Retail

Grocery Tracker: Discount Games

Grocery stocks held steady or showed signs of growth this past week after some mixed sessions since the year began. Whole Foods pulled itself out of a Valentine’s Day slump, rising to hit $31 during Friday (Feb. 17) morning trading. At the time of writing, WFM was up 1.15 percent over Thursday’s close to $30.91. Whole Foods’ market cap was estimated at over $9.7 billion.

Costco stock was up as well for the week, hitting a high over $176 on Friday morning, with a market cap over $77 billion. At the time of writing, COST was up 0.06 percent over Thursday’s close, at $175.86.

Ahold Delhaize held steady for the week, closing out Friday up 0.15 percent to €20.38 and a market cap over €26 billion (over $27.6 billion). Kroger stock was also up for the week, though Friday trading saw a slight dip in value after a strong opening. At the time of writing, KR was worth $34.01, up 0.21 percent from Thursday’s close.

Shopping rewards app Shopkick is hoping to quench U.S. consumers’ thirst for promotions and rewards by adding grocery rewards to the mix.

Shopkick recently announced it had opened up Shopkick Grocery to brand and grocery partners, inviting participation in the upcoming consumer launch of Shopkick Grocery, currently slated for early April of this year.

Launched in 2010, consumers use Shopkick’s mobile commerce and location-based app to collect points, browse deals and promotions and earn rewards. Shopkick Grocery will allow consumers to earn rewards while grocery shopping.

Over a year of research, development and beta testing, Shopkick Grocery was found to increase consumer basket sizes to $59 in grocery, drugstore and retail spend per trip versus the $32 national average. Likewise, company research found that use of Shopkick Grocery increased weekly visits to the grocery store and increased consumer engagement at the shelf.

Shopkick found during beta testing that 65 percent of users would head to the grocery store to earn Kicks (Shopkick rewards points) during their free time. Additionally, some 60 percent of beta users tried new products or brands to earn Kicks. Lastly, some 57 percent of users would frequent a different grocery store to earn more Kicks than at their regular store.

Retail brands and partners for Shopkick include Best Buy, Clorox, Nestle and Starbucks, among others. The Shopkick mobile app is compatible with smartphones running iOS or Android.

But not everyone in the grocery space is looking to rely on discounts and promotions to draw in U.S. consumers. German global discount grocery chain Lidl is reportedly gearing up to make its stateside debut this coming summer, earlier than the 2018 deadline the company had previously set. But Lidl is looking to change up its formula for American audiences.

The company reportedly plans to split with its discount grocery roots for its U.S. expansion, according to a company presentation acquired by Business Insider.

“After three years of research, we discovered that U.S. consumers don’t like discount groceries,” the presentation reportedly read. “Unlike Aldi, the Lidl will be a hybrid similar to Trader Joe’s or Harris Teeter, but closer to a Trader Joe’s. We will sell high-end brands, quality not quantity, best products only.”

Locally sourced products, wine and coffee will reportedly be focuses of Lidl’s U.S. grocery stores. Size-wise, Lidl’s stateside locations are expected to be between 30,000 and 36,000 square feet — smaller than a traditional U.S. supermarket like Kroger.

Lidl reportedly plans to open as many as 100 locations across the East Coast by mid-2018, starting with 20 stores located in North and South Carolina, as well as Virginia.

Lidl already operates in 27 countries worldwide with around 10,000 locations to its name. The grocery chain has opened a U.S. headquarters in Arlington, Virginia. Distribution centers are currently under construction in Maryland, Virginia and North Carolina.

Finally, a recent report from Retail Feedback Group (RFG) has shed some interesting light on grocery shoppers’ digital engagement habits. RFG’s “U.S. Supermarket Shopper Digital Update,” indicates, among other things, that, while engagement with digital channels is growing among grocery shoppers, that growth has yet to extend to social media.

RFG found that, while 87 percent of supermarket shoppers regularly visit one or more social media sites, only 25 percent have connected to their primary grocery store.

“Closing the social media gap presents a real opportunity as many shoppers will change their behavior based on recommendations from their social network,” noted Brian Numainville, RFG principal. “For example, our research shows that 45 percent of supermarket shoppers are very willing to make a new recipe or meal, and 32 percent are very willing to purchase a new food item based on social network suggestions.”

While social adoption remains low, some 56 percent of supermarket shoppers do interact with their primary food store on one or more digital platforms to check the digital circular, research special promotions and build grocery lists. Among age demographics, 66 percent of millennials interact with supermarkets on digital platforms. Just 47 percent of baby boomers do the same.

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