Grocery Guys

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 [email protected], 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 [email protected], 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 [email protected], 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. 

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Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at [email protected], 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. 

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Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at [email protected], 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:

Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at [email protected], 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:

Have a pitch for the podcast? Contact SN Executive Editor Chloe Riley at [email protected], 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.”