Retailer aims to onboard associates along East Coast
A Lidl store in Italy
As it prepares to enter the United States this summer on a newly accelerated timeline, Lidl is seeking to hire as many as 800 associates each across North Carolina and Virginia, as well as 250 in South Carolina, over the next 12 months.
As WFMY News in Winston-Salem, N.C., pointed out, the hiring push in 13 cities across the Tar Heel State is part of the German discount food retailer’s larger plan to recruit about 4,000 workers at stores and facilities along the East Coast. Meanwhile, the Virginian-Pilot noted opportunities for employment with Lidl in 12 Old Dominion cities, and WYFF in Greenville, S.C., reported openings at four Palmetto State locations. Lidl's first U.S. stores are expected to open in these states.
The starting salary for store associates is $12 per hour, plus benefits. The grocer revealed its plans on its Facebook page, which included a link to the U.S. careers section of its website.
Lidl’s U.S. headquarters is in Arlington County, Va.
Sprouts Sees Growth in Q4, FY2016
Net sales, comps grow for quarter, full year
Natural grocer Sprouts Farmers Market reported a rise in both net and comparable-store sales during its fourth quarter of and overall fiscal 2016, showing a glimmer of hope in a competitive channel where a lingering deflationary cycle continues to compound competitive pressures.
In Q4, which ended Jan. 1, net sales increased to $986 million, 6 percent over the same period in 2015. Comps inched up 0.7 percent, driven by positive traffic of 0.4 percent, but were impacted by cost and retail deflation, mainly driven by deep deflation in produce.
“Clearly, this has been the most challenging deflationary environment we have experienced since 2009, and the longest period of sustained food deflation in decades,” said Amin Maredia, CEO of the Phoenix-based retailer, on a Feb. 23 conference call to discuss the results.
The competitive promotional environment, too, was a challenge during the quarter, Maredia added. It's anticipated to remain so for the near term until deflation subsides.
“During this time,” he added, “we will continue to maintain our competitive position by being priced right and focused on customer initiatives to drive traffic to our stores.”
Q4 net income was $17 million, a drop of $11 million from the adjusted net income of the same period a year prior.
For the full year, net sales increased 13 percent to $4 billion compared to the year prior, driven by a 2.7 percent increase in comps. Net income totaled $124 million, a decrease of $10 million compared to the previous year's.
During the quarter, Sprouts opened three stores: one each in California, Oklahoma and Texas. For the fiscal year overall, it opened 36 locations, resulting in unit growth of 17 percent, and a total of 253 stores across 17 states as of Jan. 1. It also opened a distribution center in Atlanta during the year.
In 2016, Sprouts enjoyed “exceptional” in-store and digital holiday marketing campaigns that resulted in significant sales lifts and many customers trading up for their holiday meals. It continued to make significant progress on strategic initiatives in product innovation, customer experience and investments in both infrastructure and team members, among them:
Expanding natural and organic private label to more than 10 percent of revenue, with private label sales and comps continuing to outpace company average in both sales growth and comps. Total private label SKUs reached 2,100 by year's end.
Bringing food and deli expansions to 76 stores, offering additional convenience of freshly prepared proteins, sides, salad bars, soup stations and fresh juices.
Increasing engagement with customers via e-mail, mobile apps and social media, and expanding its Amazon Prime Now delivery partnership to nine stores across four markets.
Implementing new technology such as systems for human resources and labor management for non-production departments.
Improving customer service and employee retention, as well as developing future leaders, via significant investments in training and training infrastructure for team members.
QuickShop: What Do Customers Think about Walmart’s New C-Store?
Walmart looks pretty determined: marching out a series of initiatives over the years—Neighborhood Market, Walmart Express, curbside pickup, in-store pickup—to make its low-price philosophy more accessible to value-minded, price-sensitive shoppers who, otherwise, may wish to avoid a time-consuming trek to a supercenter.
The retail giant recently unveiled its latest effort to merge value and convenience:Walmart’s next generation convenience store. This new-concept c-store, currently being piloted in Rogers, AR and Crowley, TX, features a walk-in beer cooler, sprawling areas devoted to hot foods and fountain drinks, and—don’t miss this—Walmart prices.
QuickShop: What Do Customers Think about Walmart's New C-Store?
This weekend, mobile solutions firm Field Agent deployed 24 QuickShoppers to the new Walmart c-stores—14 to the Rogers, AR location and 10 to Crowley, TX. These agents captured photos and video, and they answered a series of questions about their experience with the new c-store format.
The video below offers an upclose look at the convenience store, complete with audio commentary from QuickShoppers. Further down we share the full, downloadable results from the study.
To participate in the study, agents were required to purchase at least $5 worth of gas and one hot food item. Field Agent verified these purchases by requiring QuickShoppers to submit receipts.
All in all, Field Agent’s QuickShoppers were particularly high on the next generation Walmart c-store, which they rated, overall, a 4.7 on a 5-point scale (i.e., 5 being very good). Moreover, 83% of participants said they’re completely or very likely to purchase food, snacks, and/or beverages from the convenience store in the future.
Good news for Walmart and its efforts to bring more accessibility and convenience to its EDLP philosophy.
Who Are Amazon Prime Members? No, Really. [Survey]
Just a sliver of information about Amazon Prime members is enough to throw the business media into a frenzy.
Case-in-point: Last week my inbox blew up with reports that Amazon had finally revealed the total number of Amazon Prime members—well, kinda-sorta.
In truth, the online retailer had filed a form 10-K which, for the first time, detailed revenue from “retail subscription services,” a category encompassing Prime membership fees, digital video and music, audiobooks, and the like.
The company pegged this number at $6.4 billion for 2016. A bit of 3rd Grade division later—$6.4 billion divided by the conventional $99 Prime fee—and we at least know the ceiling for how many Prime accounts there may be: 65 million.
But Who are Amazon Prime Members? No, Really.
This weekend, mobile solutions firm Field Agent surveyed 587 bona fide Amazon Prime members to explore their shopping and spending behavior.
We knew we were surveying actual Prime members with active memberships because each respondent submitted a photo of their Prime membership status (as pictured). Respondents were also required to submit screenshots/photos of their Amazon purchase history from the preceding 6 months.
Based on the results, here are 5 important insights into Prime members that go well beyond what a basic 10-K filing can show.
1. What benefits do Prime members actually use?
Free two-day shipping, Prime Video, and Prime Music are clearly—and not surprisingly—the most-used benefits among Prime members, both overall and on a week-in, week-out basis. The chart shows how other Prime benefits stack up against the "big three."
2. How much did Prime members buy/spend over the last 6 months?
Overall, Prime members reported spending a total of $678 on 32 different purchases, or $21.19 per purchase, over the last six-month period (including the holiday season). The infographic below displays how much Prime members bought/spent both overall and in two specific categories: electronics and homes goods.
Note: Respondents were instructed to count the total number of Amazon purchases associated with their Prime account over the past six months. As you'll see below, many Prime members say they share their accounts with other members of the household and even other households. Our agents also calculated the total amount (in $) of Amazon purchases from the previous six months. The figures in the infographic below describe the average Prime member in the survey. Numbers are based off the total number of respondents who made purchases in the category over the last six months.
3. How many monthly Prime members are there?
Amazon offers a $10.99 monthly Prime membership for customers who may not want the $99 fee and year-long commitment of an annual membership. In our survey, 11% of respondents identified themselves as monthly subscribers.
Field Agent also asked respondents to identify all those who use their Prime account to make purchases (i.e., not just watch streaming movies or listen to music). Only 29% answered, "I'm the only one who uses this Prime account to make purchases."Who do the others share their account with?
My spouse/"significant other" (in the household): 56%
My kids (in the household): 19%
Other households: 17%
My business/company: 5%
One Prime account does not equal one individual. Thus, the whole question of "How many Prime members are out there?" may need clarification. What do we mean by "Prime member" anyway?
5. Are Prime members making food and beverage purchases through Amazon?
Just how common are food, snack, and beverage purchases among Prime members? In the Field Agent survey, a modest-yet-attention-worthy 33% said they had purchased food and/or beverages from Amazon over the past six months. Compare this to 78% who made electronic/electronic accessory purchases and 54% who purchased home goods.
Sunday, February 26, 2017
Why are cocoa farmers in Côte d’Ivoire still living in poverty?
22 February 2017 • Author(s): Roy Manuell | Digital Editor
Barry Callebaut, one of the leading companies in the food industry from the perspective of promoting sustainable and responsible development warn of the slow progress in Côte d’Ivoire.
New study on cocoa farmers published by the French Development Agency (AFD) and Barry Callebaut on cocoa farmers
Cocoa farmers in Côte d’Ivoire earn approximately €0.86 per day, far below the national poverty level
Yield improvement on cocoa farms would be a crucial step forward
Even with the support of an increasing amount of sustainability projects, most cocoa farmers in Côte d’Ivoire still live far below the poverty line. A new study executed by the French Development Agency (AFD) and Barry Callebaut, the world’s leading manufacturer of high-quality chocolate and cocoa products, estimates that cocoa farmers earn a roughly estimated 568 West African Franc (CFA) per day, approximately €0.86.
This is the direct result of low cocoa yields, on average 435 kg/ha, on already relatively small cocoa farms. On top of that, many of the cocoa trees in Côte d’Ivoire are old and beyond their most fertile age. Plant diseases, such as stem borer, swollen shoots virus (CSSV) and mirid bugs add further to the low productivity.
“Data and statistics on cocoa farmers’ well-being, yields, access to finance, diseases and agricultural practices are scarce…”
The study also showed that basic socioeconomic infrastructure such as primary schools, primary health care and drinking water is often not present in cocoa farming communities. Nevertheless, farmers do not envisage giving up this crop. The main reason for not adopting better agricultural practices is not the lack of knowledge, but the lack of means.
The survey was carried out in 2013-2014 on more than 700 cocoa farmers and their plots in Côte d’Ivoire.
Bruno Leclerc, AFD Country Manager in Côte d’Ivoire:
“Data and statistics on cocoa farmers’ well-being, yields, access to finance, diseases and agricultural practices are scarce, which is a serious constraint to the efficient design and implementation of programs and actions for better cocoa sustainability”.
The barriers to yield improvements are the insufficient use of fertilisers, including organic fertilisers due to insufficient financial means and the lack of access to finance. In addition and of particular relevance in Côte d’Ivoire where trees are old and highly affected by diseases, the requirement to replant cocoa trees with the optimal planting material is often postponed due to a lack of knowledge of best management practices.
Nicko Debenham, Head of Sustainability at Barry Callebaut:
“The results of this study show that Barry Callebaut’s approach to lifting cocoa farmers out of poverty by focusing on yield improvement is the right approach. Nevertheless, it also underlines the size of the challenge and the necessity to work with governments to create the right socioeconomic infrastructure and access to finance and inputs”.
Is The US Restaurant Recession Becoming Structural?
“Flat sales” are now a “welcome change.” The New Normal.
National restaurant data and anecdotal evidence has been piling up. “T Vogel,” a commenter on WOLF STREET, put it this way:
My wife and I make almost 30k more than the median family income in my town (northern CA) with no kids. Our rent just went up by 1k a month – landlord selling – starter houses are selling at 500k.
We are not spending a dime more than needed. I plan to skip our weekly night eating out now.
They’re not the only ones to skip restaurants. Costs are going up, not just of restaurant meals, but of life in general. Incomes are lagging behind. And consumers are adjusting…. That’s what a Reuters/Ipsos opinion poll of more than 4,200 U.S. adults confirmed today.
One-third of the respondents said they were eating in restaurants less often than three months ago. The poll was conducted in the second half of January. Of them, 62% cited cost as the primary reason.
Restaurant prices have been rising. The price index for “food away from home,” a subcategory in the Consumer Price Index, increased between 2% and 3% every year since 2012. In January, it rose 2.4% year-over-year. Those price increases are cumulative, and they add up after a while.
It’s not just that eating out is getting more expensive; it’s that stretched households are pushed by price increases elsewhere to divert some of their limited means from eating out to other expenditures.
Yet grocery stores aren’t reporting blockbuster numbers either, Bob Goldin, partner at food industry strategy firm Pentallect, told Reuters. “There’s more splintering of the food dollar, and the pie isn’t growing,” he said. “Where you spend has changed more than the amount you spend.”
The national averages, as seen from the restaurant’s point of view, bear that out.
In its most recent Restaurant Performance Index, the National Restaurant Association lamented “soft same-store sales and customer traffic readings” in December, which kept the Current Situation Index (tracking same-store sales, traffic, labor and capital expenditures) in contraction mode for the third month in a row:
42% of operators said their same-store sales declined year-over-year.
47% of operators said their customer traffic declined year-over-year.
This sort of data has been coming out for a while. It got to the point where TDn2K titled its most recent Restaurant Industry Snapshot: “Flat Sales, Welcome Change for Restaurant Industry in January.”
And more specifically:
While same-store sales growth was flat (zero percent) in January, it represented a welcome break from the ten consecutive months of negative sales growth experienced by the industry through the end of last year.
These flat sales were a function of slightly higher per-person average spending and fewer people going to restaurants: same store traffic was down 2.5% monthly and 4.1% on a rolling three-month basis. As the report put it: “Although still negative, this was the best month for the industry since last May.”
On a two-year basis, same-store sales were down 0.8% from January of 2015.
There were some winners in January, with growing same-store sales: Upscale casual, family dining, and quick service. Casual dining “was able to achieve flat results in January,” hallelujah, thus breaking a streak of 13 months in a row of falling same-store sales.
And there were some losers with same-store sales declines, according to the TDn2K report: fine dining and fast casual.
You get the idea: It’s been so tough out there for restaurants that any sort of flat spot or even a smaller down-tick in the averages is welcome news for the industry. And it looks like it’s becoming a structural feature of the US economy, though not nearly as bad as the downward spiral of brick-and-mortar retail.
This of course contradicts the theory or hopes that millennials – who are said to prefer splurging money on “experiences,” such as eating out, rather than on products, such as clothes – would pull the restaurant business out of its funk.
That said, you wouldn’t necessary know this by walking around San Francisco. Yelp lists nearly 8,000 eating establishments in the City, many of them recent creations, including 500 cafés and 3,000 delis. A lot of the places are packed. Some can be impossible to get into on a Friday or Saturday night without a reservation days or weeks in advance. Others are nearly impossible to get into no matter when or what.
But then other restaurants are nearly empty. There has been a slew of recent restaurant closures, amid talk of a big shakeout, including something called the “Mid-Market Massacre” in an area around Market St., where restaurant after restaurant closes, done in by exorbitant rents, not enough traffic, too much competition, a finicky public that might have lost interest, and insufficient sales. So yes, it’s tough out there, even in San Francisco, in what must be one of the toughest businesses on earth.
Saturday, February 25, 2017
Batenic Calls New IGA Customer Service Initiative Key To Survival
The 2017 IGA Global Rally marked the launch of the alliance’s new goal for its 1,100 U.S. stores—to be the industry leader in extraordinary shopping experiences.
The rally, at The Mirage in Las Vegas Feb. 10-12, sought to unite attendees behind that common goal with its theme, “It’s in our DNA.”
In his speech to attendees, numbering about 500 from 10 countries, Mark Batenic, chairman and CEO of IGA Inc., said, “That’s our theme for this event, so you’re going to hear a lot about what makes up who we are. Today we’ve lost a few competitors, added a few new ones to the mix and expanded around the globe, but nothing has changed about who we are. IGA still stands for taking care of people and community, and I know that firsthand because I now spend my days seeing these community centers in action all over the world.
“…Taking care of people is what you do,” he said. “It’s the red thread that connects us all. It’s both fundamental and distinctive to who we are. And it’s unchangeable because it’s in our DNA.”
But, Batenic added, “what if we elevated taking care of people to the next level? What if we continue to support and fulfill our goals as community centers, but on top of that, we pledge to take care of people in a way that will create a better shopping experience for our team members and customers alike? What if we could create a culture—based in leadership, engagement and treating people like family—that would take our shopper experience from good to not just great, but truly amazing?
“We could be the industry leader in extraordinary shopping experience.”
It’s not an option to not get on board
In an interview with Lorrie Griffith, The Shelby Report’s editor-in-chief, the day after the Global Rally’s conclusion, Batenic spoke about how imperative it is for IGA retailers to get on board with the move toward customer service excellence.
“If (the IGA retailer) doesn’t step up and do it, he’ll eventually die,” Batenic said. “You can quote me on that. The store will go out of business if he doesn’t differentiate and doesn’t do this customer service initiative.
“We expect the store owner to step up,” he added. “The store owner has to step up and be a leader in this endeavor or…customers are going to go elsewhere.”
IGA came to the conclusion that heightened customer service was the key to survival based on research. Information was gleaned from mystery shops (done by TrendSource), online customer feedback, focus groups and discussions with retailers and their store associates.
Ashley Page, IGA communications consultant, said, “We have determined the specific behaviors that we think will deliver extraordinary shopping experiences in IGA stores. It’s not just extraordinary shopping experiences overall; these are what our IGA customers are looking for.”
IGA has been piloting the “Way to Serve” program in six U.S. stores—one on the East Coast, some in the Midwest and some in the West. Three of the retailers—Nakul Patel of Mt. Plymouth IGA Express in Sorrento, Florida; Mike Trask of Granite Falls IGA in Granite Falls, Washington; and Phil Blackburn of Martin’s IGA Market Fresh in Cashmere, Washington—were part of a panel discussing the Way to Serve initiative.
“The owners of these stores realized that they weren’t providing extraordinary customer service,” Batenic said. “They realized that they had to be part of (the customer service emphasis), that they couldn’t delegate it, and they’re committed to doing that and looking at their employees and their shoppers in a whole different way.
“But I don’t care if you’re in Florida or in California; customer service is the differentiator,” he added. “Sure, the assortment in the stores will be different, but you can’t replace old-fashioned customer service the way it used to be.”
Stores will receive training on how to implement Way to Serve through the IGA Coca-Cola Institute, in the form of webinars at the store level, as well as resources supplied through the IGA organization. The hope is that stores will appoint a “learning leader” to spearhead the training process. To be considered for IGA Five Star Retailer status, a store has to have a learning leader (about 20 percent of IGA stores have achieved the Five Star ranking).
Because the results were fairly dramatic in the pilot stores, the program now is rolling out to a larger group of stores, he noted.
But Batenic was quick to point out that this is not a program that has an end date.
“This isn’t a one-time, one-shot thing; it’s a culture change that’s going to be benchmarked, reviewed, graded,” he said. “Stores are going to have to adhere to it; we expect them to all be the same because we want that shopping experience to be the same whether they’re in Maine or California. If you can create that consistency in the way you take care of the customer in the grocery store, what a difference that would make.”
He mentioned companies that have achieved consistent customer experiences such as Ace Hardware (key trait—helpfulness) and Chick-fil-A (key trait—politeness).
“The service is the same, the feeling is the same (wherever you go). That’s what we’re trying to emulate.”
“Everybody can do price; everybody’s got ketchup, but what makes the shopping experience memorable, exciting, not tedious, and makes them want to come back? What can you do that’s unusual?”
And Batenic charged those retailers who were at the Rally to take up the cause with the IGA retailers who were not present.
“We had 500 believers in the room representing maybe 800, 900 stores, but we have 5,000 stores across the world, so we need to get to the rest of the 4,500 stores and tell them this is how it has to be so the experience is the same,” he said. “These guys have to be an advocate of the brand and they have to be our evangelists—‘evangelical change agents’ is the term we’re using.
“This is the beginning of a journey; there’s no ‘easy’ button,” Batenic pointed out. “It’s a journey that we’re on that we hope to be successful at. Quite frankly, we have to be, because if we’re not, we’ll fade.”
Friday, February 24, 2017
Organic Food Sales Are Booming; Why Are American Farmers Crying Foul?
Prices for organic grains sag, as imports flood in to fill demand
Michael Konen gets less of a premium for organic corn than previously.PHOTO: TAYLOR GLASCOCK FOR THE WALL STREET JOURNAL
Organic grain is flooding into the U.S., depressing prices and drawing complaints from domestic organic farmers who fear their harvests are held to stricter standards than foreign-raised crops.
Turkey, for instance, vaulted ahead to become by far the biggest supplier of organic corn and soybeans to the U.S. last year. The Mediterranean country in 2016 shipped to the U.S. 400,000 metric tons of organic corn, nearly quadrupling its prior-year total, while its soybean shipments climbed by more than eight times, U.S. Agriculture Department data show. Other key suppliers to U.S. organic-food companies are now Ukraine, Argentina, Romania and India.
The rising imports reflect how U.S. consumers’ appetite for organic products, which are produced without synthetic pesticides, genetically engineered seeds, and certain fertilizers, are challenging food companies to keep up. Giant meat producer Tyson Foods Inc. is the latest to eliminate antibiotics used on poultry. Other meat and egg companies like Pilgrim’s Pride Corp., Perdue Farms Inc. and Cal-Maine Foods Inc. are also expanding organic production, boosting demand for organic animal feed and prompting companies to seek corn and soybeans grown overseas. In the past year, a stronger U.S. dollar has also made foreign-produced crops cheaper.
U.S. organic-farming groups say that influx of foreign grain has been a chief factor in slashing prices for organic corn by about 30% in 2016, along with a 20% decline for organic soybeans. Those declines came despite robust growth in U.S. sales of organic foods—and far underperformed prices for nonorganic corn and soybeans. USDA-certified organic food sales in 2016 climbed 10% to $12.3 billion, versus a 0.7% increase in conventional grocery sales, according to Spins LLC. Those figures don’t include sales from Whole Foods Market Inc., a major organic retailer.
The Organic Trade Association, which estimates sales for Whole Foods and other retailers not measured by Spins, put U.S. sales in 2015 at $39.7 billion for foods containing 70% or more organic ingredients.
Some organic farmers in the U.S. contend that overseas organic farms benefit from looser oversight, giving them an edge over domestic farms. They point to past failures among foreign-based organic operations in following U.S. organic standards, and occasional cases of fraud. Now U.S. groups want U.S. authorities to step up scrutiny of organic operations in Turkey and other Eastern European countries, and provide more support for U.S. organic farmers.
“What we’re after is a fair shake,” said John Bobbe, executive director of the Organic Farmers’ Agency for Relationship Marketing Inc., a Minnesota-based organic-farming cooperative, which has filed complaints with the USDA over the matter. USDA officials say that all organic operations are held to the same standards, but the agency is investigating the complaints and discussing new requirements to tighten oversight.
Nate Lewis, farm policy director for the Organic Trade Association, representing U.S. organic-food companies and farmers, said the group has “confidence in the USDA’s system.” Still it urged the U.S. Department of Agriculture last July to require all organic imports to include certificates that allow the crops to be traced back to the overseas farms where they were grown, beyond the firm that bought and transported the crops.
Miles McEvoy, deputy administrator in charge of the USDA’s organic program, said the agency plans to propose a rule that would require such certificates for all organic imports. With the rise of organic grain production in Eastern Europe, he said the USDA is stepping up scrutiny of the region, sending an auditor to Ukraine in the fall and a team to Turkey this winter.
Organic-farming groups say those moves are long overdue, pointing to previous reports of organic fraud in Eastern Europe. In January 2016, the USDA’s Foreign Agricultural Service noted reports of “fraud or unapproved production methods” in organic products shipped from Turkey, which were documented by European and U.S. groups in 2012, 2013 and 2015. “There have also been instances where a few Turkish companies were found to have been using fraudulent organic certificates,” USDA officials wrote.
Mr. McEvoy said the USDA is also considering a separate requirement for commodity traders dealing in organic crops to also have certification under the USDA program. Critics say the lack of such a requirement leaves a gap that could enable fraud or negligence.Turkey’s Ministry of Agriculture didn’t respond to requests for comment.
Farming groups also want the USDA to do more to help domestic farmers go organic. They seek programs such as one introduced in January that helps farmers sell crops at a premium during the period that is required to transition from conventional agriculture to the USDA’s organic method.
Typically, farmers shifting to organic have to sell their crops at lower, conventional prices during that changeover period, which takes about three years. U.S. organic farmers say that competing against cheap imports has diminished the payoff from a tougher method of raising crops.
Michael Konen, who raises organic corn, soybeans and wheat on 150 acres near Sugar Grove, Ill., said that when he converted to organic farming eight years ago he was getting $11 to $16 per bushel more for his organic corn versus conventional varieties. Over the past two years, he said, that premium has shrunk to about $4 to $8, though his costs haven’t changed.
Farmer Michael Konen at his harvested organic cornfields in Illinois.PHOTO: TAYLOR GLASCOCK FOR THE WALL STREET JOURNAL
“Expansion’s definitely out of the question at this point,” said Mr. Konen.
Lynn Clarkson, president of Illinois-based Clarkson Grain Co., which deals in organic crops that are raised domestically and overseas, said that organic food’s reputation relies on strict enforcement of farming standards. “The biggest threat to organic is the loss of credibility,” he said.
