Grocery Round-Up: Digital-First Delivers For Kroger, Another Instacart Pair-Up And Hoarding Round 2
The dishes are cleared, the leftovers are largely eaten and the world of grocery shopping is settling down to normal as Thanksgiving week 2020 passes into memory, (or at least whatever passes for normal) as the year is heading into its final few weeks. And that new normal has become increasingly digitally delivered as consumers have continued to demonstrate their clear preference for finding ways to grocery shop without ever having to physically enter a grocery store.
And as we round up the grocery landscape this week, it seems digital progress is the order of the week as Instacart adds another grocer to the line-up and Kroger credits big eCommerce growth for its strong Q3 performance. Strength, it seems, is about to be tested as COVID-19 cases tick up, and consumers’ enthusiasm for bulk buying returns anew.
Krogers 108 Percent eCommerce Sale Boost
As its Q3 earnings results went out this week, Grocery giant Kroger Co had big digital progress to highlight. Online sales were up 108 percent during the quarter. The company also raised its full-year guidance on how it expects to perform. In late October, Cincinnati-based Kroger announced its “Restock Kroger” program — which aims to improve shipping, distribution and the links between its online and offline businesses — would be a major boost for shareholders.
It’s a pledge that Chairman and CEO Rodney McMullen said the company had continued to execute on during its last quarterly performance. He pointed to total company sales, which hit $29.7 billion in the third quarter, up from $28 billion for the same period last year.
Earnings per share (EPS) reached $.80, up from $.32. Q3 operating profit hit $792 million, up from $254 million the previous year.
The company further noted that it has made “continued investments to support and safeguard associates, customers and communities, nearly $1.3 billion since March.”
“As a result of our continued strong performance, market share growth and the expectation of sustained trends in food-at-home consumption for the remainder of our fiscal year, we are raising our full-year 2020 guidance,” said Kroger’s Chief Financial Officer Gary Millerchip. “For the full year 2020, we expect total identical sales without fuel to be around 14 percent and adjusted EPS growth of 50 percent to 53 percent.”
In the third quarter, excluding fuel and dispositions, sales grew 11.3 percent.
Meijer Signs On With Instacart
Online delivery platform Instacart has announced its newest grocery team-up as it heads toward its initial public offering (IPO). Midwest retailer Meijer has signed on with the service to provide same-day delivery of groceries.
“Customers rely on Instacart to get the groceries and goods they need from the retailers they love,” Instacart President Nilam Ganenthiran said in a Thursday (Dec. 3) press release. “Meijer is an iconic, family-owned grocer that has served families across the Midwest for more than 85 years. Through our new partnership, we’re bringing Meijer’s incredible selection online for customers, giving Meijer customers access to everything they need from the comfort and safety of their home.”
As part of the deal, Instacart will deliver Meijer full range of grocery and household items to customers. The service is already online in Michigan, Ohio, Indiana, Kentucky, Illinois and Wisconsin — the range of states Meijer operates in currently. Instacart said it partners with over 500 merchants and makes deliveries from almost 40,000 locations in the U.S. and Canada, making the platform available for 85 percent of U.S. households and 70 percent of Canadians.
CVS Quiet Grocery Play
According to recent reports in Progressive Grocer, the grocery landscape has had a sleeper player for some time building its own grocery business that is going largely unnoticed. And it’s a player that almost everyone knows: CVS.
CVS is growing its Hispanic-focused CVS Pharmacy y mas chain, with a special emphasis on grocery products according to the reports, with 12 more CVS Pharmacy y mas stores planned for New York and New Jersey.
Designed as a one-stop shopping location for customers looking for food, pharmacy and cosmetic merchandise — the locations are known for carrying over 1,500 grocery products from Hispanic brands such as Iberia Foods, Yaucono, Fabuloso, Tio Nacho, Pilon and Cafe La Llave.
“Our CVS Pharmacy y mas stores have been hugely beneficial to providing a more inclusive environment and value-based personalized selection for our Hispanic customers,” said Mayra Boitel, vice president, chief merchant of alternative formats at CVS Health. “Customers can access familiar brands they already know and love, speak with a bilingual staff who can clearly answer any questions about their medication regimen, and easily navigate throughout the store to find what they need quickly. We understand our Hispanic customers are looking for more personalized shopping experiences and we’re eager to deliver in these markets and make them feel at home while they pick up their essentials.”
CVS Pharmacy y mas locations have been under construction since 2015 and as of 2020 there are more than 200 open in 90 cities across California, Florida, Nevada, Oklahoma, Texas and Puerto Rico.
The Stockpiling Fever’s Second Wave
Some comebacks are welcome. Others, not so much. And according to grocery store chain CEO Stew Leonard (of Stew Leonard’s grocery stores) consumers are once against rushing to stockpile goods as the pandemic seems to be taking a turn for the worse.
“You’re seeing people stockpiling a little bit,” he told FOX Business’ Maria Bartiromo on “Mornings with Maria” and he added that shoppers are seeking essential items such as toilet paper and paper towels. The news comes as the U.S. set a new record for virus-related deaths Wednesday (Dec. 2) while 14 million new cases were diagnosed. Consumers, he noted, are getting anxious which is leading to bigger buying binges.
Leonard went on to say that despite customers beginning to squirrel away some household staples, there is still “plenty of food.”
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