Retail

Grocery Tracker: $100B By 2025

All four grocery stocks tracked find themselves down from last week’s trading.

Kroger (KR) stock remains in the valley following a bump up in value in mid-January. The past week’s trading saw prices down $0.03 overall, with larger fluctuations canceling each other out. At the time of writing, Monday’s (Jan. 30) trading has been bumpy, starting out below Friday’s close of $33.36, but rose 0.60 percent to $33.56 by the afternoon.

While Costco (COST) remained relatively flat until last Thursday, hovering above $164, Friday trading saw value drop considerably during the morning to $160.94, recovering only slightly to close at $162.06. The new week saw COST open down from last week, with prices Monday morning hovering below Friday’s close. By the afternoon, Costco was up 0.54 percent to $162.93.

Ahold Delhaize (AD) — the food retail group that owns Food Lion, Hannaford and Stop & Shop, among others in the U.S. — finds itself down from €20 even at the start of last Tuesday’s trading to €19.79 upon yesterday’s close. Aside from a spike in mid-January, prices have remained relatively consistent since mid-December after the stock climbed out of an end-of-Q3 hole.

Whole Foods (WFM) also found itself down from last week. Despite a mid-to-late-week rise to $31.41 on Thursday afternoon, Friday trading saw prices fall over $1 to $30.20. Monday trading opened below Friday’s close and fell a further 1.20 percent to $29.94 at the time of writing.

Whole Foods recently announced its latest move to cut costs and streamline its business operations in the wake of comparable sales declines. Whole Foods plans to shut down all three of its commercial kitchens in Everett, Mass.; Atlanta, Ga.; and Landover, Md.

The closures reportedly affect some 500 jobs, though Whole Foods reportedly said most will find jobs somewhere else with the company or its suppliers. The closings reportedly don’t have anything to do with last summer’s food safety violations issued by the Food and Drug Administration.

Betsy Harden, a spokesperson for Whole Foods, was quoted by The Wall Street Journal as saying: “As part of our ongoing plan to streamline operations, we have decided to leverage the expertise of our supplier network to create some of the high-quality prepared foods sold in our stores.”

Whole Foods has been working on some big changes as of late. Back in November, after five straight quarters of declines in comparable store sales, Whole Foods dropped one of its two CEOs. Co-CEO Walter Robb stepped down, leaving Founder John Mackey as the sole CEO of the company. Whole Foods also began rolling out a loyalty program around that same time.

For fans of the supermarket’s pre-made meals, don’t fret. Whole Foods reportedly said that all of its 446 stores have on-site cooking or preparation capabilities in some capacity and that it will continue to invest in those — a smart move considering the rise and profitability of grocerants (not to mention their potential knack for bringing back lost foot traffic).

Grocerants provide customers the incentive to get out of their computer chairs and into aisles once more — at least that’s the hope. Prepared food in supermarkets is a big driver of grocery sales regardless. Technomic, a food industry research firm, found that freshly prepared foods generated $15 billion in sales for supermarkets in 2005. By 2016, that figure has reportedly nearly doubled to nearly $28 billion.

While Whole Foods focuses on streamlining, another major grocery player made a recent move to boost its eCommerce chops.

Albertsons Companies Inc. — the grocery and pharmacy conglomerate behind Albertsons, Shaw’s, Star Market and Safeway, among others — has welcomed a new senior VP of digital marketing and eCommerce, Narayan Iyengar. He replaced Tamara Pattison, said Internet Retailer, who left Albertsons in June 2016.

Shane Sampson, CMO of Albertsons, said in a company statement: “ECommerce, digital and social media channels hold unlimited potential for delivering the kind of personalized service our customers want. Narayan’s expertise will enable us to deploy new service and marketing models to attract more shoppers and grow our business both in stores and online.”

Iyengar has a track record of innovation, Albertsons said, from his time working on eCommerce optimization for Walt Disney Co. across an ecosystem of 20 websites and apps.

While online sales make up a small fraction of the total market in the U.S., the market share is growing quickly. A new study from the Food Marketing Institute and Nielsen projects online grocery sales in the U.S. could grow tremendously in the next decade.

By 2025, the report suggests that American consumers could be spending upwards of $100 billion on online grocery purchases, comprising some 20 percent of the total market share.

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