Kroger announces 2 more Ocado sites

The locations of Kroger’s newest automated facilities highlight two very interesting parts to its Ocado strategy.

By planting a CFC in Florida, where aside from a smattering of Lucky’s Market locations it doesn’t have a store presence, Kroger is showing it intends to use the facilities to reach new markets. Kroger may place the facility between Orlando and Tampa — two cities separated by about 80 miles that have the density to support a high-volume e-commerce operation and have experienced significant population growth in recent years.

The move adds a new dimension to a grocery battle that’s unfolding in a state dominated by Publix. The legacy company has a first-class store fleet, unrivaled customer loyalty and same-day delivery as well as pickup through Instacart. In recent years, though, Walmart has challenged the grocer with remodeled stores and a growing e-commerce business, while new players like Sprouts Farmers Market, Aldi and Earth Fare have elbowed their way in.

Kroger’s move amounts to a hefty bet on e-commerce shopping — and particularly the pure-play online grocery model that has proven challenging for the likes of Amazon and Ahold Delhaize.

Its Mid-Atlantic CFC, meanwhile, can serve as a support center for its Kroger and Harris Teeter locations. CEO Rodney McMullen has said the automated warehouses would help supply click-and-collect orders. In a recent interview with Grocery Dive, e-commerce expert and Brick Meets Click chief architect Bill Bishop said the facilities could eventually stock store shelves, too.

A question mark with both facilities — and with the Ocado model overall — is speed. Its massive CFCs can quickly and cost efficiently assemble orders, but they have to be located outside metropolitan areas, making on-demand delivery problematic. Ocado is set to test a one-hour delivery service called Zoom next month in London, and CEO Timothy Steiner has indicated the service will eventually come available for its international clients.

Earlier this month, Ocado’s main fulfillment center in Andover, England, which handles 10% of the company’s orders in the country, experienced a massive fire. Nobody was hurt in the blaze, and the company plans to quickly rebuild, though experts are beginning to question the safety and stability of the CFC model in light of the incident.

As Coresight Research noted recently, “The fire highlights the risk of the centralized distribution model, which is virtually unique to Ocado in the U.K. online grocery space; most of Ocado’s online grocery rivals in the U.K. rely heavily on in-store picking, dispersing risk of disruption among hundreds of local stores.”

The company doesn’t appear to be making any public shifts to its strategy after the fire and the decision to announce two more CFCs shortly after the incident shows that it remains committed to its current model for the time being.

Source: Grocery Dive

Is the Future of Grocery Shopping B.Y.O. Container?

If you think this is going to be yet another column admonishing you for not doing enough to curb the amount of single-use plastic in our waste stream, you can relax. You don’t need a lecture at this point.

You might already know, for instance, that global consumer culture has generated more than 8.3 billion metric tons of plastic since the middle of the last century, and that we currently produce 300 million tons of it a year, half of which is made up of items used only once. And you’re probably aware that roughly 8 million metric tons of this discarded plastic ends up in the ocean, where it threatens marine life of all kinds. It’s unlikely anyone needs to tell you that every year we throw enough plastic away to circle the planet four times, or that a mass of plastic waste floating in the middle of the Pacific Ocean is three times the size of France.

So instead of piling on to the guilt you probably already feel, allow me to offer a glimmer of hope. Increasingly there are signs—not big ones, but signs all the same—that a new generation of businesses and manufacturers, and even some of the older ones, are ready to change the way products are packaged and delivered so that single-use plastic is all but removed from the equation. Right now, these companies’ actual impact on the waste stream is small. But if their solutions catch on and become the norm, the impact could be tremendous.

Last week brought news of a start-up called byHumankind, which delivers a variety of personal-care products directly to the doors of its online customers. At first glance, this doesn’t appear to be anything particularly new. But what is novel is the role of plastic in this most familiar of transactions. It’s practically nonexistent. Mouthwash comes in the form of a tablet that dissolves in water. Shampoo comes in a bar, like soap, and arrives wrapped in paper. Deodorant is delivered at first in an elegantly designed plastic container—but refills come paper-wrapped and ready to be popped into the original holder, turning what would typically be single-use plastic into something that can potentially last for years.

Another new startup, Loop, carries out its mission of reducing plastic waste by leveraging the popularity of other brands. Its creators describe Loop as a “circular shopping platform,” which sounds oh-so-disruptive but is actually just a fancy way of describing what used to be relatively common only a few generations ago, when the milkman would come around delivering fresh milk in glass bottles and collecting the empties from the previous week.

Loop has updated this admittedly quaint-seeming idea for the modern era. A wide range of products from big-name personal-care, household, and food and beverage brands come to you in durable, reusable containers. When you’re finished with them, you can either ship the containers back to Loop or schedule a pickup. That triggers the next shipment to come your way. Once returned, your discards are sanitized and refilled with products to be sent out to another customer, posthaste.

Loop is still in the pilot stage; it will begin testing its model in the New York City and Paris markets this spring. One of the people behind it, Tom Szaky (CEO of TerraCycle, a company that specializes in recycling hard-to-recycle items) has cited the travesty of ocean plastics as a primary motivator in getting the new company off the ground. Brian Bushell, the founder and CEO of byHumankind, writes on the company’s website that the idea for his start-up came while he was on a small boat off the coast of Thailand, exploring “tiny, uninhabited islands, in an environment I’d expected to be untouched,” when his boat became surrounded by plastic waste. “I’d expect to see these things floating in Manhattan’s East River, I thought. But here?”

A big part of Bushell’s pitch to customers—beyond the quality of the products he’s selling—is the opportunity to keep five pounds of single-use plastic out of the waste stream every year, “just by getting ready in the morning.”

With their emphasis on refillables and circular shopping, byHumankind and Loop join a vanguard of young, forward-thinking companies that are building sustainability into their business models, rather than simply offering customers a “green option” or vowing to reduce the carbon footprints of their operations and supply chains. This movement also includes zero-waste, packaging-free grocery stores like Brooklyn’s Precycle or Idaho’s soon-to-open Roots Zero Waste Market, where customers bring their own containers and buy items loose or in bulk. This new wave of entrepreneurs are banking on the idea that consumers are sick and tired of feeling like they’re hastening the end of humanity every time they buy hair conditioner or yogurt.

Whether their hunch is correct remains to be seen. (Zero-waste groceries can prove to be a tough sell even in famously progressive cities like Austin, Texas.) But certain retailing and cultural phenomena—online shopping, direct-to-consumer delivery, improvements in storage and shipping technology, and a growing environmental awareness among millennials, whose proclivities guide the decisions of some of our biggest brands—are definitely converging in ways that make it easier to opt out of plastic packaging.

Today, sure, it’s just a noteworthy trend. But with the right timing and the right amount of public buy-in, today’s trend might actually become tomorrow’s industry standard.

Source: EcoWatch

Amazon Go secures space in the heart of London

After a successful pilot and expansion in the U.S., Amazon Go is taking on the U.K., but will it be a winner overseas?

Currently there are just 10 Amazon Go stores stateside. Most are clustered in the same city, with four in its original location of Seattle, two in San Francisco and four in Chicago. The limited number of current stores suggest conservative expansion despite its announcement last year that it plans to open more than 3,000 additional spaces by 2021.

For Amazon Go, one of the largest hurdles to growth is customer adoption. When the retailer first launched in the U.S., critics weren’t sure shoppers were ready for a cashier-free experience where cameras and sensors track a customer’s every move. According to a survey of 1,000 Americans by Shorr Packaging Corp in July, 84% of people liked the idea of shopping at Amazon Go, but 20% said there were drawbacks. These drawbacks include not being able to use coupons, no social interaction and the inability to pay with cash.

Londoners, however, are already familiar with the idea of checkout-free stores. Two of the U.K.’s most popular supermarkets, Sainsbury and Tesco, tested a cashierless store in London just a few months after Amazon Go opened in Seattle. The Inquirer reported that Sainsbury had fairly decent adoption rates after its pilot, with 100,000 transactions on its “scan, pay and go” technology called SmartShop. The company also said that it was seeing 3,000 to 4,000 new customers registering for the tech each week.

This could bode well for Amazon, whose technology is more developed than both U.K.-based grocers. While all require a mobile device, Amazon’s sensors remove the friction of having to scan each product, automatically detecting what has been removed from a shelf and adding it to a customer’s virtual cart.

If the retailer’s expansion goes well, it could meet or even surpass the expectations that it will be a $4.5 billion business by 2021, according to RBC Capital Markets, since Amazon’s cashier-free stores generate 50% more revenue than traditional convenience stores.

Amazon has been planning its U.K. arrival for well over year. In 2017, the e-commerce giant filed many trademarks with the U.K. Intellectual Property Office for its slogans like “No Lines. No Checkout. No Seriously.” In addition, the retailer is already familiar with its British audience through its Amazon Fresh, Amazon Pantry and Prime Now services in the region.

Considering the retailer also has these three services in other countries like Japan and Germany, what starts with London could signal an international takeover.

Source: Grocery Dive

Jet to sell direct from NYC’s Fulton Fish Market

Operating since 1822, Fulton Fish Market is a New York City institution. Now, residents don’t have to trek to Hunts Point in order to snag today’s catch. One of the most popular aspects of the storied market is its commitment to sourcing sustainable seafood products. The seafood industry is rife with supply chain issues including everything from mislabeled fish to human rights violations.

New York City’s nearly 9 million residents tend to be particularly savvy when it comes to food policy issues and many of them have a preference for sourcing local items whenever possible. But they also have to battle the city’s traffic and congestion to do so. The high-density population, abundance of affluent consumers and a dearth of car owners makes New York the perfect habitat for online food delivery to thrive.

As Jet rolls out its fresh seafood offerings, one of the big questions will be whether consumers are willing to let go of their hesitancy towards ordering fresh proteins online in lieu of being able to see, smell and peruse offerings at the supermarket or local butcher shop. In this case, convenient, hassle-free delivery and a preference for transparent food products may prevail.

Despite the appeal of this new offering, Jet still has some stiff competition in the NYC food delivery scene. FreshDirect has been the reigning online grocer with 63% of the market share, according to Bloomberg, but now residents may be turning their favor elsewhere as FreshDirect’s expansion hasn’t gone as smoothly as planned. Some are even taking their grievances to social media, recounting missed deliveries and out-of-stock products.

Perhaps FreshDirect tried to bite off more than it could chew, offering prepared meals, adding new products and offering same-day delivery for some SKUs, while also constructing a new fulfillment center intended to secure its premier position. It also recently relocated its headquarters to the South Bronx, which was intended to double its business.

Hot on its heels are several competitors, including Amazon and Ahold Delhaize. Ahold Delhaize’s Peapod boasts three decades of online grocery under its belt and has NYC in its growth strategy crosshairs. While it reports $1 billion in sales and enlists 1,500 delivery drivers, however, Peapod hasn’t claimed the same market dominance that FreshDirect enjoyed.

There’s a clear lesson unfolding amid the battle royale for NYC’s online shoppers. Some companies are becoming so enamored with meeting demand that they’re outpacing their ability to put their money where the mouth is. Online food shopping is a rapidly growing industry and shoppers have little patience for delivery mishaps or missing products. As more companies enter the competition, the ones who focus on securing loyalty instead of seeing how many different products they can offer or how fast they can deliver will likely win the crown.

Source: Grocery Dive

Kroger plans to roll out Home Chef meal kits to 500 more stores

Kroger Co. will begin selling meal kits from its Home Chef unit to 500 additional Kroger-owned stores in markets across 15 states and allow customers who buy the kits online to customize their meals.

With the expansion, Home Chef kits will be available at more than 700 of Kroger’s nearly 2,800 retail food stores, which operate under a variety of banner names.  The company says it expects to roll out the brand at more stores this year, as well as to introduce additional Home Chef products, but did not provide specifics.

The grocery retailer last year paid $200 million to acquire Home Chef, a brand that was born online and still sells subscription meal-kit plans and kitchenware via

Home Chef also recently introduced a feature it calls Customize It that enables online shoppers to swap, double or upgrade ingredients in the meal kits they buy. The company added the option in response to customer requests, says Home Chef CEO Pat Vihtelic.

Home Chef, founded in 2013, says it delivers more than 3 million meals per month. In December, Kroger started selling Home Chef meal kits in 65 Walgreens locations in the Chicago area.

Since last year, Kroger has been working on a strategic plan, called Restock Kroger. Among other things, the goal is to expand Kroger’s digital and ecommerce efforts and make broader use of personalized customer data.

Speaking at the National Retail Federation 2019 conference in New York City in January, Kroger CEO Rodney McMullen said the Restock Kroger strategy aims to transform Kroger into a growth company. Initiatives include offering 100 SKUs on Alibaba’s TmallChinese marketplace, an investment and exclusive agreement with U.K.-based Ocado Group PLC, developing products for its organic line of products Simple Truth, grocery order pickup at Walgreens stores and introducing scan-and-go shopping technology in Kroger stores.

Last year, Kroger agreed to buy a stake in Ocado and license Ocado technology that helps other grocers run automated warehouses and deliver food to customers’ doors. Ocado is No. 22 in the Internet Retailer Europe 500.

Kroger also has teamed up with Microsoft Corp. to test new in-store shopping features, which include “digital shelves” that can show ads and change prices on the fly and sensors that keep track of products and help speed shoppers through the aisles.


New multi-level H-E-B opens in Houston

Houston Heights -area residents can now shop in their new 92,000-square-foot, multi-level H-E-B. The grocery store opened at 2300 N. Shepherd Drive and is just the second multi-level H-E-B in the Houston area.

It offers a large variety of beer and wine options, fresh produce, Texas-made goods and H-E-B Meal Simple and H-E-B Organics products. Some other features include a colorful floral department, a coffee shop called The Roastery, a bakery and both seafood and meat markets. Shoppers can also take advantage of the store’s Curbside Pickup and home delivery options.

“It’s been very exciting for all of us. We’ve really been focused on bringing the community a very unique store that speaks to the culture and the needs and desires of the Heights customers and community,” said Winell Herron, H-E-B group vice president of public affairs, diversity and environmental affairs.

Area residents have been “incredibly happy” about the arrival of the new store, Herron said, noting that a video posted recently by H-E-B promoting the opening garnered hundreds of positive responses and only one negative one.

A special Sip + Stroll event held at the store for the opening brought out members of H-E-B leadership and community influencers. Scott McClelland, president of H-E-B in Houston, said he had long “coveted” a store in the Heights and was thrilled about building new relationships in the area.

“I don’t know that I’ve ever been more excited about a store opening than this one because this one truly is a community effort because if it wasn’t for you, I wouldn’t be here right now,” he said. “This one took you all helping us pass the alcohol ordinance because without out that, we couldn’t have built. And what we promised was if you passed it, we would give you a store that you would be very proud of.”

The new ordinance allows the new store to sell beer and wine.

Herron said the multi-level store was designed to provide an extensive inventory on a relatively small property of just 3.5 acres. Parking is on the first level, and special escalators and elevators allow customers to get their shopping carts up and down from their vehicles.

In a special Heights touch, shoppers can marvel at 13 sweater-wearing chicken sculptures created by a local artist as they approach the second level. Also, large letters spell out “Heights” without the I because customers themselves create that letter, McClelland said.

Being active in the communities H-E-B serves is important to the San Antonio-based grocer. In recent months, the H-E-B Heights team has been out at events like Lights in the Heights, helping out with Kids’ Meals and providing meals at the Heights Manor Apartments.

H-E-B also presented two $5,000 checks to the animal shelter Friends for Life and to HITS Theatre, which provides arts education to Houston children.

“Really when I think about this, we’re here before in the community, and we’re going to be long after the store opens,” Herron said. “That’s what our commitment is all about.”

After months of effort by not only H-E-B but members of the Heights community, the new store was celebrated with toast before the Sip + Stroll guests went inside the store to explore.

“I’d say in the 28 years I’ve been with H-E-B, this is the first time that we’ve ever done an alcohol toast at a store opening,” McClelland said with a smile. “You’ve got to start somewhere, so let’s start in the Heights. This store wouldn’t be happening if it wasn’t for what’s in this glass. Here’s to a successful new store and here’s to the Heights. Drink up.”


Carrefour is ready to open its Digital Hub in Paris

The Carrefour Digital Hub will open in March 2019 and mark a new stage in the group’s digital ambition, spearheaded by Alexandre Bompard as part of the Carrefour 2022 transformation plan.

In June 2018, Carrefour and Google signed a strategic agreement to accelerate the Group’s digital transformation. This agreement included the creation in Paris of an innovation lab in partnership with Google Cloud. The Carrefour Digital Hub will therefore host the Lab Carrefour-Google teams, experts in Artificial Intelligence and Machine Learning, and more than 300 Carrefour employees specializing in digital and e-commerce. The digital transformation will remain controlled by Massy, ​​closer to the business teams.

This new 2,500 m² space will open next March in WeWork’s coworking spaces, just a stone’s throw from station F, in the 13th district of Paris. Modern and collaborative, it will enable Carrefour to integrate an ecosystem of start-ups and thus be at the heart of European and global innovation.

The Digital Hub Carrefour teams will focus on fostering new experiences for consumers by continuing to innovate around data by integrating it more into all of the group’s activities. The Hub will also offer an increasingly omni-channel shopping universe to make Carrefour the leader in e-commerce food.

“Our teams will work on innovative projects around Artificial Intelligence and machine learning techniques to create value in the service of business. The premises will also house some of the operational and IT teams in charge of the digital transformation which is still being piloted in Massy. All this is really an additional asset for Carrefour in the success of its digital ambition by 2022 “says Amélie Oudéa-Castéra, E-commerce Executive Director, Data and Digital Transformation of the Carrefour Group.


Ahold Delhaize to open 350 new outlets in Belgium

The Belgian-Dutch distribution group Ahold Dehaize announced that it aimed to accelerate growth by opening about 350 stores and supermarkets in three to four years.

In addition to opening 200 new Fresh Atelier and Shop&Go stores, which it announced in late October, the group plans to add 100 new supermarkets, and 30 to 50 Albert Heijn supermarkets in Flanders.

“Delhaize will pursue its growth path in 2019 with a solid commercial plan,” the group stated. “With this growth plan Delhaize will strengthen its position on the Belgian market through accelerated growth, both online and offline. That will be done in combination with Albert Heijn’s growth plans.

Sam’s Club Unveils Innovation Store

Four months after announcing the new venture, Sam’s Club – owned by Walmart Stores Inc. (Bentonville, Ark.) – has debuted its first Sam’s Club Now store in Dallas, a space where it will test tech-driven retail innovations.

The site is 32,000 square feet, roughly a quarter the size of one of its typical warehouse stores, and it features in-store technology that interfaces with its Scan & Go feature, according to a release from the company. Shoppers using its new Sam’s Club Now app will be able to access smart shopping lists that learn behavior and auto-fill a member’s list, in-store app-based wayfinding, entertaining augmented reality features and one-hour club pickup. The store will also have electronic price labels that instantly update.

The store also hopes to increase efficiency for its workers: More than 700 cameras will monitor and manage inventory and optimize the store’s layout. The retailer will use the site to incubate, test and refine its companywide operations.


Walmart plans supercenter transformation with new ‘town centers’

Walmart’s supercenters are known for drawing customers from far and wide. But at a time when the company is being challenged to operate with greater efficiency and impact, it’s floating a collaborative approach that stands to draw additional shoppers and generate more revenue from existing real estate.

Perusing the Walmart Town Center website reveals a grab bag of concepts that seek to mold supercenters’ acreage into not just mall-like retail collections but gathering spaces, as well. Some of the projects call for green spaces and recreational facilities in addition to restaurants, coffee stands and shops built inside hip storage containers. A development in Tumwater, Washington, calls for a dog park and a coffee shop. The Longmont, Colorado, supercenter project will feature basketball courts, an ice skating rink and skateboard park.

Other developments may have movie theaters, driving ranges, doggie day cares, health clinics and farmers markets.

Walmart plans to customize each project to the local community, meaning that unlike the interiors of its cavernous supercenters, no two locations will look alike. Still, there are some common touches, including the Pickup Towers that dot numerous developments — underscoring Walmart’s push for e-commerce reach and convenience even as it updates its physical locations.

“We want to provide community space, areas for the community to dwell — a farmers market, an Easter egg hunt, trick or treating,” Johnson said, according to the Atlanta Business Chronicle. “We want to provide pedestrian connectivity from our box to the experiential zones that are planned on our footprint. We want to augment these experiences and activities with more food and beverage, with health and fitness, essential services and entertainment.”

Walmart stands to generate significant revenue as landlord. And names like Chipotle and Orangetheory are likely eager to occupy valuable real estate next to the nation’s largest retailer. Operating retail developments like this isn’t a new concept for grocery operators. Publix, for one, owns shopping centers throughout Florida that are anchored by its stores. Creative partnerships also aren’t a new concept. Hy-Vee, for instance, co-locateswith Orangetheory in a few spots and plans to follow this blueprint with future locations.

But no retailer can match Walmart’s scale with these developments. This means the company can likely negotiate favorable rent agreements. As a consultant interviewed by the Atlanta Business Chronicle points out, many supercenter sites, particularly population dense ones, have grown considerably in value since the ’90s and early aughts, when Walmart went on its nationwide building spree.

Most important, though, is the potential Walmart has to draw new shoppers to its stores. The low-price leader has been courting younger, more affluent consumers of late with an enhanced assortment of natural and local foods, private label offerings and acquisitions of brands like Bonobos and ModCloth. Partnerships with the likes of Shake Shack and Orangetheory would bring more of these shoppers into Walmart’s orbit.

But will twenty- and thirty-somethings who don’t shop with Walmart start doing so just because there’s a burger joint or a dog park on the premises? The retailer wants to create mini communities around its supercenters, but shoppers may be turned off by the idea of spending time at a Walmart-branded ice-skating rink or a coffee shop with a large orange Pickup Tower next to it.

Striking the right balance between consumer and corporate needs with these concepts — not to mention effective cross-promotions and deals with nearby retailers — will be key to the success of Walmart’s town centers.

Ultimately, this announcement underscores how, for all of its investments in e-commerce, Walmart still sees physical spaces and the in-store shopping experience as paramount to its success. It’s also yet another example of the retailer trying to leverage its strongest assets into even greater advantages.

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