Category Archives: Retail Concepts

Lidl Alters Stock, Prices In Danville VA Store

lidl-store-front

The Lidl store in Danville, Virginia has been open a couple of months. It’s already made some (much needed) shifts in its product offerings. And, though staff on hand on a recent Wednesday afternoon reported business has been “good,” it was pretty slow on our second visit.

That, for the company, is the bad news. The good news is how ably they work with consumers wanting to return something – often a hassle ao competitors’ stores. On our first visit, we’d bought a device to catch and kill houseflies. It didn’t work. Despite the fact it was many weeks before we could get back to the store (it’s nearly an hour’s drive away), the return process – done at the checkout, not a consumer service counter – went smoothly… once a manager was located: That took a couple of minutes.

A bit later, at the conclusion of the same visit, we realized that a bottle of wine we’d purchased was not the one we wanted – a less than one-third the price of the one we walked out with. I immediately walked it back into the store, spotted the same manager on the floor, and he OK’d a return even though, he said, Virginia law bans the return of wine. (Since we’d only bought it moments before, and had the receipt, he reckoned the law could be ‘waived’ (read ‘overlooked’.) We returned to one of the checkouts – only three were open on this slow afternoon – and were promptly issued a store ‘gift’ card.

Back in the chilled foods section along the right wall, it was clear that someone has paid attention to the fact that people on Virginia’s Southside don’t have much interest in Indian food, as the choices in the heat-and-serve section have been trimmed (to one!) and other, similar meals have been culled, as well.

The bakery’s offerings are more numerous, and samples are more in evidence – with a lighted sign rotating through the day’s offerings.

But one of the greatest changes – hardly unexpected for a new, price-oriented store – has been the push to drop prices – an effort evident in most every department. One dramatic example: whole “young” chickens were offered at $.69 (69 cents) per pound, down from $.99 – the price of comparable birds at Food Lion, along with Walmart, a chief competitor in Danville.

(The town – a small city, actually – used to have two Piggly Wigglys and a Harris Teeter. One of the former was replaced by a Walmart; The latter simply pulled out of the market. There’s one Save-A-Lot, a limited assortment discount store. It’s so NEVER busy, you wonder why it’s still in business.)

Lidl needs to do, in this and other locations, product shifts to reflect the fact locals aren’t interested in “Cheese [or anything else] from Europe”. Most of their new US stores are in small, often rural, unsophisticated communities. The natives there don’t know (or care) about brie or other ‘specialty’ cheeses, or foods from foreign lands. But they do go for Lidls’ bakery goods, many of which – such as fresh bagels, croissants and similar pastries – are all but unknown beyond the products offered in the bake-it-yourself section of the dairy aisle.

Some reports have said Lidl isn’t doing the business it expected to in its launch stores. But as someone pointed out, the privately (German-) owned company has deep pockets, and is committed to a long term success in the US. There is every reason to put faith in that – and the fact that both Lidl and Aldi, it’s German-based cousin, which also is growing its US store count, will continue to disrupt the US grocery-selling scene for years to come.

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Instore Robots Are H-E-R-E!

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Marty the robot is being tested at Giant Food Stores on Union Deposit Road in Lower Paxton Township, Pennsylvania.  (Photo: PenLive.com)

An increasing number of food retailers are using, or planning to use, instore robots – not to replace existing workers, but to do some of their tasks more efficiently. In the end, the theory is, everyone benefits: The retailer can keep a better handle of out-of-stocks at the shelf level, be quickly notified of spills and other issues requiring special attention from a worker, and check prices from shelf labels, to ensure prices posted and those in the front-end system are in sync; Employees get help keeping track of where stock is needed; Customers are more likely to find shelves fully stocked (or being restocked, as they shop), enjoy a safer shopping environment as spills, etc. are dealt with quicker, and, as a bonus, get to watch a so-far-unusual piece of technology work their favorite store’s aisles.

AndNowYouKnow, the produce blog/newsletter, reported a few days ago on a pilot robot-using program in a Giant Food Store in eastern Pennsylvania. This Ahold USA store is running the pilot in association with Badger Technologies. They intend to have the robot, called Marty, up and working in 12 stores by sometime next year.

The ANUK also noted that other retailers considering or already employing robots include Walmart, Amazon, and Target. A Digital Trends story in September of last year noted that Walmart is planning to shift some workers to other roles and let some 7,000 go as robotic or newly-automated systems are introduced for ‘back room’ operations such as billing and accounting. The Wall Street Journal noted that one objective of the new hands-off processing of invoices and cash, among other things, is “to put more staff in contact with shoppers.”

CNBC, in a report primarily about Amazon’s growing home delivery services, noted that Walmart also has announced a deal with smart doorbell maker August to provide customers an in-home delivery service: It will enable Amazon delivery personnel to have one-time access to home so they can deliver and put away, where appropriate (as with frozen or refrigerated items), at least part of an order.

Services such as these, plus driver-less trucks, are going to play increasingly important roles in stores and households of the surprisingly near future.

Watch this space.

Gambling Machines Among Latest ‘Added Values’ Items In US Supermarkets

video gambling machines

Generally speaking, grocers aren’t gamblers: Traditionally, they’ve tended to hew to fairly traditional approaches to marketing and selling food. At least they did until a few years ago.

Then, faced with new competitor types – such as hard discounters such as Aldi and Sav-A-Lot (and now, Lidl) – and an increasing emphasis on store periphery departments, retailers started stepping up their game, expanding their offerings and, most recently, paring prices to the bone.

A growing number, including New York State-based Wegman’s, and Connecticut-based Stew Leonard’s, added an entertainment factor by bringing ‘backroom’ business to the store floor: Putting in-store baking operations front-and-center; providing a window into juice- and milk-bottling operations (Stew Leonard was a pioneer in this); taking sampling to a new level with educated offerings of featured wines … the list goes on.

But following at least two other Illinois grocers in truly breaking new ground recently was a Piggly Wiggly store in Antioch, where several video gambling machines were introduced. Store owner David Karczewski told the local Daily Herald newspaper that while the machines hadn’t been part of his original plan when he applied for a license to sell alcohol within his store, he quickly realized that the liquor permit, which also allowed him to introduce video gambling into his grocery store, sounded like a good idea.

He’s subsequently said he’s been proved right: He told the Daily Herald that they’ve earned him a number of new customers.

Hardly surprisingly, some community members have objected to the presence of gambling machines in a family-focused establishment, while town board members say allowing gambling wasn’t their intention in approving the store’s liquor license. Store owner Karczewski, meanwhile, said he installed the machines to give his location a competitive edge against larger competitors, and he’s been pleased with the many new shoppers he’s seen in the store.

His innovation, Food Dive noted a few days ago, isn’t all that different from other food retailers’ innovative efforts to attract new customers, or, at the least, new income from existing ones. (Banking, parcel shipping, Coinstar machines and even the occasional Department of Motor Vehicles branch as well as restaurants and bars being among them.)

In all such instances, retailers are fighting as best they can to overcome competitive threats. Even more extreme, though, are the approaches of such disrupters as Lidl and Aldi, in particular, whose strategies revolve around limiting selections (reducing the need for backroom space) and cutting costs – internally and to consumers – to the bone.

The latter’s strategy is disrupting the food retailing industry more dramatically than anything before it came close to doing. The club stores – Costo, Sam’s Club – caused a lot of shoppers to rethink shopping patterns a couple decades ago, but the careful among them quickly realized that the key to successfully shopping those stores – to save money – is to ‘pre-shop’ prices of things you want at other outlets. The clubs aren’t giving anything away, so some of their prices are far from the best out there.

And that concept was further complicated as Amazon introduced an ever-broader range of products online. Now, the click-and-collect concept that Walmart, among others, are greatly promoting are presenting further challenges to walk-in-and-buy oriented retailers.

It’s only a matter of time before Walmart and others figure out how to profitably do click-and-collect on food items. Fresh and frozen food items, that is: Offering click-and-collect on dry groceries is as simple as doing it.

Meanwhile, dollar stores also are becoming more competitive against grocers. Dollar Tree, for example, has been featuring – via a big store-front banner – a several-ounce ‘pre-conditioned’ steak for around $4.00. But this is a real ‘buyer beware’ item: The product looks good, but the ‘pre-conditioning’ has involved a form of pounding that’s beat the … flavor out of the product.

Still, to some shoppers, something called a ‘steak’ is still outside the range of what they usually consume for protein. And that’s the key issue on all the retail changes the industry is undergoing: The value is in the eyes of the beholders, and consumers, having an amazing assortment of tastes and concepts of what’s good, and good for them, will respond to grocers’ changes with their own ideas of what makes sense and what doesn’t.

Watch this space!

Delivery Services, Smaller Stores, Point to Future of Food Retailing in America

we-deliver_sign

Grocery retailers who’d like to get into the home delivery game, a business so far dominated by such big players as Amazon, Instacart, Jet, Peapod and the like, are being offered an opportunity to “play” – in a very serious way – by Deliv, a crowd sourced startup that earlier this year got a $28 million cash infusion from UPS, undoubtedly the most experienced last-mile (from wherever to the customer’s door) delivery service in the US. Just-launched Deliv Fresh claims it can “offer same-day delivery from {retailers’] own branded sites,” according to an article in DC Velocity, which describes itself as “the market leading multi-media magazine brand serving the specific informational needs of logistics and supply chain managers and executives.”

Deliv says that while Amazon Prime “takes ownership of the customer transaction,” moving products from its own or partners’ warehouses direct to customers, the Deliv service “provides same-day service to grocers, meal services, and other perishable e-commerce providers such as FoodKick by FreshDirect, GetFedNYC, GreenBlender, Plated, BloomThat, The Cheese Store of Silverlake, Plum Market, and Eataly Chicago.” The company currently operates its core service in 18 markets and more than 100 cities, providing same-day, last mile delivery services for retailers and businesses including Macy’s, Best Buy, Kohl’s, and PetSmart.

Smart: They’re starting with a broad range of retailers, in a limited number or markets, testing the market, as it were, and preparing to roll out its service as and when appropriate.

The grocery retailing business is undergoing seismic changes these days, and will continue to do so as the likes of Aldi and upstart Lytl – like Aldi, a huge success as low-price-leader food stores in Europe – gain ground in the US. (Aldi’s been here for a long time, but has, for the most part, flown under the radar, since stores are, in a sense, struggling to get their low-price message out into their various communities.)

A surprisingly long article in the May 16 New York Times went well beyond reviewing a new book on the state of supermarket retailing (“Grocery – The Buying and Selling of Food in America”). The paper’s reporter went with book author Michael Ruhlman on a tour of a ShopRite store in New Jersey, getting an up-close-and-personal education on some of what’s happening in supermarkets today and, as or more important, what’s likely to happen in coming years.

One interesting point was that grocery deliveries will help influence an emerging trend – of stores getting smaller, and going back to being more customer-centric and less packed out with packaged goods of the type people are increasingly buying less of.

This is a topic you will see discussed more and more often on this blog. We also will talk more about what Aldi and Lydl are all about, and how they are likely to be big players – in way smaller stores than today’s typical ones – in the reshaping of American food retailing.

Watch this space.

Cutting Produce Waste Gains Fans, At Farm and Store Levels

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There is a growing movement to reduce wastage of pre-store and store-level waste of produce that is just past its prime.

Perhaps the leader in the pre-store sector of the movement is Imperfect Produce, which sources from farms and delivers to householders through the San Francisco Bay area and, increasingly, in and around Los Angeles. Whole Foods Market introduced a program a year ago to sell “cosmetically challenged” fruits and vegetables that, despite Iooking less than perfect, are as fit for the table, lunchbox or ingredients-prepping table as their better-looking counterparts. In March of this year, Maine-based Hannaford Brothers   joined the increasing number of retailers who are offering, at discounted prices, what Hannaford calls “The Misfits – Beautifully delicious and Nutritious” but slightly over-ripe or less-than-ideally-shaped produce items.

Now, Harvard’s T.H. Chan School of Public Health has come out with a detailed primer advising shoppers and would-be eaters ways to make it more likely they will waste less of produce they buy with the best of intentions – to prepare/eat it in a timely fashion – and then don’t do so.

Whole Foods and Hannaford, no doubt like others, pull ‘misfit” produce from their own stock. Imperfect works with an assortment of farms, many of them family operated, around California. They buy what’s in season but a little “off,” cosmetically.’

Their website says, “The produce we source is rejected purely for cosmetic reasons, meaning that taste and nutrition aren’t affected. Common reasons for produce being classified as “ugly” are: too small, wrong color, misshapen. We only source the most delicious fruits and vegetables, and we have strict quality-control measures in place to ensure that what ends up on your doorstep is fresh, delicious, and nutritious. If we wouldn’t eat it, we won’t sell it. We’re redefining BEAUTY in produce, not taste!” They also have a “like it or don’t pay for it” policy in the event a client feels something in their weekly box – the program works on a subscription basis, with boxes of pre-selected sizes and mixes being delivered weekly – is too ugly, they get credit for it in their next shipment.

It is likely more such programs will be initiated in coming years, and well they should be, Anything to reduce the amount of produce being wasted is a good thing!

Supermarkets Are Replacing Department Stores in US Malls

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As department store chains shrink, their former stores in malls have remained empty, making mall operators unhappy and customers wary of all the dark anchor spaces – those at either end of the mall, once the hustling, bustling home to this Big Name Chain or another one. What’s a mall operator to do?

Increasingly, a Philadelphia Inquirer article noted last week (April 11), supermarkets are increasingly being invited – or independently exploring opportunities – to take over spaces once occupied by J.C. Penney, Sears, Macy’s or another once-popular, now-fading national or regional department store outlet.

The malls offer several serious pluses to food sellers: [1] They have the right zoning; [2] they were designed for high traffic, and have parking lots to accommodate it, and [3] they tend to be in easy-to-get-to/from locations. (A notable exception to the latter is Virginia’s Tysons Corner area, just outside Washington, D.C. When I lived in that area 40 years ago, after a few harried visits, I wouldn’t go near the “place” – actually an accumulation of shopping centers positioned so close to each other that getting from one to another was a nightmare and avoiding the entire mess was all but impossible.

(The Tysons Center website lists more than 300 stores, including an Amazon kiosk. And that’s in just one of the shopping centers!)

In the Philadelphia area, a Whole Foods already has replaced a department store at Plymouth Meeting Mall. Another Whole Foods is due to open later in the year at Exton Square Mall, and a Wegman’s is in the works for the Montgomery Mall. The article also noted that “Jimbo’s, a specialty food chain much like Whole Foods, opened at Westfield Horton Plaza in San Diego; Wegmans is replacing a Penneys near Boston; and College Mall in Bloomington, Ind., will welcome 365 by Whole Foods Market this fall.”

Expect to see more such activity in coming months and years.

Kroger Trims Store Development Plans, Ups E-Commerce / Technology Activity

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Noting that its competitors are increasingly following Kroger’s store-building and stocking approaches, the nation’s 2nd largest grocer (after Walmart) said in a Securities and Exchange filing that 2017 will see fewer stores developed and more done in the areas of technology and e-commerce.

A Food Dive analysis said this past weekend that financial analysts more than likely view this move as a savvy one, demonstrating Kroger’s ability to flew with the needs of its markets. (The company operates a number of store names scattered across the country.) Food Dive noted that Kroger has been aggressively expanding its Click List e-commerce service as it works to establish itself as the go-to company for online sales across the country.

In the SEC filing, company executives noted that their first same-store sales slip in 52 quarters was due to food price deflation couple with an active development program. The company said it will be growing its footprint at a slower pace – by 1.8% compared to last year’s 3.44% – as it cuts back to 55 new projects, compared to 2016’s 85. And capital expenditures, the company said, will fall 13% to between $3.2-3.5 billion, compared to $3.7 billion in 2016.