Though many grocery stocks experienced a bit of a bumpy ride last week, there were still some evidence that shares are on an upward path. Surprisingly, three out of the four we track reached the end of the week with share price growth, with just one seeing a slight downtown.
Costco (COST) had a week of highs and lows. The wholesaler saw shares hit a high later in the week at $168.10, but by Friday afternoon, COST shares dropped back down to close at $167.69.
It was a positive week for Whole Foods (WFM), as the company’s shares saw a significant boost from opening at $28.83 on Monday (March 27) and steadily increasing over the coming days. Shares rebounded from a low of $28.39 on Tuesday (March 28) to close out the week at $29.72.
For grocer Kroger (KR), last week ended on a high note. The company’s shares saw a slow but steady increase throughout the week after hitting $28.82 Monday (March 27) afternoon and eventually reached $29.48 by Friday’s close.
International food retail group Ahold Delhaize (AD) experienced one of the most dramatic bumps last week, hitting a major low of $19.65 on Wednesday (March 29) after reaching $19.97 on Tuesday’s opening. Eventually, shares were able to bounce toward the end of the week to close at $19.88
Millions of Whole Foods’ customers are heading elsewhere.
Over the past six quarters, the organic-food chain has lost as many as 14 million customers to what some believe to be an unthinkable threat — Kroger.
“The magnitude of the traffic declines … is staggering,” Barclays analyst Karen Short told Business Insider. “As most retailers know — once traffic has been lost, those patterns rarely reverse.”
In a recent research note, Short also explained that once Whole Foods’ customers venture to Kroger, it’s very unlikely that they will ever go back. Though Kroger has not historically been seen as much competition to Whole Foods, the grocer’s recent efforts to ramp up its supply of organic foods may be paying off.
In Kroger stores today, customers are likely to find several aisles devoted exclusively to organic and natural offerings, in addition to a variety of meat and produce. Barclays confirmed that sales of organic and natural food at Kroger rose to a total of $16 billion over the past year, outweighing the $15.8 billion made at Whole Foods.
Though Whole Foods is facing competition from all sides, both online and in-store, a recent report from TheStreet shows the grocer isn’t going down without a fight.
The company has plans to boost the publicity surrounding its more inexpensive in-house brand 365, with the hope that lower prices on organic products will help to get people back in the door.
“I’m a fan — Millennials immediately head to Trader Joe’s because they believe the price is a better sell, but I have found the 365 brand to be as equally affordable and better quality,” David Manzler, wrote in an email to TheStreet. “The minimal packaging makes it easy to find, allowing for a much better overall shopping experience.”
Even with the uncertainty facing Whole Foods, Amazon stole the show in grocery industry news last week.
The eCommerce giant finally unveiled its AmazonFresh grocery pickup service in two Seattle locations for beta participants, which for now are only Amazon employees. The service will eventually, upon a public launch, be available to Amazon Prime members at no additional cost. But as of now, Amazon has not pegged a definite date for when AmazonFresh Pickup will open to the public.
“AmazonFresh Pickup is a fast and easy way to order groceries, pick them up, and be on your way in minutes,” Amazon said in an FAQ. “Orders can be ready in as little as 15 minutes after they are placed. There’s no order minimum and the service is free for Prime members.”
In a promotional video, the customer experience looks somewhat similar to a classic drive-up ATM setup — except instead of pulling up to withdraw cash, customers have their pre-placed orders brought out to their cars by Amazon employees.