Sn Off the Shelf: Recent Episodes
Supermarket News
The plant-based food industry is experiencing mixed results at the grocery retail level. Some products, like dairy, continue to flourish while other areas, like plant-based meat, are struggling. In this episode of SN of the Shelf, Supermarket News Senior Editor Bill Wilson talks with Douglas Brown, senior retail reporter with New Hope Network. Brown talks about the state of the industry and some of the emerging trends with plant-based products.
SN sat down with Upshop VP of Customer Success Lauren Kennedy to talk about why sustainability efforts for grocers are more important than ever
Supermarket News Executive Editor Chloe Riley sat down with Alex Kinnier, the co-founder and CEO of Upside, to talk about a new report Upside has about consumer spending behavior — and how grocers can be thinking differently about courting shoppers who are less inclined towards loyalty than ever before.
Regenerative farming has been gaining momentum for a while now, and a prime example as to how far it has come is to look at Burroughs Family Farms in California’s Central Valley. Benina Montes, who is a managing partner, grew up on the farm and saw the transition to regenerative practices. She talks about what they do at Burroughs Family Farms and what the future holds for the practice.
Newtopia Now has certainly made a name for itself.
Formerly Natural Products Expo East, the show held in Denver last month had an all-natural buzz to it and served as a springboard to successful events moving forward.
The show had over 550 exhibitors, with 180 exhibiting for the first time at any trade show, and over 7,000 attendees, according to show officials.
Heavy hitters in the natural and organic food industry like Whole Foods, Target, and Sprouts Farmers Market were also in attendance.
The core goal of Newtopia Now is to create a meeting place for CPGs and retailers in the natural and organic market, according to New Hope.
The show was divided up into four sections or “neighborhoods”: “Thrive,” “Glow,” “Regenerate,” and “Represent.”
Newtopia Now also had a kitchen area where natural and organic dishes were being created, a café, and a Tasting Bar located right off the show floor where attendees could sample various products of the show.
There is a lot of work that goes into show planning, and with the new name the effort took on more importance.
Supermarket News sat down with Jessica Rubino, vice president of content for New Hope Network, at the show to talk about what went into the name change, the energy during the first day of the event, and some of the features.
Electronic Shelf Labels (ESL) are taking off. Walmart recently announced that it plans to switch over to 100% electronic shelf labels by 2026, citing a need for increased productivity and reduced walking time as well as simplified stock replenishment and faster order picking and fulfillment. ESL is transitioning past the early adopter phase — the tech is now becoming more and more a necessity that gives retailers a leg up.
The cost on electronic shelf labels has also been dropping in recent years and, simultaneously, labor costs have been rising. All of which has industry analysts speculating that ESL tech is going to begin to quickly scale.
On this special tech edition of our podcast, “SN Techwire,” Supermarket News editor Chloe Riley sat down with Tighe Renner, senior manager, new business development with Aperion (a retail technology arm of the Hussmann Corporation) whose primary product is ESL offerings from digital store solutions company Hanshow.
Whether they have the local benefits of an independent or the scale of a chain, supermarket operators need as much information as they can take in about their guests’ buying patterns, preferences, and demographics. But which sources help them the most?
Supermarket News Intelligence recently investigated where more than 100 retailers turn to collect data on customers and their spending habits in our 2023 Tech Market Leader Report.
“It’s still an AI story,” Perrier told SN recently at the FMI Midwinter Conference in Marco Island, Fla. “ I think the big difference is…years ago we were talking about personalization and targeting…now we’re actually seeing real use cases, real demos. Large scale language models are being used to help retailers generate revenue and it’s quite powerful.”
In this special edition of our SN Off the Shelf podcast — SN TechWire — SN spoke with Sylvain Perrier, president and COO of grocery ecommerce software company Mercatus, about how grocers can smartly use personalization to drive loyalty and customer retention.
On today’s TechWire podcast, you’ll learn:
- How can grocers can be leveraging personalization to get the whole basket
- What’s more important today: ecommerce or engagement?
- Why AI isn’t going anywhere anytime soon (and how you can best leverage it)
Take a listen.
When given the chance, those opposing the Kroger, Albertsons merger have let themselves be heard. It happened again in Colorado, where a number of people stood up during a meeting attended by Federal Trade Commission Chair Lina Khan and urged the agency not to approve the deal.
Grocery price increases and job security are the two top concerns expressed by consumers, workers, and unions.
But what if grocery prices remained competitive after the merger and a minimal number of jobs were lost? It most likely will happen, according to Eric Fruits, senior scholar at the International Center for Law and Economics. Fruits is the co-author of the white paper titled, “Food-Retail Competition, Antitrust Law, and the Kroger/Albertsons Merger.”
In the latest episode of SN Off the Shelf, Supermarket News Senior Editor Bill Wilson talks with Fruits about the Kroger, Albertsons merger which, according to Fruits, enough has been done to satisfy the parameters of a fair deal.
Take a listen.
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Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
A little over a year ago Ahold Delhaize USA made a major move in the retail media game.
Peapod Digital Labs, the e-commerce and digital innovation arm of Ahold Delhaize USA, announced plans to grow its AD Retail Media network into an end-to-end, in-house retail media business. That will enable consumer packaged goods partners to better leverage the long reach of Ahold Delhaize grocery retail brands, which encompass more than 2,000 stores, process over 23 million transactions weekly, engage nearly 24 million active loyalty card users and generate more than $51 billion in annual sales.
In this episode of SN Off the Shelf, Supermarket News Senior Editor Bill Wilson had the chance to check in with SVP of Retail Media at Ahold Delhaize USA Bobby Watts at Groceryshop 2023 in Las Vegas.
Watts believes retail media has not reached its peak yet and cautioned that retailers need to keep the consumer in mind when executing a plan.
Take a listen.
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Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
The landscape for center store beverage categories has been shifting dramatically, as consumers gravitate toward newer players that provide functional benefits, like prebiotic and probiotic sodas, as well as old standbys like energy drinks.
Supermarket News Executive Editor Chloe Riley sat down with Numerator’s Mike Scavuzzo at the recent EXPO East Natural Products show in Philadelphia, Penn. to talk about the significant growth in functional beverages.
Highlights from Scavuzzo’s 2022 recap on the prebiotic and probiotic soda category:
- Just shy of $162 million in category projected sales on 107% growth vs 2021
- Total households, up 71%
- Average spend per household, up 22%
- Purchase frequency, up 12%
- Spend per trip, up 9%
- Spend per unit, up 2%
- Units per trip, up 7%
“The brilliance of these brands is that they took a high penetration, mainstream category and made it ‘better for you.’ Mainstream means consumer approachability and little education needed to understand what the product is.. Better for you is self explanatory. That deadly combo is making a dent in CSD (carbonated soft drink) sales and you better believe Coke and Pepsi are on high alert.”
Take a listen.
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Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
Retail media has been exploding over the last year, and Dollar General is right there riding the wave.
However, the discount retailer is taking a different approach. Rather than doing retail media in-house, Dollar General is partnering with third parties to deliver the message to consumers.
In this episode of SN Off the Shelf, Supermarket News Senior Editor Bill Wilson talks with Chad Fox, who is vice president and chief marketing officer at DG. Hear how Dollar General has taken on the world of retail media with its own flair.
Take a listen.
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Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
The plant-based category has had its share of ups and downs. A year ago, The Guardian asked whether the plant-based sales phenomena of the last decade was finally starting to be on the outs. But recent data from Kroger data arm 84.51° suggests that consumers are still choosing plant-based, especially in the plant-based dairy category.
Some key findings from the 84.51° data:
Shift in spend: Shoppers who engage with plant-based foods generally reduce their engagement with animal-based foods. Shoppers who increased their plant-based engagement overall increased their dollar spend in total plant-based foods by 92%, while only increasing animal-based spending by 9% in the same period
Consumers are choosing plant-based: 38% of surveyed shoppers indicate they are choosing plant-based milk instead of animal-based milk; 25% are choosing plant-based meats instead of animal-based meat; and 22% are choosing plant-based yogurt instead of animal-based yogurt
Ecommerce as growth engine: Plant-based foods hold a higher market share in ecommerce likely due to easier searchability and increased variety of products
Over 1.4 million Kroger households engaged with plant-based categories on their ecommerce platforms during the 12-week study period. While Millennials were the most engaged, all generations were represented, illustrating a broad opportunity to optimize omnichannel strategies based on consumer buying preferences.
At the recent EXPO East natural products show in Philadelphia, Penn., Supermarket News Executive Editor Chloe Riley sat down with 84.51° Lead Consultant, Insights Account Manager Shannon Weis, to talk about how consumers are actually shopping plant-based today.
Take a listen.
After nearly four decades of serving the natural and organic CPG industry, natural products media group New Hope Network has announced that the 2023 Natural Products Expo East will be the trade show’s final edition.
Natural Products Expo West will continue to take place annually in Anaheim, California. And springing up in place of EXPO East is a new show called Newtopia Now — which will be designed to provide more opportunities for brands to meaningfully participate, regardless of where they are at in their lifecycle.
Supermarket News Executive Editor Chloe Riley spoke with Jessica Rubino, vice president, content at New Hope Network, about trends on the show floor at the final EXPO East, as well as taking a look ahead, for an exciting preview of the group’s latest trade show: Newtopia Now.
Take a listen.
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Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
Ahold Delhaize USA CEO JJ Fleeman was at Groceryshop 2023 in Las Vegas last week talking about omnichannel strategies.
However, you must know how customers are responding to a given channel to come up with an effective overall experience. In that regard, Ahold Delhaize has insight research teams and work with CPGs. Analysts and economist teams also provide input, and shop-a-longs are another way the grocer monitors trends and changes in shopper behavior.
Supermarket News Senior Editor Bill Wilson had the chance to catch up with Fleeman at the show, and talked about everything ranging from the omnichannel experience to shrink inventory and retail theft.
In this episode you will hear about:
- Ahold Delhaize’s omnichannel strategy
- Acting quickly on shopper trends and behavior
- Digital media growth
- Technology at fulfillment centers
- Market consolidation
- Retail theft
Bold is certainly one word to describe the strategy of the West Des Moines, Iowa-based Hy-Vee over just the past five years. In that amount of time, the retailer has continued to ramp up its growing expansion in pharmacy and health care; rebranded its Hy-Vee Gas convenience concept to Hy-Vee Fast & Fresh; and continued to lead the market with its foodservice and prepared foods strategies.
Hy-Vee’s foray into health care and pharmacy over the past decade (and even just the past five years) has been extensive. In 2014, the retailer acquired Amber Pharmacy, one of the largest privately owned specialty pharmacies in the country and a driving force behind Hy-Vee’s national health care strategy. That acquisition allowed Hy-Vee to move forward with providing specialty pharmacy services in all 50 U.S. states and Puerto Rico.
Perhaps the retailer’s most ambitious step into health care would be the launch of the first Hy-Vee Health infusion clinic, opened in April in West Des Moines. (A second opened in Chicago in August)
“We’re viewed as a food company, but our largest department is pharmacy,” said Jeremy Gosch, Hy-Vee CEO since 2022. “So health care plays a massive, massive role in Hy-Vee, and I think we’re just scratching the surface of what we’re going to be doing with health care moving forward.”
Supermarket News Executive Editor Chloe Riley sat down with Gosch at Hy-Vee headquarters, and talked with him about foodservice at retail, the company’s continued branding around fresh, and how health care is the future.
Take a listen.
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Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
A recent monthly category report indicates that, when it comes to groceries, consumers are very much fluctuating between what, how much, what brand, and where they purchase — all as a reaction to the impacts of inflation.
Along those lines, the July category update from 210 Analytics (with data provided by Circana) found that during the same visit, consumers might purchase some premium products, while going ultra-value on other items.
So it’s a toss up. Consumers have all kinds of purchase intents when they arrive at the grocery store, and their baskets reflect that.
Supermarket News Executive Editor Chloe Riley spoke with Anne-Marie Roerink, president of 210 Analytics, for a look at what’s driving some of this behavior (in addition to inflation), as well as a category update across meat, seafood, and produce.
Take a listen.
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Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
In early August discount grocery store operator Save A Lot sold the last of its 18 stores to become a wholesaler and licensor to the Save A Lot store network.
It was a natural transition for Saint Ann, Mo., based retailer, which will now focus on providing the right core offering and the right framework for its network of independent retailers.
“As we’ve made a strategic shift to become a licensed wholesaler, it’s clear that our long-term growth momentum must be rooted in the success of our strong network of retail partners,” said Leon Bergmann, CEO of Save A Lot, in a statement following the 18-store selloff.
The move to a wholesaler actually started in 2019 before Bergmann became CEO of Save A Lot, but he believes it was the right move to make.
Bergmann sat down with Supermarket News Senior Editor Bill Wilson to talk about the move to a full-fledged wholesaler as well as other topics like food deserts and grocery price inflation, which Bergmann believes has not reached its peak.
In this episode you will hear about:
- Why Save A Lot made the pivot to the wholesale level
- How Save A Lot will focus on fresh offerings in its distribution network
- Save A Lot’s strategy to promote a fresh approach
- Save A Lot’s pricing approach throughout its network
- The impact of food deserts in the U.S.
- The status of grocery price inflation
Take a listen.
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Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
Dutch multinational retail and wholesale holding company Ahold Delhaize, which operates the Stop & Shop, Giant, Food Lion, and Hannaford brands in the U.S., is coming off a strong second quarter that saw group net sales increase 4.3% year-over-year and comparable sales excluding gas rise 3.6%.
Net consumer online sales improved 9.3% vs. Q2 2022 and the underlying operating margin was 4.1% with a modest decline in the U.S. Ecommerce penetration in the U.S. reached 8.1% during the first half of the year.
Ahold Delhaize now expects free cash flow in the range of $2.2 billion to $2.4 billion and is holding onto its 2023 projections of an underlying margin greater than 4%.
But success this year has gone beyond the numbers for Ahold Delhaize, and Supermarket News Senior Editor Bill Wilson was able to check in with company CEO Frans Muller to talk about everything from inflation to store operations.
In this episode you will hear about:
- Ahold Delhaize’s private label brand
- Muller’s take on inflation moving forward
- The store’s omnichannel strategy
- U.S. business outlook for the rest of 2023
- Labor challenges
- Sustainability
- Plans for store expansion and upgrades
Take a listen.
Are your shelves stocked? And if not, why not? That’s the question we’re exploring today with Greg Buzek of global research and advisory firm IHL Group, which just released new research around global retail sales.
In 2023, the total cost of inventory distortion is projected at $1.77 trillion, according to the IHL research — down $172 billion from 2022 with out-of-stocks accounting for $1.2 trillion and overstocks totaling $562 billion.
The study also looked at the true cost and experiences of consumers who reported the reasons they left stores without buying the items they planned to purchase.
According to the study, although consumers have seen improvements in on-shelf availability, they list various reasons for leaving without their items including: sizes not being available, lack of employee help, products locked up or in the stockroom, or empty shelves.
Take a listen.
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Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
Grocery food prices may have reached a tipping point. For the second straight month, the Consumer Price Index for food-to-home was relatively flat. However, shoppers are still paying 23% more on average per unit for food and beverage across the store.
Trips to the grocery store are on the rise, but the amount purchased with each trip has become smaller as shoppers continue to grapple with inflation.
In this episode of SN Off the Shelf, Supermarket News Senior Editor Bill Wilson talks with Jonna Parker, principal of the Fresh Foods Team Lead at Circana, about the inflation story over the last year.
In this episode you will learn:
- The latest data and trends about grocery prices and the impact at the grocery store
- The current trade efficiency from store promotions
- How current shopper behavior is affecting purchasing
- The influence of the “price cliff”
- Strategies grocers can implement for the rest of the year
Take a listen.
Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
Retail theft is on the rise across the country, and grocers are doing all they can to neutralize the threat.
However, in New York City, politicians are working to take away an important tool which grocers say deters crime — facial recognition software.
The New York City Council is currently considering a measure that would make it illegal to use facial recognition software within city limits. Grocers are fighting the move, saying that if the legislation becomes law, they will have to go back to taping up photos of repeat offenders near cash registers in the hopes a worker recognizes them when they enter the store.
Grocers say they also believe the rise in crime is putting their own workers in the line of fire. Many retailers depend on employees to either stop theft before it happens or get in the way of it while it is going on in the store. Some have used store design to prevent crime, like a Walgreens in Chicago that put most of its merchandise behind the counter. A Safeway just outside of San Francisco recently added security gates.
Avi Kaner is the co-owner of the Morton Williams supermarket chain in Manhattan. Kaner said he feels that small businesses cannot combat theft effectively without tools including facial recognition, adding that he personally hired off-duty New York police officers for the chains’ 16 locations, costing him over $1 million to curb shoplifting.
Supermarket News Senior Editor Bill Wilson caught up with Kaner and talked about the challenges he faces and his concerns around the potential loss of the software.
In this episode you will learn:
- The current efforts in the city to ban facial recognition technology
- Why some New York grocers are concerned about the potential loss of the tech
- How the Morton Williams supermarket chain currently deals with theft
Take a listen.
Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
The IDDBA show floor was busy at Anaheim, Calif. this year (attendance was way up according to show officials) and several vendors mentioned both “quality and quantity” among attendees — meaning lots of retail buyers.
The concept of “indulgence” was also going strong on the show floor. The message at IDDBA was that it’s okay for retailers to encourage a little indulgence among consumers, and it can be included in the overarching message around health.
Supermarket News Executive Editor Chloe Riley spoke with SN Contributor Mark Hamstra, for a breakdown of the trends he saw on the show floor at the recent IDDBA show in Anaheim, Calif.
In this episode, you’ll learn:
- Why the concept of “little indulgences”is still going strong among consumers
- Key challenges retailers face right now in the dairy-deli-bakery area
- Other trends still going strong in dairy, bakery, and deli
- Why grocers need to up their delivery game
- This was the first show with IDDBA’s new president and CEO, David Haaf: find out what his vision is like for IDDBA moving forward
Take a listen.
Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
A recent report indicates that some 80% of retailers said their ability to attract and retain workers has been challenged over the past year. In our recent SN Fresh Trends Survey, grocers also confirmed that labor continues to be a challenge.
Retail and grocery are asking associates to do more with less. The average store has 44-plus point solutions running the shopping experience; and disconnected solutions are guaranteed to make an associate’s job harder. Overworked, unhappy associates can easily lead to poor shopper experiences.
In this special edition of our SN Off the Shelf podcast — SN TechWire — SN spoke with Shamus Hines, CEO of Upshop, a tech firm focused on optimizing store operations, about how grocers can be leveraging tech to retain employees.
On today’s TechWire podcast, you’ll learn:
- Why institutional knowledge is being lost in the industry and what you can do to counteract that loss
- Why it matters to shift from a focus on “process improvement” to “people empowerment”
- How gamification can be an opportunity for success
- Tips for how grocers can get associates to lean into and embrace technology
Take a listen.
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Have a pitch for the podcast? Contact the SN staff at contactus@supermarketnews.com. And thanks for listening.
Grocery stores are using technology to reach out to shoppers on-site, and over the next couple of years the experience is expected to be completely different compared to how it is today.
In late May, Kroger announced it was expanding its retail media strategy with the addition of digital screens that facilitate video advertising across 500 stores.
Cara Pratt, senior vice president at Kroger Precision Marketing, said the screens will be integrated with the retailer’s 84.51 degrees data science platform “to create an engaging and valuable experience for our customers, associates, and brands.”
Earlier in the year, Cooler Screens conducted a survey that involved 3,750 brick-and-mortar shoppers on the effectiveness of in-store media and digital ads and found:
- 79% reported a positive impact on their shopping experience
- 82% found in-store digital ads memorable
- 56% made unplanned purchases prompted by the ads they saw
So where is this trend heading and how will grocers use the technology to reach customers effectively? Supermarket News Senior Editor Bill Wilson talked with Arsen Avakian, CEO of Cooler Screens, about the movement and where it is headed.
Take a listen.
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Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
Consumers are still crazy for candy. With household penetration at 88% in 2022, candy is still going strong (especially chocolate, which had a 56% share of sales in the category in 2022) — this according to a report from 210 Analytics.
Supermarket News Executive Editor Chloe Riley spoke with Anne-Marie Roerink, president of 210 Analytics, for a breakdown of the trends they both saw on the show floor at the recent Sweets and Snacks show at McCormick Place in Chicago.
Take a listen.
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Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. And thanks for listening.
When you beat Amazon at its own game, it’s big news. Supermarkets now have the stage, as a recent survey showed the group is a top performer in terms of online food shopping.
The Feedback Group, which provides actionable stakeholder feedback, conducted the research with 1,000 shoppers, asking them about their digital experience. Supermarkets topped the list with an impressive overall satisfaction rating of 4.40 on a five-point scale. Amazon followed closely behind with a score of 4.30, while mass retailers, primarily Walmart and Target, secured third place at 4.26. The research further indicated that value-oriented stores, such as Aldi, Lidl, and Grocery Outlet, achieved a rating of 4.11, followed by club stores at 3.99, and dollar stores rounded off the list with a 3.90 overall satisfaction score. Across all shoppers, the overall satisfaction score was 4.21.
Brian Numainville, a principal with the Feedback Group, saw it all coming. He said over the past few years supermarkets have invested a ton of money and time improving the ecommerce experience for shoppers, and the COVID-19 pandemic only put the strategy on high.
Supermarket News Senior Editor Bill Wilson talked to Numainville about the survey and how supermarkets can continue to improve in the digital sector, which caters to a young audience.
Take a listen.
Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. Thanks for listening.
It’s a hot time for the bots, digital and otherwise. In March, Instacart announced it would be adding OpenAI’s ChatGPT chatbot technology to its app, jumping on the bandwagon of many companies doing the same. Salt Lake City-based Associated Food Stores is now bringing AI robots into its distribution center, and SpartanNash is expanding the use of its autonomous inventory robot ‘Tally.’
ChatGPT and AI tech is almost everywhere you look in grocery. And the technologies aren’t cooling down anytime soon.
Supermarket News editor Chloe Riley spoke with Prashant Agrawal, CEO of the AI solution company Impact Analytics, to talk about the importance of AI (and the emerging importance of ChatGPT) in grocery.
In this episode, you’ll learn:
- How grocers be thinking about ChatGPT and how they can be regularly putting it to use
- Some of the pain points AI can help retailers solve
- How can AI help with inventory management
- AI and pricing — What assumptions are grocers making about their pricing and how AI aids with pricing strategies
- Whether AI is an available solution for independent grocers
- How we’re going to see the AI trend continue in 2023
Take a listen.
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Have a pitch for the podcast? Contact the SN team at contactus@supermarketnews.com. Thanks for listening.
As far as grocery goes, it’s all a go for delivery king Amazon.
Amazon, which has brick-and-mortar stores under the Whole Foods, Amazon Fresh and Amazon Go names, has made physical food stores one of the cornerstones of its corporate strategy in 2023. CEO Andy Jassy emphasized grocery during Amazon’s Q1 financial call in late April. During the meeting, he said Whole Foods Market continues to grow nicely and that there were a number of changes in the past year that have changed the profitability trajectory. As for Amazon Fresh, Jassy hopes the pause in establishing new brick-and-mortars will pay off down the line. The CEO said a set of experiments and concepts are being worked on across a number of stores and the hope is to continue with an expansion strategy.
According to Business Insider, analysts at Bernstein have put together a comeback strategy for Amazon in grocery and the main component is purchasing existing stores that are on the chopping block due to the proposed Kroger, Albertsons merger. The grocers are expected to shed up to 500 stores, and many are in areas that could be favorable for Amazon. The price to acquire is another selling point. Bernstein analysts also are proposing that Amazon quickly rebrand stores or focus on stores in targeted regions.
However, the waters continue to be rough. As noted earlier, Amazon has put a pause on constructing or opening brick-and-mortar grocery stores, and in Minneapolis the company announced it will be sub-leasing space that was originally marked as Amazon Fresh or Amazon Go stores. In addition, Whole Foods announced layoffs in April while Amazon restructures the organization.
So where exactly is Amazon heading with its grocery initiative? Supermarket News Senior Editor Bill Wilson talked to Jennifer Bartashus, senior analyst, Retail Staples and Packaged Food, for Bloomberg Intelligence about the road that lies ahead for Amazon grocery.
Take a listen.
Have a pitch for the podcast? Reach out at contactus@supermarketnews.com. Thanks for listening.
Joe Canfield just wants to let people in so they could see for themselves.
The opening of a Save A Lot in the Englewood neighborhood of Chicago has been on pause for months due to concerns from residents, and there are no signs Canfield, who is the CEO of Yellow Banana, which owns the store and is rehabbing the premises, will be able to make that one final, convincing point any time soon.
A Town Hall meeting was held on May 3, and shoppers in the neighborhood are still fired up over the decision to replace a Whole Foods with a Save A Lot at West 63rd and Halsted.
“We are new owners of Save A Lot and we’re more than willing to be judged on how we operate that store in Englewood,” Canfield said on the SN Off the Shelf podcast. “We just want to get the doors open to do it.
“We run a model by which we can deliver affordable, healthy, safe options to people,” he continued. “And we know they need it, we know they need our help and we want to open the doors and get that done.”
Canfield admits he is not sure how it “all went sideways.” The Yellow Banana team and Save A Lot (Saint Ann, Mo.) officials were getting ready to open the Englewood store earlier in the year, and on Jan. 10 a meeting took place with community leaders that had engaged with the new owners about the grocery shift. Protestors, however, prevented the store from officially starting the business, and that is when the community involvement pulled back.
“We kept reaching out, we kept asking for involvement,” remarked Canfield. “We did not get a lot of engagement from groups and we had to keep pressing forward because at some point you got to get the store open. You’re paying the electric bill and you got expenses and you’re bringing inventory in, and you have got to sell that inventory.
“So we’re really trying to look forward and not look backwards, and we are hopeful that we can get there pretty quick.”
But the situation has to be perfect, and all of the neighborhood concerns need to be addressed. As anxious as Canfield is to get the operation running, he knows exactly what lays in front of him.
“As of now we’re still voluntarily pausing to try to work through any open issues that folks have.”
Listen to this interview, which also includes questions about Yellow Banana’s $26.5 million deal to rehab a number of stores in Chicago, in its entirety.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
It’s no secret private label brands are experiencing a strong surge during these times of high food prices.
During the first three months of this year, store brands picked up right where they left off in 2022, with double-digit sales increases and greater market share in both dollars and units, according to nationwide data provided to PLMA by Circana (formerly IRI and NPD). The figures include 2023 food and non-food sales in all outlets as of March 26.
“The Q1 results are particularly impressive since they are compared to 2022 sales figures, which were historically high for U.S. store brands,” said PLMA President Peggy Davies.
But how long will this growth continue? In this episode of SN Off the Shelf, Senior Editor Bill Wilson talks with Tom Prendergast, who is the director of Research Services for PLMA, about the current rise in private labels and if it is sustainable beyond inflation.
Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach outand say hi on LinkedIn. Thanks for listening.
Thrive Market, headquartered in Los Angeles, is a mission-driven grocery store, and it truly has boots on the ground. The natural and organic market is TRUE certified for zero waste and also is climate-neutral certified. For every paid membership a portion is donated to families who cannot afford healthy food, those in the military and to emergency responders.
Thrive Market has reduced plastic use by 70%, and the suppliers and vendors it works with also have done their part in reducing plastic use, and so far in 2023 the company is experiencing double-digit growth, and is even setting records in some categories.
Bill Wilson, senior editor for Supermarket News, talked to Jeremiah McElwee, Chief Marketing Officer for Thrive Market, about the mission of Thrive Market and how it has navigated through the COVID-19 pandemic and the current era of inflation.
Take a listen.
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Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach outand say hi on LinkedIn. Thanks for listening.
According to research by Incisiv, in collaboration with The Food Industry Association (FMI) and in partnership with Loyal Guru, 74% of grocers believe digital shopping has made customers less loyal.
That is a troubling stat, especially during the high heat of inflation where price has become critical. The report, “Shopper Loyalty in the Digital Age,” looks at the importance of offering a seamless omnichannel experience for shoppers to foster loyalty, including providing a well-designed digital platform, integrating with digital channels, and offering personalized experiences.
Key take-aways from the report include:
- 74% of grocers believe that digital shopping has made shoppers less loyal
- 88% believe that a poor third-party experience negatively impacts shopper loyalty
- 76% of grocers believe that a poor web and mobile experience reduces shopper loyalty
Supermarket News Senior Editor Bill Wilson talked with Doug Baker, vice president, Industry Relations at FMI, about digital’s takeover among consumers as well as what grocers can do to bring the customer loyalty back to where it was before the technology takeover.
Take a listen.
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Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
Some stats from the recent “Power of Meat” report from analytics firm 210 Analytics:
With $87.1 billion in annual sales, 98.3% household penetration and nearly 50 shopping trips per year, meat is the most powerful of the perimeter departments. Sales reached another record, up 5.7% versus a year ago and retailers continued to move more pounds than they did prior to the pandemic. Beef is the biggest seller in fresh, followed by chicken. In processed, bacon and pre-packaged lunch meat are the top movers.
Meat is hot. Case ready is on the rise, and 87% of home-prepared dinners (still very much a trend) contain a portion of meat or poultry. Shoppers are hungry for meat, and grocers who are smart about tapping into that hunger and optimizing their offers in this category are sure to benefit from a sales perspective.
Other trend highlights from Power of Meat:
- Meat department sales and engagement remained strong in 2022. With $87.1 billion in sales, 98.3% household penetration and 50 shopping trips per year, meat is the most powerful of the fresh departments. Sales grew 5.7% vs. 2021 and pound sales remained above pre-pandemic levels (IRI).
- Shifts in channel choices are prompting changes in the meat/poultry dollar distribution. Demographic and inflationary forces have resulted in a loss of share for traditional grocery from 42.8% of meat and poultry sales in 2019 to 40.3% in 2022 (IRI) — a shift of several billions of dollars. Supercenters, clubs and online outlets, all over indexing for Millennials, gained in share. Online meat sales grew on better conversion and more frequent orders.
- A strong meat department reputation helps drive traffic for the entire store. Price, location and assortment dominate the grocery store choice, with meat being the most influential department. Prices, quality and reputation decide where people buy most of their meat/poultry. A strong meat reputation is driven by freshness and quality of the product itself, a clean and well-stocked department with good prices and service excellence.
Supermarket News spoke with Anne-Marie Roerink, president of 210 Analytics, for a breakdown of Power of Meat, as well as another recent monthly meat report from the firm, in addition to looking ahead at trends and predicted growth for meat in 2023.
Take a listen.
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Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
More food is fulfilling its life’s mission these days. Dealing with food waste is a top priority among grocery retailers, so instead of just dumping produce into a landfill the process has become more detailed and complex. However, the end result remains the same: To nourish as many as possible.
Earlier this year a group of food waste experts gathered at the 2023 Southeast Produce Council’s 2023 Southern Exposure event to talk about the issue and share strategies. Justin LaCroix, director of sustainable operations and brand lead for health and sustainability at Ahold Delhaize USA, was on the panel and shared some of the things his company was doing to cut down on the waste.
Ahold Delhaize is part of the 10x20x30 initiative which features 10 of the world’s biggest food retailers. The power grocers are engaging with 20 of their priority suppliers to cut the amount of food waste in half over the next seven years. Ahold Delhaize wants to cut food waste by 32% at its stores by 2025 and 50% by 2030. To help do this, the company is launching a HowGood label program to provide product sustainability ratings, and the retailer also wants to advance traceability.
It's not a simple pivot. For example, a produce manager on the store floor needs to engage in constantly rotating items like plums and tangerines with the goal of selling as much as possible on a daily basis. Then at the end of the day a determination needs to be made as to where food past their sell date could be most useful. The tasks demand constant attention and action.
In this episode of SN Off the Shelf, LaCroix talks with Supermarket News Senior Editor Bill Wilson on the goals of food waste moving forward and greener practices that can be done at the market.
ChatGPT. Instacart is planning to add the tech to its app later this year, and a majority of grocers recently indicated that they also plan to test an AI or ChatGPT solution in 2023. Are you one of those?
In this special live edition of SN Off the Shelf, Supermarket News editors Chloe Riley and Bill Wilson talk about the real-life uses of ChatGPT in grocery, as well as Instacart’s plan for the tech. (Plus a bonus segment on “The Dollar Store Invasion” — a new study which shows how dollar establishments are levying a heavy toll on communities.) Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
In a scathing new study, dollar discount stores like Dollar Tree and Dollar General are accused of being harmful to the local environment.
Titled the Dollar Store Invasion, which was released by the Institute for Local Self-Reliance (ILSR), the study shows how dollar establishments (more than 34,000 in the U.S.) are levying a heavy toll on local communities, especially those of race. The negative impact is so great that at least 75 cities and towns have successfully blocked new store projects since 2019, and the ISLR is calling for more anti-trust regulation.
Supermarket News Senior Editor Bill Wilson sat down with one of the co-authors of the report, ISLR Senior Researcher Kennedy Smith, and dove deeper into these accusations in the latest episode of the SN Off the Shelf podcast. Have a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
What does the omnichannel customer look like? Well, according to a recent report: This person is more likely to be a Millennial, they have children, and they’re very interested in natural and organic offerings.
And that’s just to start. Why should you care about the omnichannel shopper? You should care because these consumers, shoppers who buy groceries both online and in-store, are on the rise and have the potential to be strong sales opportunities for supermarket operators.
In this special edition of our SN Off the Shelf podcast — SN TechWire — SN spoke with Brian Wynne, CEO of the newly rebranded marketing firm Acosta Group about strategies to navigate competition at the shelf and the evolving customer journey. Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
The annual National Grocers Association show just ran from Feb. 26-March 1 in Las Vegas, and the show was the best attended since 2017, according to NGA CEO and President Greg Ferrera. There were plenty of vendors, plenty of retailers, and a buzzy energy throughout the whole show.
Hot topics included Inflation, what retailers can be doing to recapture stomach share from restaurants, and retention, retention, retention. Workers are looking for purpose, and, the consensus at the show was — grocers have to help drive home the narrative of the “why” of what they do, not just the “what” or “how.”
There were also lots of nifty tech innovations on the show floor: here’s a look at 5 of the coolest we saw.
Supermarket News Senior Editor Bill Wilson tuned in with Executive Editor Chloe Riley live from the National Grocers Association show. Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
Deloitte released its 2023 consumer products industry outlook, which looks at labor, supply chain, inflation — and how all of the above are affecting consumer perception of retail value.
SN sat down with Nick Handrinos, vice chairman and leader of Deloitte LLP’s retail and consumer products, to break down the data: what it means, and how retailers should be thinking about and approaching consumers in the year ahead.
Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
Amazon recently announced that it’s halting the rollout of its Amazon Fresh retail stores while it re-evaluates the concept’s economics. In a recent fourth-quarter conference call with analysts, Amazon president and CEO Andrew Jassy said:
“We’re doing a fair bit of experimentation today in those stores to try to find a format that we think resonates with customers.”
It remains to be seen exactly what that format will look like.
Supermarket News contributor Diana Blass did a deep dive with SN Executive Editor Chloe Riley on what’s been working for Amazon in grocery (as well as what hasn’t), in addition to where things are headed. We take a look at:
- What’s holding back Amazon’s growth in the grocery space
- Amazon’s retail competition when it comes to technology
- And what the path forward for Amazon Fresh may be
Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
Ongoing challenges in a tight labor market have been forcing supermarket retailers to rethink their strategies around recruiting and retention, as well as their overall standard operating procedures, in an effort to keep rising labor costs in check.
So what’s a grocer to do? Mike Cook, aka “Grocery Store Mike,” has some thoughts.
“I think it’s going to continue being a challenge,” he said of hiring grocery workers. “I talk to retailers every day — it doesn’t matter the size of their organization. They have one thing in common and that’s the need for top talent.”
Cook, who has over 35 years in the grocery industry, started as a part-time courtesy clerk, and worked his way up to serve in-store leadership positions with both traditional and specialty food formats. He now specializes in hiring, training, and developing company leaders for both small and large grocery store operations.
Supermarket News spoke with Cook, an executive recruiter for grocery retail at Frontline Source Group, to talk about hiring, retention, and managing your ecommerce labor strategy.
Take a listen.
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Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
Retail deli prepared seafood, and to-go meals made with seafood are both potential areas of growth for 2023 — so says a new report from market research firm 210 Analytics.
Last year saw an 11.9% sales increase in deli and prepared foods vs. 2021. Consumers are hungry for protein variety and seafood is a great, higher-margin way to service that need, according to the report, “Seafood at Retail Q4 and YE 2022.”
Consumers are also generally seeking value from grocery, a trend that’s translating in an even bigger way for seafood.
Other growth trend highlights from the report:
- Inflationary pressure is real: promote where possible: Keep comparing to the 2019 pre pandemic normal to understand where demand sits relative to “normal”
- It’s not just about price, it’s about value: Try to match the shoppers’ value, whether in species, pack size or meal deals, but premiumization also remains an opportunity
- It’s a balancing act between convenience and value: While value matters, shoppers are also out of time and energy to cook
- There’s a continued interplay between retail and restaurants: Restaurant trips are pressured once more and shifting to QSRs. Retail can step in as the premium meal
- It’s fresh and frozen, not fresh or frozen: Shoppers are switching back and forth between fresh and frozen, but the latter is popular in all categories
Supermarket News spoke with Anne-Marie Roerink, president of 210 Analytics, for a breakdown of the report, as well as a look at trends and predicted growth for seafood in 2023.
Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
The supermarket sector’s growth leaders in 2022 were Aldi, H-E-B, Publix, and Grocery Outlet, according to a new report from professional services firm JLL.
Last year, Aldi added 49 stores, totaling nearly 804,000 square feet of new space, while San Antonio-based H-E-B, added 12 new stores last year for a total of 1.2 million square feet. Publix and Grocery Outlet also saw significant growth.
Supermarket News spoke with James Cook — Americas Director of Retail Research for JLL, and also host of the weekly podcast “Where We Buy,” which covers retail and real estate, as well as the host of the video show “Everything We Know About Retail” — for a breakdown of the report, as well as a look at trends in grocery store growth.
We also take a look at:
- The rise of smaller-format store concepts
- Private label growth
- E-commerce
- And grocery-anchored investment sales
Take a listen!
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks so much for listening.
The past few months have seen grocery foodservice endeavors ramping up. Hy-Vee, for example, first had a partnership with Wahlburgers in 2017 to open dozens of locations of that burger brand, including freestanding units.
Now this week, the company said that any Wahlburgers restaurant locations it opens moving forward would be inside its stores exclusively, saying, quote: “With the changing nature of the restaurant business combined with staffing challenges, we are evolving our strategy when it comes to standalone Wahlburgers restaurant locations.”
And it’s not it’s not just Hy-Vee. Other grocery chains are expanding their in-store branded restaurant locations.
Kroger has been rapidly rolling out Mix Food Halls, operated by Kitchen United, in its stores, featuring several well-known restaurant brands. These include Fuku Fried Chicken, Wow Bao, Genghis Grill, Hardee’s, Pei Wei Asian Kitchen, Nékter Juice Bar, Nathan’s Famous, Saladworks, Wing Zone, Capriotti’s Sandwich Shop and Dickey’s Barbecue Pit. And a whole bunch more.
H-E-B has also been expanding its own-brand in-store restaurants, including South Flo Pizza and True Texas BBQ, which was actually recently named the best chain barbecue restaurant by Texas Monthly. H-E-B said it’s going to include both those concepts in a new, two-story, 97,00-square-foot supermarket in Lake Austin, Texas, along with, what else: a coffee shop that offers breakfast tacos and a full bar.
The Fresh Market also had an interesting foodservice-adjacent moment: rolling out a shoppable livestream cooking show promoting their Valentine's Day offerings.
Supermarket News tuned in with our sister publication Nation’s Restaurant News to see what the restaurant world makes of all this grocery restaurant business.
Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
It was a mixed bag in 2022, but overall, the stock prices of publicly traded food retailers outperformed the market.
Many grocery stocks started the year strong, but as inflation ramped up quickly in the first half of the year — and the economic outlook became gloomier amid rising interest rates and the fear of a possible recession — several companies’ stock prices faltered.
Take Kroger for instance. In a year that saw the Dow Jones Industrial Average fall 8.9%, the S&P 500 lose 19.4% and the NASDAQ tumble 33.1%, even a flat performance by Kroger Co. could be considered a win for investors, however.
Some analysts believe Kroger is well-positioned for the year ahead, however, given its strong private label offering, its focus on fresh foods, and its data analytics capabilities.
SN spoke with Scott Mushkin, founder and CEO of R5 Capital, about what the trend in grocery stocks means, and where it’s pointing us in 2023.
Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
Deloitte just released its 2023 consumer outlook, and the report kicks off with a great question:
Was this a good year or bad year for the industry?
In many ways, it’s been both, depending on how you’re holding the glass, and your definition of full. Inflation has meant high prices, but it’s also meant consumers trading down to private label and a loss of brand loyalty.
According to Deloitte’s outlook data: Consumer products executives surveyed also feel conflicted about the year ahead. On the one hand, they are negative about the macro environment, with eight of 10 respondents saying they are neutral or leaning pessimistic about the global economy and geopolitical stability.
But when it comes to their own companies? Three in four are optimistic about their company’s performance (74%) and its strategy (80%).
Some of the biggest challenges of the past year include labor, supply chain, and inflation, and Deloitte’s report touches on all three. Some 62% of respondents expect that supply chain issues will still be a big challenge in 2023, and last year set the record for higher CPG prices. Where does that leave us for the year ahead? Will consumers continue to pay higher prices?
Supermarket News spoke with Nick Handrinos, vice chairman and leader of Deloitte LLP’s retail and consumer products, about what both retail executives (and consumers) expect to see in the year ahead.
Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
Stomach share. It’s on everyone’s minds right now as inflationary prices affect both restaurants, and increasingly grocery, with consumers trading down to private label and brand loyalty being sacrificed for cost savings.
One of those hot spaces of competition between both restaurants and grocery? Catering. An area which represents one of the highest margin categories for grocers.
According to a report from market research company Research And Markets, the global contract catering market size reached $232.7 billion in 2021. Looking forward, the market is expected to expand to $318.5 Billion by 2027.
And supermarkets are poised to capture this share. According to recent research from FMI, deli prepared foods sales are up 9.3% year over year and 19.2% from the pre-pandemic 2019 period. That same research also indicates that 21% of polled shoppers say they prepare seven or more dinners at home per week, up from 16% in 2021, which includes food made at home, semi- or fully prepared items and leftovers.
Supermarket delis have also seen a spike in meal kit sales since the early days of the pandemic, and now recent data from Statista indicates that the U.S. market will exceed more than $10 billion by 2024, compared to just $6.9 billion in 2021.
Supermarket News spoke with Matt Pavich, general manager of Order Ahead at Instacart, to talk catering, convenience, and how grocers can optimize stomach share.
Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
We’re talking inflation. Consumer Price Index data was just released for November, and we’re seeing food-at-home price increases really, largely driven by increases in four of the six major grocery store food group indexes: fruits and vegetables (up 1.4%); cereals and bakery products (up 1.1%); dairy and related products (up 1%), and nonalcoholic beverages (up 0.7%)
Even though the index for meats, poultry, fish, and eggs fell slightly (0.2%) in November, our own recent poll around inflation category pain found overwhelmingly that it's higher ticket meats that are still hurting retailers. A dairy clerk from Hy-Vee also commented saying that egg prices have been “ridiculous.”
So how have retailers been responding to inflation and inventory mismatch from a pricing perspective?
Supermarket News tuned in with Matt Pavich, senior director of retail innovation at Revionics, an AI-driven price optimization solutions company, to talk pricing strategy, price perception, and how retailers can be optimizing their efforts. Pavich is also a former merch buyer for Target.
It’s that time of the year: there’s been a flurry of Q3 results and some interesting ones in particular. Supply chain challenges are pressuring profitability for Dollar General, and have caused the company to reduce its earnings outlook for the full fiscal year.
Meanwhile, inflation has become a two-edged sword for Dollar Tree, as consumers seeking bargains are driving sales and profit growth but rising costs and a shift toward lower-margin consumable items are expected to pressure margins in the near term.
Moving over to Kroger, the company saw its sales surge in its fiscal third quarter, driven by same-store sales gains of 6.9% vs. a year ago, excluding fuel, and double-digit increases in both private label and digital sales.
Kroger also said its fourth-quarter sales and profit comparisons will be up against high inflation in last year’s fourth quarter.
Supermarket News spoke with SN contributor Mark Hamstra about what the results mean for retail, and what we can expect looking ahead.
Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks for listening.
Members of several locals of the United Food and Commercial Workers union said the proposed Kroger-Albertsons merger could cost thousands of supermarket workers their jobs.
In a press conference ahead of a Senate hearing about the merger, several store-level workers detailed their past experiences with industry consolidation—including the impact of the 2015 Albertsons-Safeway merger—and their concerns about the impact of the pending deal.
Supermarket News spoke with Jonathan Williams, communications director for United Food and Commercial Workers Local 400, about the details of those concerns—as well as what lies ahead.
Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks very much for listening.
People gotta eat. And for some time now, since pandemic days, that need has been trending towards at home eating—via cooking, meal kits, and grab and go items.
According to recent research from FMI, deli prepared foods sales are up 9.3% year over year and 19.2% from the pre-pandemic 2019 period. That same research also indicates that 21% of polled shoppers say they prepare seven or more dinners at home per week, up from 16% in 2021, which includes food made at home, semi- or fully prepared items and leftovers.
Meal kits have also been in demand. Supermarket delis have seen a spike in meal kit sales since the early days of the pandemic, and now recent data from Statista indicates that the U.S. market will exceed more than $10 billion by 2024, compared to just $6.9 billion in 2021.
All this to say: People are cooking and eating at home. Supermarket News tuned in with our sister publication Nation’s Restaurant News to see what restaurateurs make of the trend towards eating at home, as well as what’s doing in food service at retail.
Take a listen.
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks so much for listening.
Online grocery expanded at a 4% rate in Q3, and grocery / meal kit delivery service Hungryroot saw growth almost 12 times as fast, with 45% year-over-year growth for its most recent quarter. Since launching in 2015, the personalized online grocery service has since seen great success via leaning into AI-powered personalization. SN sat down with Hungryroot Chief Digital Officer Alex Weinstein to talk about the company's strategy. Take a listen.
In this episode, you’ll find out:
- What AI-powered personalization looks like, and why “feedback-focused” approaches to personalization that can create a profoundly better consumer experience
- How Hungryroot sees itself in synergy with traditional grocery
- What learns grocery can be taking away from Hungryroot’s model
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks so much for listening.
The recently announced Kroger-Albertsons merger deal reflects the ongoing drive for scale in the grocery industry. But when it comes to retailer relationships with consumer packaged goods (CPG) suppliers, scale doesn’t mean everything, especially in the small- and midsize-business (SMB) arena.
That’s where mid-tier grocers are particularly important. According to Andrew Criezis, senior vice president and general manager of SMB at market researcher NielsenIQ, mid-level grocery retailers bring more to the table than meets the eye.
“When we talk about mid-tier grocers, the key is they’re regionally focused,” he told Supermarket News in a podcast interview, citing retailers such as Hy-Vee, Good Food Holdings and The Fresh Market as examples. “And I think there are some pretty interesting insights here.”
Even when SMB CPG manufacturers do break into the assortments at big chain retailers, the bulk of their sales volume — especially in grocery — still may come from mid-tier stores, Criezis explained. These brands’ deepest and most loyal consumer relationships also may be found in this retail segment.
“We ran a global survey and analysis called the ‘2022 Brand Balancing Act,’ which was laser-focused on SMB consumers and the market around the SMB segment of emerging brands. And what we discovered is that shoppers associate small and emerging brands as being local,” Criezis said. “There’s a very close connection to it, a high-percentage relationship.”
Regional and smaller grocers with loyal customer bases stand as bread-and-butter sales channels for SMB brands as well as destinations for positive consumer-brand interactions, Criezis noted. These stores also may offer brands high visit frequency and generate among their largest average basket sizes.
“We see more and more of these brands that are local, and consumers looking for local and engaging in smaller-format stores. And they expect to find those more local, niche brands within some of these regional, mid-tier grocery players,” he said. “So that’s where you see this strong connection that can breed a strong sales position if you play the structure and the cards correctly. The other thing we found out was that a quarter of our survey respondents buy emerging brands exclusively at independent retailers. So a pretty significant amount of emerging-brand consumers are going to these independent retailers or regional players
It’s been just over ten days since Kroger and Albertsons announced they would merge in a $24.6 billion dollar deal, and the grocery industry has been reeling ever since.
A brief rundown of the numbers: If it goes through, the deal will join the first-and second-largest U.S. supermarket retailers, creating a national company with almost 5,000 stores, 66 distribution centers, 52 manufacturing plants, 2,015 fuel centers and over 710,000 associates across 48 states and the District of Columbia. The merged entity also would be the fifth-largest retail pharmacy operator, with close to 4,000 pharmacy locations.
In this special live edition of SN Off the Shelf, Supermarket News editors Chloe Riley and Russell Redman talk about how the merger could affect Kroger’s Ocado rollout, the impending U.S. Senate hearing, and additionally, whether a deal this big will even make it past regulators. Take a listen.
In this episode, you’ll find out:
- Some of the ways independent grocers would be affected if the merger goes through
- How the deal could shift grocery market share among the top players
- Whether we’re going to see this deal trigger other grocery retail M&A deals and drive more brick-and-mortar consolidation in the industry
Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn. Thanks so much for listening.
The quality of fresh food, especially produce, plays a big role in consumer decision-making on where to shop for groceries. Retailers that consistently serve up a strong offering of fruit and vegetables at a high level of freshness will consistently draw customers and earn their loyalty.
United Natural Foods Inc. (UNFI) knows this as well as anyone in the industry and, to that end, launched initiatives in which it leveraged new technology to ensure produce reaches retailer partners faster and fresher.
A combination of new solutions and processes are shortening certain delivery times by more than a day and capitalizing on the full potential of UNFI’s data points to deliver fresher produce to stores. One key tech solution is Share-ify, a cloud-based, tablet-enabled quality control program that allows UNFI to synthesize tens of thousands of data points to remove variability and help growers and suppliers provide the freshest produce possible. The technology was slated to be in use at all of UNFI’s produce distribution centers as of last month.
The Providence, R.I.-based wholesaler also has consolidated purchasing and shifted to procuring many items directly from key suppliers.
The result of these efforts: improved inventory turnover, lower inventory shrink and an average one-day savings from the supply chain over the past year — as well as produce sales growth outpacing the industry average.
“As you can imagine, there’s not one, single bullet on how to make quality better. So the reality is that we put in multiple tools,” Dorn Wenninger, senior vice president of produce at UNFI, told Supermarket News in a podcast discussion.
Wenninger has served in that role at UNFI since February 2021, when he joined the company from Walmart Mexico, where he was VP of perishables. Before that, he served for four years as VP of produce and floral at Walmart U.S. and, earlier, spent two years there as VP of global food sourcing.
“The retail consumer, what she really cares about, is the quality and freshness and how long it lasts at home. And what really upsets her is variability,” Wenninger said. “So we started there and said, ‘What tools do we have in our arsenal to make that better for the customer?’ The overall ranking objective was to remove days in the supply chain and give those days of freshness back to the store and back to the customer.”
FreshDirect, one of the trailblazers in the online grocery space, has begun a new chapter as part of Ahold Delhaize USA.
Though retaining its strong reputation for delivery of high-quality fresh foods and other groceries — and marking its 20th year in business this year — FreshDirect has sharpened its focus on its hometown metropolitan New York market, including not just the greater New York City area but also parts of New Jersey and Connecticut. The move comes after the pure-play e-grocer shut down delivery service to the Philadelphia and Washington, D.C., markets at the end of August.
FreshDirect’s service change comes as it further integrates with Ahold Delhaize USA, which acquired the company in January 2021. To that end, FreshDirect has partnered with supermarket chain Stop & Shop to help create an “omnichannel ecosystem” that brings more convenience, personalization and value to customers via brick-and-mortar and digital channels.
The ecosystem concept is designed to capitalize on densely populated markets like New York City, where FreshDirect operates from a 400,000-square-foot automated fulfillment center and campus in the borough of the Bronx. And FreshDirect Managing Director Dave Bass sees the online grocer’s current value proposition as a key differentiator.
“When I think about FreshDirect, there are really three key areas that we focus on,” Bass told Supermarket News in a podcast interview. “One is that we deliver the highest-quality and freshest food, and the second is that we create food experiences. And then the third is that we drive simple, healthy solutions to make every day better for our customers. We take, very much, a customer-first approach to understand what our customers needs are.”
Bass has led FreshDirect as managing director since September 2021. He previously served as senior vice president of omnichannel merchandising support at Peapod Digital Labs, Ahold Delhaize USA’s digital innovation arm.
“ADUSA is set up in a unique way, where they look at the [grocery retail] brands as being particularly local and focused on that local customer to win. At the same time, there’s a good-size company behind us that we can leverage for synergies and savings that in some ways the customers may not see and in some ways maybe they do,” he said. “But it has been a great first year for me here, and I’m really excited about the future potential growth for FreshDirect in the tristate market.”
Wellness. It’s a much-used buzzword these days, but with good reason, according to Leslie Waller, vice president of marketing at Campbell Soup Company. Supermarket News met up with Waller at the recent Groceryshop convention to talk with her about how Campbell’s strategy around wellness has evolved, in addition to what consumers are searching for online in this category.
In this episode, you’ll find out:
- The importance of omnichannel and the digital shelf
- What generations are most interested in wellness as a concept (according to Campbell)
- What wellness search terms Campbell is paying attention to
Contact Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn.
This week on SN Off the Shelf, a Supermarket News podcast, SN editors Chloe Riley and Russell Redman discuss two top stories from the week: 1. Grocery pricing was still high in August, even despite relaxed inflation and 2. Instacart’s making a lot of moves as it gears up for an anticipated IPO — including partnering with the musician Lizzo. Here’s why it matters to grocery.
In this episode, you’ll find out:
- Tangible ways stores can be alleviating price pain for consumers
- Takeaways for grocery around the launch of Instacart’s Carts feature
- Details around the debut of a new weekly SN news roundup, “5 things”
- Sign up for our daily newsletter to get “5 things” delivered to your inbox every Friday
You can contact SN Executive Editor Chloe Riley at chloe.riley@informa.com (or reach out and say hi on LinkedIn), and likewise, say hi to SN Managing Editor Russ Redman at russell.redman@informa.com. Thanks for listening.
In driving its “lead with fresh, accelerate with digital” strategy, The Kroger Co. — the Supermarket News 2022 Retailer of the Year — aims to build a seamless ecosystem in which customers can move easily between channels and get the same high-quality experience. That includes shifting between brick-and-mortar stores and digital, and among in-store shopping, pickup and delivery.
“Our aspiration is to be the destination for our customers for their food needs,” Yael Cosset, senior vice president and chief information officer at Cincinnati-based Kroger, told SN in a podcast discussion. “At the heart of our vision for a seamless ecosystem is the precise understanding of our customers.”
Unsurprisingly, technology is playing a central role. On the e-commerce side, Kroger has opened six customer fulfillment centers (CFCs) and nine supporting “spoke” facilities under its more than four-year-old partnership with Ocado Group. These high-tech facilities use Ocado’s automation and artificial intelligence technology to fill online grocery delivery orders, including in markets where Kroger doesn’t have physical stores.
But that’s not all. Kroger, which serves more than 60 million households annually, is leveraging the vast stores of data from across its physical and virtual properties and brands to create more personalized experiences and value for customers. The company also is using tech-based solutions and its data and analytics capabilities, for example, to hone its supply chain to improve product freshness, expedite pickup and delivery service, and introduce new, on-trend items in its Our Brands portfolio.
According to Cosset, Kroger is seizing “the opportunity to leverage data to really understand what matters to every single customer — what they want, from the freshest product for a simple meal they cook at home to a quality fresh meal solution when they’re on the go; when they want it, whether they’re doing their weekly shop or looking for an immediate solution delivered to them in 30 minutes; and also how they want it. Do they want to go to the store, pick it up or get it delivered to their home? All of this without having to compromise on the freshness, quality or value they get from Kroger.”
Overall, The Kroger Co. operates 2,723 supermarkets and multi-department stores under more than 20 banners. More than 2,250 stores have pharmacies, and over 1,600 have fuel centers. Eighty-two percent of Kroger’s customers within five miles of one of its stores, with most living within two miles.
On the digital side, as of the fiscal 2021 year-end, 2,257 stores provided online grocery pickup, and over 2,500 stores offered delivery. Including click-and-collect and delivery via Kroger Delivery, third-party partners such as Instacart and Kroger’s Ship direct-to-home service, the company covered 98% of households in its trade area with e-commerce services. Digital represents a more than $10 billion annual business for Kroger. About 18.5 million households engaged online with the retailer in 2021.
“Our seamless ecosystem is about bringing all of our assets together — our stores, our dedicated facilities, leveraging technology, our partners, petabytes of data about customer preferences — ultimately to bring that seamless experience to life to fit the context of your day, your need,” Cosset said. “So data and technology is present across the entire ecosystem.”
Inflation is a major concern for Americans, according to recent survey data, and it’s starting to affect their grocery shopping habits.
Some 76% of U.S. consumers say their food buying habits have shifted, and nearly half (45%) feel like they can’t afford their previous lifestyle, according to data from advertising technology company NCSolutions.
We sat down with the CEO of NCSolutions, Alan Miles, to drill down into just how deeply inflation is affecting consumer habits, and additionally: what the grocery industry can be doing about it.
In this episode, you’ll find out:
- The risks (and opportunities) that come with shifting consumer purchasing habits due to inflation
- Which products have seen the highest percentage increases
- Why marketing can be your friend when it comes to communicating brand value
Contact Chloe Riley at chloe.riley@informa.com, or reach out and say hi on LinkedIn.
Amid the expanding use of digital channels and the rise of omnichannel shopping, CPG brands are looking to connect with consumers in new ways and measure those interactions.
To that end, Dollar General last month announced what it called an “evolution” in its media platform, DG Media Network (DGMN). The Goodlettsville, Tenn.-based discount store giant launched DGMN in 2018.
“DG Media Network is here to deliver our brand partners an up-close and personal view of the Dollar General customer in a way that really no one else can,” Charlene Charles, head of DG Media Network operations, said in a podcast interview with Supermarket News. “We do this by creating more meaningful intersections between our partners and customers — essentially making it easier to reach the hard-to-reach and hard-to-measure [consumers] with the brands and products they want and need.”
Dollar General said the DGMN upgrade includes a spate of new advertising partners from major CPG companies — Unilever, General Mills, Hershey’s and Colgate-Palmolive, to name a few — plus new strategic partners to expand DGMN’s technology, analytics and media capabilities.
Dollar General certainly has a lot to offer CPG brands, with nearly 18,400 stores in 47 states. The chain noted that three-quarters of its stores serve markets of 20,000 people or fewer, a segment of customers often overlooked under current media strategies. The retailer’s mobile app also has 4 million monthly active users.
“We very much pride ourselves in the fact that we can reach more than 90% of our active DG customers through paid media,” Charles said. “Building on that, we have speed in our reporting through a self-service dashboard showing near-time real attributable sales, and we’re focusing on striving to provide measurement to demonstrate performance for every dollar in and dollar out.”
The number of online grocery operators — especially those offering rapid delivery — has proliferated over the past few years, driven most recently by the explosion in e-grocery demand amid the pandemic.
But online grocer Farmstead brings a different model to the table with its “farm to fridge” approach.
Leveraging artificial intelligence technology, Burlingame, Calif.-based Farmstead said it has “reinvented the grocery buying experience” and “rewired how food moves across the country” to make locally sourced food more accessible and reduce food waste. The company, founded in 2016, started off in the San Francisco Bay Area and last year entered Raleigh-Durham, N.C., and Miami following a late 2020 launch in Charlotte, N.C.
Farmstead launched in Chicago this past February and said it aims to expand nationwide and serve a primarily suburban, midmarket customer base.
“We are live in five markets right now. We started in the Bay Area, a first-tier market, and then we went to Charlotte and Raleigh to explore how the model would change or not change in markets that were a lot smaller than the Bay Area. Then we went back to bigger cities, in Miami and Chicago,” Pradeep Elankumaran, co-founder and CEO of Farmstead, told Supermarket News in a podcast interview. “Upcoming markets, a lot of it is still confidential, but we’re looking to open in another eight to 10 markets very rapidly.”
Farmstead also licenses its Grocery OS technology stack to other retailers, providing a turnkey solution for getting a dark-store delivery operation up and running in several weeks, from securing commercial real estate space to inventory sourcing to delivery service. The e-grocer focuses on one- to two-hour free delivery and serving consumers across a large radius, generally 50 miles, which the company said helps eliminate food deserts while offering better prices than local supermarkets. In addition, the efficiencies of the Farmstead model are aimed at helping users of its solution reach per-market profitability faster.
“We realized the tech stack that powers our own operations is very relevant for folks operating out of stores or big FCs [fulfillment centers], as well as smaller FCs,” Elankumaran said. “It’s easy to find a pick-and-pack solution, it’s easy to find a delivery solution and it’s easy to find an inventory control solution. But when you’re delivering every single day, and you have to deliver within a few hours of when the customer places the order, the way all of these pieces fit together winds up mattering a lot more than any particular part of the solution.”
Two years into the pandemic, high demand, supply shortages and inflation make every day an adventure for the online meat retailer
Online bulk-products retailer Boxed Inc., which went public in December, is taking a two-pronged approach to growth, covering both retail and technology.
New York-based Boxed provides warehouse club-style shopping — including groceries, pantry items, household staples, HBA, office supplies, and organic and green products — through its website and mobile app. Consumers and businesses can buy club-sized packages with free two-day delivery in the continental U.S. on purchases of over $49, without the membership fees of traditional warehouse clubs. Members of the BoxedUp loyalty program get free shipping for a $19.98 order minimum.
The company also offers Boxed Express, an on-demand delivery service for perishables, and in late 2021, entered the rapid grocery delivery arena via its first acquisition: New York City e-grocer MaxDelivery.
“Boxed was private for almost nine years. So now, as we go public in a great way, I’m invigorated and recharged because I’m learning something new every single day now,” Boxed CEO Chieh Huang told Supermarket News in a podcast interview at the recent FMI Midwinter Conference in Orlando, Fla. “For the growth prospects of the company, it’s really impactful. As of our last earnings call at the end of last year, we had $105 million in cash. So being able to invest in growth, not only on the e-commerce side but also on the software side, I think is the biggest impact of the IPO.
As part of its plan to go public, Boxed has launched a new income stream by licensing its end-to-end e-commerce platform as a software-as-a-service (SaaS) offering. The technology includes customer-facing front-end and back-end operational software plus homegrown automation robotics for fulfillment. In reporting fiscal 2021 results in mid-March, Boxed said it tallied $20.3 million in software and services revenue — an income source not present in 2020.
“We now have two sides of the house: One is the e-commerce business, and one is the software business,” Huang said. “One thing that we’re really excited about is the B2B growth prospects,” he added. “Most people don’t know, but 25% of our business was B2B pre-COVID. And that just almost went away at COVID hit the United States. So seeing that bounce back is something that we’re really looking forward to.”
This year, Midwestern grocer Hy-Vee unveiled plans to expand into four new states: Indiana, Kentucky, Tennessee and Alabama. The move will bring the West Des Moines, Iowa-based chain its first Southern locations.
Currently, Hy-Vee’s footprint spans over 285 food and drug stores in Iowa, Illinois, Kansas, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin.
“Really, this has just been a couple of years of just looking at the footprint that we have and how the market is evolving,” Hy-Vee Chairman, President and CEO Randy Edeker told Supermarket News in an interview at the recent FMI Midwinter Conference in Orlando, Fla.
“COVID blew up the grocery industry, and a lot has changed,” he explained. “So it’s not us departing the area that we’re in. It’s really looking to the future — where are we going to grow? And as we look at cities of over 150,000 people, those would be our targets. If you look at our [current] eight-state trade territory, there are only 18 cities with over 150,000 people.”
Hy-Vee is also known for its retail innovation in store formats — including large one-stop-shop stores and locations focused on convenience, foodservice, health and wellness, and wine and spirits — and in-store concepts. The latter include store-within-store displays featuring nontraditional supermarket offerings such as fitness gear, footwear, apparel and accessories, and bath and beauty, as well as nail salons and eyewear kiosks.
“We feel you have to keep trying things,” Edeker said. “How do you fire a bullet and then fire a cannonball? You go out and test some things and you measure those things and see what works and what the customer likes about it and what they don’t like about it.
“The consumer is spread all over the place today. So we’re just trying to find the formats that are driven by customers’ lifestyles,” he noted.
In addition, Hy-Vee recently expanded its already broad health care offering with the launch of telehealth and online pharmacy services, dubbed RedBox Rx, and extended its e-commerce presence beyond grocery pickup and delivery to ship-to-home services, covering such categories as bulk products, health and well-being, and pet supplies.
At the FMI Midwinter Conference in Orlando, Fla., Supermarket News caught up with Tony Sarsam, president and CEO of SpartanNash.
In a discussion with SN Senior Editor Russell Redman, Sarsam shed light on performance catalysts in SpartanNash’s grocery distribution and retail businesses, as well as on how its military distribution segment has adapted amid the pandemic. He also gives his take on the extended food-at-home trend and on tailwinds and headwinds in the grocery distribution sector over the coming year.
“What we’re seeing right now is a lingering of the habits — what we call ‘sticky’ habits — that we thought would more quickly revert to older habits around the trend of people eating out more and making fewer meals at home. And it hasn’t taken shape quite that same way,” Sarsam explained. “Part of it is that people have learned during the pandemic that they like food preparation and found some things they can do well. Also, the experience of eating out has been a little bit tougher, as some restaurants have shortened their hours and are facing the same struggles that a lot of folks are having with labor. So, among all those things, we have a longer tail on the habits that were formed during the peak of the pandemic.”
SpartanNash’s core food distribution segment distributes to all 50 states, supplying 145 corporate-run supermarkets in nine Midwestern states — which make up its retail segment — and over 2,100 independent grocers nationwide. The Grand Rapids, Mich.-based company also distributes to 160 military commissaries and over 400 exchanges in United States and internationally. Sarsam has served as president and CEO since September 2020.
Since launching in 2012, Instacart has become North America’s largest third-party grocery e-commerce provider. Now the company is taking a bigger step to help grocery retailers drive their digital transformations.
This week marked the debut of Instacart Platform, a modular, enterprise technology package offering retail grocers end-to-end omnichannel functionality. Among the offerings are e-commerce storefronts; online delivery and pickup for stores or warehouses; digital advertising; omnichannel solutions to enhance the customer experience; and data tools for operational, customer and market insights.
“We are very excited about seeing Instacart platform launch. This platform is basically a new suite of enterprise-grade solutions so that we can help retailers power the future of grocery,” Instacart CEO Fidji Simo told Supermarket News in a podcast interview. “This industry is in the midst of a very big digital transformation. And digital transformation is hard. We want to make it easier with Instacart Platform so that we can give grocers the best technologies possible to be able to compete with Amazon, while they get to focus on the craft and care that they put into their relationship with customers.”
Overall, San Francisco-based Instacart partners with more than 750 national, regional and local retailers and provides online shopping, delivery and pickup from more than 70,000 stores in over 5,500 cities. Its services reach more than 85% of U.S. households and 90% of Canadian households.
Though initially focused on the grocery market, Instacart has steadily expanded into an array of retail sectors, including segments such as convenience stores, drugstores, dollar stores, office supplies, home goods, home improvement, beauty care, off-price/closeout retail, vitamins and supplements, and pet care, among others. The company, too, has built up a roster of enterprise e-commerce solutions and added technology capabilities, such as through the acquisition of smart shopping cart company Caper and partnership with micro-fulfillment specialist Fabric.
A former Facebook executive, Simo took the reins as Instacart CEO in August from company founder Apoorva Mehta. She already had been serving on Instacart’s board since January 2021.
“When I joined as CEO, I realized that there was a much bigger opportunity to really think of the company not just as online grocery delivery but as providing an operating system for grocery to help all grocers thrive,” Simo said.
“High prices at the grocery store” has become a common refrain in news headlines over the past several months, and that’s not likely to change in the near term.
In February, the Consumer Price Index for food-at-home jumped 8.6% year over year — the largest 12-month hike since April 1981 — and edged up 1.4% month to month after a 1% uptick in January. The increase continued a steady rise in inflation since the latter part of 2021.
That trend is steering more consumers to stores like Grocery Outlet. The Emeryville, Calif.-based chain, which describes itself as an “extreme value” retailer, touts big discounts on brand-name products and prices a typical shopper basket at about 40% lower than that of conventional grocers.
“The recent months have been interesting. When you’re paying $4, $5, $6 or $7 for a gallon of gas in California, everyone starts thinking about how to save money,” Layla Kasha, senior vice president, chief marketing officer and chief new store growth officer at Grocery Outlet, told Supermarket News in a podcast. “We’ve always been all about value, delivering customers the brands they love at prices that they can afford. And I think that’s never been more relevant than it is today. So we are seeing the traffic patterns come back and people really trying to stretch their budget.”
But there’s more to Grocery Outlet’s formula. The stores are run by independent owner-operators from the communities they serve, enabling locations to cater to shifting customer preferences. Shopper savings is achieved through a sourcing model of procuring surplus inventory and product overruns directly from thousands of supplier partners. This includes a changing assortment of products with “WOW!” prices, creating a “treasure hunt” shopping experience — a key draw for Grocery Outlet.
“The treasure hunt is something that emotionally connects to people. When you find that epiphany item, you get really excited. And that drives you to continue to shop at Grocery Outlet,” Kasha said. “But the value is unbeatable. When you get that brand at such a deep discount, that value is unprecedented. And that is another thing that really connects to you emotionally.”
Grocery Outlet opened 36 new stores in fiscal 2021, ending the year with 415 stores in California, Washington, Oregon, Pennsylvania, Idaho, Nevada and — a new state — New Jersey. More locations in new markets are upcoming.
“We’re all about the East,” Kasha said of Grocery Outlet’s expansion, adding that new stores are slated for Delaware and Maryland this year.
After the initial surge triggered by the COVID-19 pandemic, online grocery usage remains elevated in the United States. Max Pedro, president and co-founder of micro-fulfillment specialist Takeoff Technologies, aims to help grocery retailers not only handle that high demand but also improve their profit equation.
Marketing firm Acosta reports that nearly 70% of consumers now shop for groceries online at least some of the time, compared with about 40% at the start of both 2021 and 2020. What’s more, an analysis by Brick Meets Click reveals that supermarkets’ established online grocery users — that is, those who have shopped online with a grocer for over 60 weeks — generate 3.5 times more revenue than new digital shoppers. Those are customers worth keeping happy.
Micro-fulfillment has gained traction among grocery retailers of all sizes as a way to support rising e-grocery transactions. The scalable, automated solution is seen as an effective option to process more orders faster, provide more capacity for core products and reduce the cost-to-serve — as well as deploy quickly and at less expense.
Waltham, Mass.-based Takeoff has engaged in projects for micro-fulfillment centers, or MFCs, with U.S. grocery retailers such as Albertsons Cos., Ahold Delhaize USA, Sedano’s Supermarkets and Big Y Foods, as well as grocery retail/wholesale cooperatives Wakefern Food Corp. and Associated Wholesale Grocers.
“Right now, we have 22 live MFCs. It’s really exciting, the results that our clients are getting out of these investments,” Pedro said in an interview with Supermarket News. “We are proud to say that we believe we’re the only MFC company allowing these retailer to get that return on their investment. We founded this company with one dream: Make supermarkets that want to sell their groceries online profitable.”
In the wake of the pandemic’s unprecedented disruption to the grocery business, a new consumer has emerged — hybrid shoppers who are using both in-store and e-commerce to fulfill different purchases. But not all hybrid shopping behaviors are the same, points out Barbara Connors, vice president, Commercial Insights at The Kroger Co.’s 84.51°, the grocery giant’s retail data science, insights and media company. She joined us for our latest SN Off the Shelf podcast to share insights about these shoppers and how retailers can best engage with them.
“E-commerce engagement has doubled since pre-pandemic times and hybrid shoppers have also doubled,” she said. “This trend will continue to grow as adoption and trial continues to expand across different customer groups. And really what this means for the industry is that, we've come to a point where e-commerce is now mainstream and it will only continue to become a more important part of brand strategies.”
Delving into the profile of digital shoppers, 84.51° identified several commonalities: They trend Gen X and younger, have higher incomes and have children. They are high-convenience shoppers and medium to high natural and organic shoppers. Beyond these common traits, however, two distinct household types emerge: what 84.51° calls the “digital champ” and the “digital dabbler.”
“The digital champs are really those customers that have sort of moved all in and the dabblers are those that are still sort of trying it out and figuring out what they like and how it's going to fit in,” said Connors. “Overall, we do see that e-commerce shoppers tend to be younger, tend to have children and tend to value convenience. But within that when you dig in, we say these digital champs, those that are at the high end of the spectrum, they're a quarter of the households but they represent 61% of sales. And so it's really important that strategy meets the needs of them because winning with them is what's going to drive your overall growth today. They also tend to place a higher priority on health”
“On the flip side,” she added, “the dabblers are 14% of households but they're only 10% of the spend. They tend to be larger households and they also tend to have higher price sensitivity. So if you think about what we could do to engage them differently, instead of focusing as much on health benefits, it can be really prioritizing how you're showing value and how you are helping them to make fiscally responsible choices for their family or their budget.”
Connors shared deeper insights into both these groups, including generational and lifestyle trends, as well as the importance of omnichannel strategies for retailers and manufacturers. Tune into the podcast to learn more from 84.51°.
As a distributor in metropolitan New York, one of the nation’s largest grocery markets, Krasdale Foods has had a front-row seat to the economic volatility in the industry, namely the high inflation and supply and labor shortages hitting retailers, suppliers and their customers nationwide.
Gus Lebiak, president and chief operating officer of Krasdale since January 2021, said the company is experiencing issues such as a lack of truck drivers, product shortfalls in various categories, packaging shortages and elevated inflation that’s hiking costs for businesses and consumers alike — all amid high demand driven by the pandemic. And like other businesses across the country, the food wholesaler and its customers are grappling with the surge of infections from the Omicron variant of COVID-19.
“It has become a very fluid situation,” Lebiak told Supermarket News about the supply situation in an SN Off The Shelf podcast. “During the beginning of the pandemic, we had a lot of specific categories that were really being hit. Now we’ve seen this move around a lot. It’s not always the same categories. As far as supply issues, back in normal times, you’d be looking at service levels where you might not deliver three out of 100 cases, or 3%. It is [now] not uncommon to see 15% to 20% out-of-stocks. So it has really, really been challenging. And that does a lot to your efficiencies.”
At the same time, Lebiak is working to drive Krasdale’s expansion in its core independent grocery business. Krasdale operates a 325,000-square-foot distribution center in the Hunts Point section of the Bronx and supplies more than 300 independent supermarkets in the Northeast and Florida, mainly in metro New York. Store banners it serves include C-Town, Bravo, Aim and Market Fresh supermarkets; mini-groceries Shop Smart Food Markets and Stop 1 Food Mart; and a host of small retailers, reaching some 2,500 stores overall.
The company, too, offers a private-label program and operates a significant support services, through affiliates Alpha 1 Marketing and Beta II Marketing (marketing and merchandising), Consolidated Supermarket Supply (third-party grocery distribution), KoolTemp Foods (frozen and refrigerated food distribution) and Waverly (financial services).
Lebiak’s 40-year grocery career started with a range of retail roles over 10 years at Mayfair Supermarkets. Then in 1991, he shifted to the wholesale side by joining Twin County Grocers as a buyer/analyst, later becoming a category manager. In 1999, Lebiak assisted in the launch of supermarket cooperative Allegiance Retail Services, serving as director of grocery and then vice president of center store.
Lebiak joined Krasdale Foods in 2012 as vice president of Alpha 1 Marketing and later became senior vice president and COO of that unit. He was named as Krasdale’s president in late 2020 — a tough time to start at the helm of a large operation.
“It has been crazy. I have a supermarket and a buying background. I started in the stores when I was literally 15 years old — that was 1981 — and I’ve been at a few different companies,” he said in the podcast. “There are pieces of this business where you could set your watch by. But I have to say that this has been like no other time I’ve ever seen. And when you add the fact that I’m more involved in the hardcore distribution end than ever before, it has really been a challenge like no other.”
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With the news last week that Amazon plans to expand its new Fresh store concept to 28 more locations, the retail giant gave notice that it intends to be a serious player in the omnichannel grocery space. The Seattle-based retail giant is “quietly building a national grocery chain,” Bloomberg reported last week, with Amazon Fresh stores in the works “from Philadelphia to the Sacramento suburbs.” Retail industry expert Bill Bishop of Brick Meets Click was not surprised, and in fact has been expecting this move.
The grocery retail industry, like all businesses, has experienced a sea change during the pandemic — although unlike many other retail segments, supermarkets were never forced to close over the last 11 months. As essential businesses, they continued to provide food and necessities to American shoppers, though the patterns of how consumers did their grocery shopping changed dramatically and probably for the long term. Greg Sterling, vice president of market insights for retail analytics firm Uberall, recently joined us for an SN Off the Shelf podcast in which he outlined the trends grocery retail has been experiencing during COVID, and a look forward to what the industry can expect as vaccines continue to roll out in the country and consumers’ shopping behavior continues to evolve.
The Giant Company aims to build a more engaged and loyal base of omnichannel shoppers with the recent launch of its Choice Pass online membership program.
Matt Simon, chief marketing officer at Carlisle, Pa.-based Giant, said Choice Pass makes it easier for Giant Direct and Martin’s Direct e-commerce customers to place online orders for pickup or delivery. For a $98 annually or $12.95 monthly, subscribers can order as often as they like and never pay a fee for each delivery or pickup transaction.
“Subscription is so important,” Simon said in an SN Off the Shelf podcast. “We had Peadpod Pass — “PodPass” — in the past. That was kind of our entry into it. But with the fast growth in e-commerce in 2020, which is one of the critical priorities for our company, subscription has been such a big thing we’re looking forward to, and how to take advantage of opportunities to drive engagement and more loyalty.”
About a third of the Giant/Martin’s customer base are digital shoppers, and over 90% of the retailer’s market areas have access to its online grocery pickup and delivery services, according to Simon. Choice Pass pays for itself via two deliveries monthly or one pickup weekly, he said, and costs less than the previous PodPass membership, which had a $119 annual fee.
“Choice Pass is really the underpinning of what subscription will be for us in the future,” he said. “Unlimited free pickup or delivery for less than $100 a year allows customers to save over $20 a year, and it’s really just another way for us to bring convenience and simplified shopping to our families and customers who are loyal to us year-round.”
Down the road, Choice Pass — working in tandem with Giant’s Choice Rewards loyalty program, which sports a similar logo — could serve up more incentives for omnichannel customers. That might include perks such as fuel points, special savings and/or exclusive deals for subscribers, according to Simon.
“It’s an exciting entry into subscription, with a lot more to come in the future,” he said.
Part of Ahold Delhaize USA, The Giant Company operates almost 190 stores under the Giant, Martin’s and Giant Heirloom Market banners in Pennsylvania, Maryland, Virginia and West Virginia. Its Giant Direct and Martin’s Direct e-commerce operations include more than 145 online pickup hubs as well as grocery delivery in hundreds of ZIP codes.
Food and drug retailer Hy-Vee recently added a new dimension to its health care operations with the launch of Vivid Clear Rx, a pharmacy benefits manager (PBM). Leading the new subsidiary as Vivid Clear Rx president is Mike Agostino, who serves as senior vice president of pharmacy business development at West Des Moines, Iowa-based Hy-Vee.
Health & wellness categories ranging from organic to plant-based and other better-for-you claims were already performing strongly coming into 2020, but the impact of the coronavirus pandemic on consumers’ shopping behavior this year has spurred unprecedented sales and demand. In our latest SN Off the Shelf podcast, Jeff Crumpton, manager of retail reporting solutions at wellness-focused data research leader SPINS, shared his thoughts and insights on what’s been happening in the natural and wellness categories, including organic, plant-based, CBD, supplements and other claims-based products.
Private brands have come a long way the past few years and they're no longer viewed as just low-cost alternatives at shelf, noted Aimee Becker, Senior Vice President Strategic Advisory at Daymon, a leader and pioneer in private brand development, during a recent SN Off the Shelf podcast. And that change in attitude toward private label has placed the category in an even greater position of strength during the pandemic. “I think we’ve really shifted consumer attitudes away from this idea of generics or just a price play at shelf to really being true consumer brands,” Becker said. “This shift really started with retailers focusing on improving quality, and today we see that 86% of shoppers consider private brand quality to be equal to or better than the national brand.” In addition, according to the Daymon Private Brand Intelligence Report, just under 90% of consumers say that, compared to national brands, they trust private brands just as much or more (89%) and that private brand variety is just as good if not better (87%). “As we think about COVID specifically,” Becker continued, “private brands were really well positioned pre-pandemic. But when COVID hit, the strength and relevancy of private brands really became a little bit more pronounced. At the height of the pandemic, we definitely saw a lot of brand shifting and that really worked in favor of private brands. We think that we'll continue to see positive trajectory and momentum for private brands in the months to come.” As for who the private brand shopper is, Becker said it crosses all demographics and pointed to data from the Daymon report. “I think there tends to be this stigma of who the private brand shopper is,” she said. “But the private brand shopper is really everyone. Three in four shoppers buy at least one private brand item on every shopping trip. With that, a third of shoppers actually say that private brands comprise the majority of their shopping cart. “Then conversely, you only have about 6% of shoppers saying that they exclusively buy national brands. If you take all of those facts together, everybody’s buying private brands in some way, shape or form.” And Becker expects that trend to continue and grow, particularly among the younger Millennials who have been driving private label success before the pandemic hit. This group is really starting to abandon this cachet of legacy brands and is increasingly becoming brand-agnostic, she pointed out. “What they’re looking for is products that are meeting their needs at the time and place they’re at,” she said. “As private brands are continuing to innovate and really engaging shoppers in a different way, we think we’ll continue to see that broaden.”