advanced algorithms, the so-called 'price wars' have escalated," according to Profitero. "Some recent industry studies have fundamentally concluded that while Amazon is often less expensive than its online counterparts, its price-leading position is being challenged by competing retailers, especially Walmart."

Sprouts confirms South Philly store but isn't coming to South Jersey

Sprouts Farmers Market announced that its first Pennsylvania store, under construction in South Philadelphia, will open before the end of the year. The 32,000 square foot store will be part of Kimco Realty's Lincoln Square development that includes Target, PetSmart and approximately 350 apartments.

It had been reported since last spring that Sprouts was coming to South Philadelphia and the vacant Macy's space at the Moorestown Mall in New Jersey. However, a spokesperson for PREIT, the mall's owner, said the company is moving forward with another grocer for the site.

Sprouts operates 280 stores in 15 states.

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.

Is Target next for Amazon?

A former analyst who followed Apple closely and was known for his accuracy in predicting their financial performance over the years made news recently by forecasting that Amazon will buy Target in 2018.

"Target is the ideal offline partner for Amazon for two reasons, shared demographic and manageable but comprehensive store count," said Loup Venture Co-Founder Gene Munster. "Getting the timing on this is difficult, but seeing the value of the combination is easy."

Analysts have been making several predictions about Amazon's next deal. Companies mentioned recently have included Lululemon Athletica, Abercrombie & Fitch, Bed Bath & Beyond, and Advanced Auto Parts. One analyst foresees Amazon purchasing a small- or mid-sized bank.

Target acquires Shipt, plans same-day delivery

Target announced earlier this month that it plans to acquire Shipt, an Instacart competitor that currently serves 72 US markets and delivers products to customers from supermarket chains including H-E-B, Harris Teeter and Meijer, among others. Target has agreed to pay $550 million for the company and expects to roll out same-day delivery services to half of its stores by early 2018.

Shipt customers currently pay $99 annually for unlimited deliveries. Instacart's fee is $149.

Target said that Shipt would conitnue to run its business independently. The transaction is expected to close by the end of the year.

Target to close 12 big box stores and expand small-format portfolio

Target announced last month that it plans to close 12 stores on February 3, 2018. The company said that the closings are due to "several years of decreasing profitability." According to reports, none of the stores slated for closure are in the Greater Philadelphia or Northeast market.

Despite the closings, Target is significantly expanding its smaller format footprint, which Target CEO Brian Cornell has said are more profitable than their big box locations. Target has opened 32 smaller format stores this year and plans 35 more in 2018.

In addition, Target has also committed resources towards updating about 1,000 of its 1,800 stores by 2020.

Target expanding "Restock" delivery service

Target announced last month that it plans to expand Target Restock, its next-day delivery service, to eight new markets, including Philadelphia.

Target Restock allows customers to fill a shopping cart-sized box with household items and have it delivered the next day for $4.99. Over 15,000 household items, including baby products and cleaning supplies, are eligible for the service.

According to Target, the most popular "Restock" items so far have been snacks, beverages, cereal, mac and cheese, and paper towels.

Whole Foods price reductions hit competitors hard

Thasos Group, a New York-based research firm, issued a report based on mobile phone location data that showed that Amazon's lower prices at Whole Foods contributed to a 17 percent rise in foot traffic for Whole Foods stores the week of August 28, and that traffic remained modestly higher by mid-September. Amazon officially merged with Whole Foods on August 28.

According to the report, the data also indicated that the largest percentages of new customers for Whole Foods during the first week of price reductions were regular customers of Walmart (24%), Kroger (16%) and Costco (15%). When adjusted for the size of the customer base, Trader Joe's (10%), Sprouts (8%) and Target (3%) saw the highest percentage of shoppers defect to Whole Foods during that period.

Thasos Group reported that by September 16, Whole Foods traffic was up 4 percent on a year-over-year basis.

"We all know that Amazon's acquisition of Whole Foods has the potential to be a game-changer in the grocery space, and in the bricks-and-mortar versus online battle more broadly," said Thasos Group CEO Greg Skibiski. "It will be extremely interesting to watch the winners and losers emerge from the data over the coming months."

ShopRite tops in New Jersey with 139 stores

A story on NJ.com last month listed the 10 biggest supermarket chains (by number of stores) in New Jersey. Here's the list.

ShopRite - 139 stores
Acme - 77
Stop & Shop - 61
Target - 44
Aldi - 42
Walmart - 29
BJ's Wholesale Club - 23
Kings Food Market - 23
Save-A-Lot - 22
Key Food - 22

Stores in New Jersey with fewer locations include Whole Foods, Trader Joe's, Wegmans, Weis Markets, and soon... Lidl.

Survey says millennials shop for groceries differently than the rest of us

According to a recent survey by the International Council of Shopping Centers, 99 percent of adults in the U.S. buy some or all of their groceries in person. Those surveyed cited immediate access to products and the ability to select fresh meat, dairy and produce as the top reasons.

The survey also revealed that 93 percent of adults shop for groceries at discount department stores (Walmart, Target), and 92 percent shop at traditional supermarkets . Sixty-nine percent of the people surveyed said they shop at limited assortment food stores (Aldi, Trader Joe's) and warehouse clubs.

Millennials revealed different shopping behaviors from all others. Seventy-four percent of them buy groceries from convenience stores, 67 percent from Amazon or other online retailers, and 66 percent from high-end supermarkets. Even when buying online, 81% of millennials go to the store to pick up their groceries.

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.

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.