Trader Joe's to end grocery delivery in Manhattan

Trader Joe's announced that effective March 1, the company will cease grocery delivery services in Manhattan stores. According to Business Insider, an email statement from Trader Joe's cited cost and the availability of other delivery services in the area.

Unlike most leading grocers, Trader Joe's typically does not provide online grocery shopping, nor does it offer delivery services. However, third-party services like Postmates and Envoy deliver from Trader Joe's in some states.

Despite the increasing rollout of online grocery shopping, delivery and pickup services, recent studies show that most consumers prefer to shop for groceries in stores. Still, U.S. consumer spending online for groceries is expected to rise about 15% next year. If so, the overall online share of grocery sales will reach 6.3%.

Trader Joe's tops annual Retailer Preference Index

According to Dunnhumby's second annual Retailer Preference Index (RPI), Trader Joe's was the top grocery retailer, followed by Costco, Amazon, H-E-B and Wegmans. In a survey of 7,000 U.S. households, the RPI examined 56 grocery retailers to determine which companies have the strongest combination of consumer emotional sentiment and financial performance.

Market Basket finished 6th, followed by Sam's Club, Sprouts Farmers Markets, WinCo Foods, Walmart, Aldi, Peapod and The Fresh Market.

Dunnhumby said the rankings focused on seven "pillars": price; quality; digital; operations; discounts, rewards and information; convenience; and speed.

The company concluded that the top retailers on the index are mostly nontraditional grocers that have developed a highly targeted offering to bolster the value perception for their customer base.

"More traditional, regional grocery banners with a long history are hurting because of it, having relatively poorer-performing financials and/or emotional bonds," Dunnhumby said. "The reason: These traditional banners have inferior price perception and/or quality."

Trader Joe's also finished atop the rankings last year.

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.

Whole Foods taking a small bite out of Trader Joe's traffic

In the past year, Whole Foods has increased foot traffic at the expense of Trader Joe's, Walgreen's and Dollar Tree, according to Sense360, a California-based company that tracks location data from millions of smartphone users. The data covers Whole Foods locations that are within a mile of competing stores.

In addition, the number of shoppers who visited a Whole Foods at least six times in the past year increased to 11 percent in August as compared to 9 percent a year earlier, according to surveys by consumer products research company Tabs Analytics.

As for the competition for grocery dollars between Amazon / Whole Foods and Walmart, a former Amazon executive said that Amazon is "willing to experiment and be totally misunderstood for long periods of time. Walmart is built to deliver pallets to 4,000 stores and Amazon is built to deliver packages to millions of homes. Who do you want to bet on: the pallet people or the package people?"

Trader Joe's proposed for Cherry Hill

Plans presented to Cherry Hill officials earlier this month reveal that a Trader Joe's store is proposed for The Shoppes at Garden State Plaza. TJ Maxx and HomeGoods are proposed as well.

If approved, the new stores, along with a Shake Shack restaurant, would be built on Haddenfield Road and Garden Park Boulevard, between Pier 1 and PNC Bank. Previous plans had called for townhouses to be built on that location.

Several projects in the shopping center complex are still pending, including a Costco.

The Market Place at Garden State Park, which is connected to The Shoppes, includes Wegmans, Home Depot, Barnes & Noble, Best Buy, Dick's, Bed Bath & Beyond, Christmas Tree Shops, and several other retailers and restaurants.

Grocery store openings fell sharply in 2017

According to an annual "Grocery Tracker" report from JLL, grocery store openings dropped 28.8% in 2017 compared to the previous year. The report states that the decline reflects chains' efforts to reexamine their current footprints and rethink strategies to deal with new online and brick-and-mortar competition.

JLL said that California led the way in 2017 with 1.6 million square feet of new grocery store space. Virginia and North Carolina combined for 2.7 million square feet of new space, and Texas was described as "still one of the hottest states for grocery expansion."

Sprouts, Grocery Outlet, Aldi and Lidl were mentioned as notable chains that are expanding.

JLL's report said that investment in grocery-anchored centers grew 5.3% in 2017, and the company expects supermarkets to retain high interest as anchor tenants for shopping centers.

"It (grocery-anchored centers) was one of the only retail sectors to see growth in a year of low transaction volume," the study said. "Grocery-anchored centers remain a safe bet for investors, as overall transaction volume for retail has been down, indicating the asset remains a stable sector."

The study mentioned that the increase in smaller footprint stores is a clear trend - for more compact formats like Aldi and Trader Joe's, as well as for traditional supermarket chains and mass merchants like Walmart and Target.

"The grocers that can deliver the right in-store experience, combined with the right online pickup or fulfillment plan... are the ones that will thrive, whether their stores are 15,000 square feet with limited products or take up a footprint four times as large," said James Cook, JLL director of retail research.

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.

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.

Food website reveals suppliers of some Trader Joe's products

An article earlier this month in a food news website called Eater revealed the companies that produce several of Trader Joe's beloved products.  Most of the time people don't care which companies are behind the private label brands we buy in the grocery store, but since Trader Joe's won't fess us, and since suppliers are sworn to secrecy, it is indeed a big deal to some.

The folks at Eater used Freedom of Information Act requests to obtain FDA and USDA recalls and alerts that mentioned Trader Joe's, and the results revealed dozens of companies that supply, or have supplied, products for the popular retailer. For instance...

Pistachios - Wonderful Pistachios
Hummus - Tribe Mediterranean Foods
Smoothies and other assorted beverages - Naked Juice
Pita Chips - Stacy's Simply Naked Pita Chips
Gluten-free chocolate chip cookies - Tate's Bake Shop
Pretzel Slims and dark chocolate pretzels - Snack Factory
Organic animal crackers - Stauffer's

Of the items above, the only one that's more expensive at Trader Joe's compared to the name brand was the animal crackers. On average, the Trader Joe's products were 37 percent less expensive than their brand-name versions.

For more information, visit eater.com.

Report predicts that traditional supermarkets will decline rapidly

A report released by Inmar predicts that nearly one in four traditional grocery stores won't be around in five years. Inmar is an analytics and technology-enabled service provider in the retail space.

The report concludes that dollar share for traditional supermarkets will continue to decline through 2021, while fresh, limited assortment and warehouse stores will gain in dollar share and store count over the same period. In addition, food e-commerce is projected to grow at a rapid pace.

According to the report, store counts will decrease over the next five years by nearly 25% from about 25,000 to 19,000, while dollar share for traditional supermarkets will decrease from 36.5% to 33.7%.

The drug store is the only other significant channel projected to see a decrease in dollar share (-0.6%).

Inmar predicts that e-commerce food sales will more than double by 2021, from $33 billion, or 4% of the current food and beverage market, to $70 billion, or 8% of the projected market.

Limited assortment stores like Aldi, Trader Joe's and Save-A-Lot will grow by more than 21% or nearly 1,000 stores over the next five years, while their dollar share increases from 3.1% to 4.4%, according to the report.

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.

Target adding grocery employees, pushing to boost food sales

The Wall Street Journal reported last week that Target stores across the U.S. will soon have teams of employees working exclusively in their grocery sections. The change is part of a plan to improve the company's grocery revenue, which currently accounts for about 20% of the retailer's business.

Last March Target announced it would cut back on its dry packaged goods and add more fresh produce, as well as more organic and gluten-free products. However, Target is not alone in these efforts, as similar investments in the product mix and in customer service have been made by Walmart, Kroger, Aldi and Trader Joe's.

Despite Target's recent changes, their most recent quarterly results showed a 1.1% decrease in comparable store sales.

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.

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.

Whole Foods getting flak from analysts over new 365 format

Whole Foods Co-CEO Walter Robb was widely criticized by analysts earlier this month when he outlined strategies for the rollout of the company's smaller "365 by Whole Foods Market" format. According to Whole Foods' website, the new stores, slated to begin opening this year, will offer convenience and everyday low prices on natural and organic products.

"Whole Foods is tilting its growth towards an unproven, discount format that appears to be directly aimed at a strong competitor, Trader Joe's," said Wolfe Research Managing Director Scott Mushkin. "Trader Joe's has been in the business for roughly a half century, does the discount treasure-hunt format exceptionally well, and is private, meaning it doesn't have to answer to public equity investors each quarter."

Mushkin added that Whole Foods' decision to reduce store labor to fund price investments has already had a negative impact on store conditions, and was critical of the company's decision to maintain earnings by buying back stock.

Many analysts probably also don't like Whole Foods' new program called "Friends of 365," where approved suppliers and vendors can set up shop in the 365 stores. The new chain's website says shoppers may see businesses such as record shops and tattoo parlors inside 365 stores in order to appeal to younger customers.

During a conference call with investors, Whole Foods said they have 13 leases signed for the new format, with the first 365 stores set to open in California, Oregon and Washington.

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