Sunday, December 4, 2016

Walmart's new gas-and-grocery hybrids could become a major threat to Amazon and Kroger

Walmart is opening a new kind of gas station that offers more than just coffee, snacks, and fuel. 
The convenience stores, called Walmart Pickup and Fuel, also offer same-day pickup for groceries ordered online.
There are only two locations right now — one in Huntsville, Alabama and the other in Thornton, Colorado — but if expanded, they could make Walmart an even bigger threat to companies like Amazon and Kroger that are betting big on the growth of online grocery shopping.
Pickup with Fuel - WalmartWalmart's new Pickup and Fuel store in Thornton, Colorado.Walmart
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The new stores offer grab-and-go items, including hot sandwiches, healthy snacks, drinks, and a coffee bar, as well as basics like milk, eggs, and bread, according to Walmart. They are open from 5 a.m. to 11 p.m. daily.
For a wider selection of grocery items, online grocery pickup is available at the stores between 8 a.m. and 8 p.m. Customers can order groceries before 1 p.m. and pick them up that same day, after 5 p.m. 
Walmart employees pick and pack the groceries at a nearby Walmart supercenter, and load them into customers' cars at the Walmart Pickup and Fuel for free.
Walmart already offers online grocery pickup at hundreds of stores. But this new store concept is meant to make that process easier and more convenient, thanks in part to the small size of the stores and parking lots. 
The concept sounds eerily similar to a new kind of store that Amazon is planning to launch. 
Amazon has plans to roll out 20 grocery stores by the end of 2018. The stores will have different formats, but half of them will likely be "click-and-collect" drive-up spots for Amazon customers to pick up their online orders — just like Walmart's new Pickup and Fuel stores.
The other half of Amazon's new stores could look like miniature versions of traditional grocery stores. 
Kroger has also been investing heavily in online grocery. The company offers online grocery pickup at more than 500 stores. But unlike Walmart, Kroger charges a fee for picking up online orders, which is about $4.95 per order in Richmond, Virginia. 

Kroger expecting slow climb from deflation

Kroger
Officials of Kroger on Thursday acknowledged they were likely experiencing the worst effects in a prolonged stretch of deflation — and expected it would come out of the rut as gradually as it went in.
As previously reported, falling prices for items like milk, eggs and cheese contributed to non-fuel identical-store sales of 0.1% during the third quarter ended Nov. 5 — Kroger’s smallest gain in that metric since posting negative comps in the second quarter of fiscal 2003.
Mike Schlotman, Kroger’s CFO, said deflation in the quarter accelerated to about 1.5% overall, from 1.3% in the second quarter. In addition, he said, comps were negatively affected by subsiding inflation in pharmacy; by an increase in relocated and expanded stores falling out of the comp base; and by more cannibalization from new stores than a year ago.
“We’re in the middle of the cycle now — and it’s not fun,” CEO Rodney McMullen remarked.
McMullen compared the current streak of deflation — now approaching a full year — to the five-month stretch of lower prices affecting grocers in 2002, saying the onset in both cases was gradual and supply-driven, as opposed to the stretch of 2009 deflation brought about by abrupt economic chaos.
That, however, portends to a gradual easing of deflationary pressures, he predicted. “The cycle coming out,” he said, “will be driven by what caused you to go in.”
Schlotman said falling prices for milk, eggs and cheese alone accounted for about a 50-basis point impact to comp sales in the quarter. And while those items, like milk, are seeing improved input costs already, they are still down as compared to the previous year.
“Milk and cheese looks like it may be bottoming, but that doesn't mean things turn around on a dime as raw material input costs change,” he said. “There's usually a lag from that bottom and a slight flip up in those costs until you start to see any effect on retail pricing.”
Kroger accentuated a few positive trends, including better tonnage results, many resulting from larger pack sizes triggered by deflation; and sales of items like sushi, wine, Starbucks coffee and natural and organic products led by its fast-growing Simple Truth brands.  “If you can drink it or snack on it, it's selling,” McMullen remarked.
Those trends are balanced out somewhat by economic concerns among consumers, he added. “Customers are telling us they expect the economy to get worse in the next three months.”
Some analysts appeared alarmed at the ID sales figure, considering Kroger said it was "near" 0.5% comps at an investor conference only days before the end of the quarter.
Schlotman however tried to put that in perspective, saying a miss when comps are running low appeared worse than the same variance would have if comps had been higher.
“It takes about $23 million of sales to move our IDs by 10 basis points,” he explained. “When you're plus or minus $23 million in a two- or three-day time frame — or even $40 million in a two- or three-day time frame — when you're at 4% or 4.5% [ID sales], it's a blip on the radar screen. When you're between flat and 50 basis points of identicals, it's a huge percentage move.”
Read More: http://supermarketnews.com/kroger/kroger-expecting-slow-climb-deflation#ixzz4Rshbv7Ah

Why Delivering Food Via Bicycle is Good For Neighbourhoods

The case for relocalizing our food system.

Bicycles never used to be thought of as central to the food system, but the Internet has allowed this particular wheel to be reinvented as a prime tool for localizing food systems while reducing traffic jams, cutting global warming emissions, and providing jobs.
This innovation comes to light on account of Uber’s recent decision to reduce the fee it provides to UberEats bicycle couriers who are paid for deliveries on a per-ride basis, much as if they were cabbies. What amounts to a reduction in the amount delivery people make for each trip has got the riders quite upset, according to the Toronto Star.
The controversy indicates how vulnerable members of the precariat are to shifts in the terms of their contract.
But there’s another issue that got revealed here, which is the transportation system best suited to strong neighbourhoods and a vibrant and resilient food system.
Uber, to its credit, figured out how to reconfigure urban food delivery with bicycles, and thereby go “back to the future” as the way to solve the thorniest problem of logistics, known as “the last mile.”
Bringing coffee, the second most traded commodity in the world (after oil), from Ethiopia or Colombia to Toronto is no longer a big deal in the food logistics industry. It’s all handled by cranes and boxcars that move very swiftly on sea lanes, railways, and super-highways.
The trip that’s a real killer from a space, energy, and hassle point of view—even worse than the short trip from the local warehouse to the local retailer—is the brief car trip from the customer’s residence to the retailer and then back home again.
The longest and worst mile per unit of weight, energy, air pollution, clogged road space—you name it—is the last one that the consumer makes.
Those trips add up. It’s commonly estimated that one in five car trips in a city is to do food shopping. If you want to calculate the embodied energy involved in moving food, the energy to move a two-ton car four miles to bring back 10 pounds of groceries is by far the most polluting trip any grocery item from anywhere has ever been on.
Resolving that problem with cycling couriers takes a lot of cars, a lot of traffic jams, and a lot of fuel emissions off the road. We can park a lot of problems if we manage food pick-up and delivery with the clean, renewable human energy of cyclists and walkers.
Being of a certain age, and having grown up before people automatically assume there is an electronic app that can solve every problem, I spent a lot of my career in food policy encouraging planners to reinvent the neighbourhood main street, so that the last mile could be reduced to a few blocks and become a walkable trip.
Putting food stores and restaurants back on main streets that are walking distance from densely populated neighbourhoods could be good for many reasons: good for fitness, getting to know neighbours, and building neighbourhood cohesion, which in turn is good for child safety and local response to emergencies.
To give Uber its due, the idea that the Internet could solve the last-mile problem by providing a virtual electronic highway that displaces short car trips never occurred to me, or the many city officials who told me to get lost.
Computer networks intervene at the very point when big vehicles become the least efficient way to move food, and bicycles become the most efficient way. That’s a mini-revolution in food logistics.
We need to find a way to thank Mr. Uber for this. Perhaps someone could name a bicycle trail in the company’s honour. Or better still, a bike delivery co-op, which might perhaps be named Uber My Dead Body.
But a global corporation should not be allowed to take 35 per cent of the fee for the delivery, or have the monopoly on how to turn this application of the Internet, and all the publicly funded airwaves and bike lanes that make it viable, to its exclusive control and profit.
Bicycle couriering of food has the potential to be a service that is loaded with public benefits.
It makes it possible to end the mess of problems caused by the 1950s mistake that still lingers on—allowing supermarkets to be placed just far enough away from their customers’ place of residence to require a car trip, with a catchment area that allowed supermarkets to do bulk-buying on behalf of customers from several neighbourhoods, and thereby squeeze out main-street retailers who were a walk away from home.
A supermarket's produce section. Photo by kaeko from the Torontoist Flickr Pool.
A supermarket’s produce section. Photo by kaeko from the Torontoist Flickr Pool.
That’s the “efficiency” that gave supermarkets control over city food sales, and led to an explosion of supermarkets in plazas and malls during the 1950s and ‘60s, creating a crisis for mom-and-pop businesses on main streets.
Fast food retailers repeated the formula during the 1960s and ‘70s, which is why they’re also located away from neighbourhood-based main streets, and in no-man’s-land areas where there are seas of free parking accessible to neighbors from all directions, thereby gaining access to a mass of customers who can be wooed with lower prices for standardized food.
The good old city planners who allowed this transformation in the location of food outlets made car trips essential to buying groceries and getting a restaurant or take-out meal. Now that half of all meals are eaten outside the home, and many trips to the supermarket are no longer a weekly outing for the family but a grab-and-go for a few days’ snacks, there’s been an explosion in car use within the city.
Incredible contradiction: the efficiency of the city is that it brings many people in close contact with many services and personal relationships, but transportation and mall planners totally undermined that by distancing food shopping from residential neighbourhoods.
The city was made for walking and cycling, but the placement of supermarkets and low-cost food take-outs outside of neighbourhoods’ reach made routine trips dependent on cars.
City food systems became fossil fuel-dependent.
And the extra car traffic accounts for traffic jams that cost a city like Toronto over $6 billion a year in time wasted driving one mile per hour, about a third of the speed of a walker and a tenth of the speed of a cyclist—both of whom leave the air pure, while making themselves fit.
Huge amounts of civic space are also eaten up by cars, since most cities devote a third of their space to pavement oriented for cars. Giving cars this monopoly of space makes it virtually impossible to allocate sufficient space for gardens and greenhouses that could grow food for cities literally in neighbourhood backyards.
Sigh. All these externalized costs that no one ever thought to watch for when cities were designed for cars.
With a little bit of uberhaul, we can convert electronically dispensed bike trips through a co-op, which ensures that cyclists are paid a wage that gets them through school, or started on a new and creative career, which we very much need in cities dependent on the knowledge economy.
And that can be done by organizing a co-op for cyclists, or rather a series of co-ops for each area of the city, as we relocalize the food system, both in terms of bringing it close to where people live and in terms of optimizing the number of decent and secure jobs providing food.
To be resilient, cities need to localize as many services as possible to make them independent of outside control when it comes to the basics of life.
Getting access to food is one of the basics, and the means of doing that should be as localized as the food and companies that get it customer-ready.
The last mile needs to be in the hands of the people who live there.

Thursday, December 1, 2016

A restaurant-less food delivery startup beloved by tech investors delivered 1 million meals in a year

mapleMaple's Thanksgiving hero sandwich. Maple
If you live in a big city like New York, you have more than a few options when it comes to enjoying a quality meal: you can try one of the dozens of restaurants in your neighborhood (and the hundreds outside of it), order takeout, or attempt to cook up something yourself. 
But with each of those options, you're likely sacrificing at least one element you value, whether that's time, effort, or quality of food. 
That is, at least, the idea behind Maple, a food startup that launched delivery to select neighborhoods of Manhattan in April 2015. It's different from other food-centric companies, though, in that it makes its own meals in a restaurant kitchen that's not actually attached to a physical restaurant. 
"The entire city is our dining room. Think of it as building out blocks and blocks of seating," cofounder and COO Akshay Navle said. "The reason delivery makes sense is that we can reimagine what this restaurant looks like, and we can make use of all of this free real estate: your house."
Maple has a preset menu for lunch and dinner every day of the week, excluding Saturdays. Meals can be ordered on Seamless, Maple's homepage, or on Maple's app, which is available on both iOS and Android. Each meal is whipped up by line cooks in one of the startup's five kitchens before being handed over to a delivery person who brings it to its destination. 
The emphasis is on high-quality ingredients sourced from farmers and other suppliers that Maple can independently verify are trustworthy. It sources tomatoes from a local New Jersey farm, cheese and apples from upstate New York, and salmon that's tracked from the moment it was caught. Most lunches cost $12, including delivery, though the sushi, sashimi, and poke bowls cost more. Dinners are priced in the $15 to $17 range, also including delivery.
"Because we own the entire process, we have more margin to go around than a traditional restaurant," Maple cofounder and CEO Caleb Merkl said to Business Insider. "That means we can put that money back in the quality of food that you get."
In the year and a half since launch, Maple has expanded its delivery zone to include five square miles of Manhattan, and it's reached a milestone of one million meals delivered. The startup's five kitchens are intentionally situated so that they each serve an area within the radius of between a mile and a mile and a half. As the company scales to open up additional kitchens, it can further expand its delivery zone.
mapleExecutive chef Soa Davies in one of Maple's kitchens. Maple
"We needed to be physically close enough to our customers to be able to put something in the oven in the kitchen and ... still have it be hot by the time it arrived," Merkl said.
A main commissary kitchen in Brooklyn does a lot of the heavy prep work, like chopping thousands of pounds of carrots, to name one example. To coordinate the timing perfectly, Maple has built out a proprietary tech stack that gets smarter as it goes along.
"It's the heartbeat of our system," CTO Dan Cowgill said. "The infrastructure is based on collecting as much data as possible: where riders are, what they're carrying, what's currently being cooked in the kitchen. And that situation is constantly changing."
The system has now collected data about enough buildings in New York — almost 10,000 at this point — to know how to bundle orders for the most efficient delivery. Cooks and packers in Maple's kitchens interact with iPads to prioritize their work.  At this point, Merkl says, the company's artificial intelligence makes these decisions at a higher level than a human could. 
"If I know that I have 70 delivery guys out in this zone, and I know exactly how many bundles they each have, I know what the ride time to each of those buildings is, and whether or not it's a doorman building where you can just leave the meal with the concierge, you can say here's the first guy who's going to be back and the minute he'll be back, and that informs the minute the cook starts cooking," Merkl said.
Says Navle: "What we try to do is make sure that no food is sitting around. If a delivery guy is walking in, it makes sure that there's food ready for him to take out. It decides to do something based on it knowing when the next delivery guy will show.  If it knows a dish takes six and a half minutes to make, it knows it needs at least a seven-minute lead time before the next delivery guy shows up."
A dish has to pass more than 20 steps before it can earn a spot on the rotating menu, and even after that, the culinary team is constantly refining a dish once they know how popular it is with customers. Even when something is a hit, the team will continue to develop different versions until they create what they feel is its very best iteration.  
"At the beginning, as we discussed the menu and dishes we would include, it was kind of a free-for-all," Maple's executive chef, Soa Davies, said to Business Insider. "We looked at things as they were delivered and noticed, OK, that ingredient doesn't work, stews can't work in this packaging, that lettuce doesn't last, some foods lose temperature more quickly than others."
maple"When you're doing delivery, you lose the aspect of plating, so we wanted to be sure it could still be presented well in the box," Merkl said to Business Insider in 2015. Maple
Davies previously worked in research and development at the three-Michelin-starred restaurant Le Bernardin. Though the stakes were sky-high at Le Bernardin, she found a completely different challenge at Maple, where the culinary team has now developed more than 900 meals.
"At Le Bernardin it was all about refinement, how it looked on the dish. We could work on one dish for six months before it went on the menu," she said. "At Maple, we collaborate palettes. It's supposed to be food for everyone, and we try to be as democratic as possible."
After you enjoy your meal, the Maple app gives you the option to rate the experience out of five stars, as well as give more concrete feedback. What the team has found is that people are really opinionated when it comes to food. 
"They want to engage one way or the other. They'll say, 'This was the worst meal I've ever had' for all of these reasons," Merkl said. "And then we've had people write love poems to Maple." 
Maple then uses that feedback to develop additional menu items like sushi, desserts, beer, wine, and a roster of custom salads that they're currently rolling out to delivery zones in stages. It's also planning on introducing the ability to swap out sides.
The team tries to create a well-balanced mix of items to choose from, both healthy and less so. On any given weekday lunch menu you'll see things like a tofu and soba noodle bowl, a spiced chickpea and chicken salad, a roasted turkey sandwich, and black bean and cheese enchiladas. If a meal is less popular than expected, they'll adapt it to be more in line with what people want. 
Some interesting trends have emerged.
"Sandwiches are really weak on Mondays and get stronger and stronger throughout the week. By Friday they're really popular," Merkl said. " I think people — whether they're on a low-carb diet or whatever — come into Monday and it's like a mini New Years' resolution that kind of falls apart throughout the week."
Unlike some other popular companies that specialize in on-demand services, all of Maple's workers are W2 employees, from the line cooks to the delivery people to the engineers. Everyone who works more than 30 hours a week also gets access to healthcare. 
"Our delivery people are the one physical interaction we have with our customers. The thing with W2 employment is that you can provide training, you can provide a uniform," Merkl said. "It also just felt like providing health care was something we should do."
Maple raised $22 million in Series A funding in March 2015. Greenoaks Capital led the round, with contributions from Thrive Capital, Primary Ventures, Bonobos CEO Andy Dunn, and Momofuku founder David Chang. It had previously raised $4 million in seed funding in November 2014. 

Dollar General's Startling Admission: Half Of U.S. Consumers Are Feeling More "Dire" Than Ever

Tyler Durden's picture
When we last looked at the performance of deep discount retailer Dollar General three months ago, we found something troubling: company CEO Todd Vasos, who badly missed its earnings expectations, admitted on the Q2 conference call that he was surprised to admit that while on the surface things are supposed to be getting better, the reality is vastly different for low-income US consumers:
I know that when we look at globally the overall U.S. population, it seems like things are getting better. But when you really start breaking it down and you look at that core consumer that we serve on the lower economic scale that's out there, that demographic, things have not gotten any better for her, and arguably, they're worse. And they're worse, because rents are accelerating, healthcare is accelerating on her at a very, very rapid clip.
Making matters worse, he added that the company's core consumers base, 65% of which is comprised of lower-income shoppers, has been impacted by the recent reduction or elimination in foodstamps: "now couple that in upwards of 20 states where they have reduced or eliminated the SNAP benefit, and it has really put a toll on [the core consumer]."
He elaborated that the reduction in foodstamps benefits promptly filtered through the entire business model, and culminated with Dollar General being forced to cut prices to remain competitive.While America's poorest where pressured on one side by declining foodstamp benefits, on the other they were getting hit by rising rental and healthcare costs: 
"[The] core consumer, I tell you, has gotten no better as far as her economic well-being. Matter of fact, she tells us, while we're out in the stores or even through all of our panel data that we do, that while things haven't gotten a lot worse as far as income coming in, other than the recent SNAP decrease, my expenditures are going up at a very rapid rate. Healthcare is one of the big ones, because most of our consumers, while she may be working, doesn't have healthcare, and we all know that she's having to now pay for this healthcare or be taxed on it, right? So that is starting to really play against that low-end consumer right now, and it will continue to play against her. You couple that with those rents that we talked about, those increased rents are real, and in many parts of where we serve our customer, the affordability and availability of rental units are getting more and more scarce, which is driving up prices. And we're seeing that because most of our core customers cannot and do not own their own homes."
But the one statement from Vasos that revealed just how bad the situation truly is for much of America was the following: "I've been out in stores in the middle of the aisle and heard customers come up to our store manager in tears and thanking them for being there and thanking them for the prices that we offer in a real convenient nature for her, where she can walk to the store, because she can't afford anything else. When you hear that, that really brings home where this core customer is."
Fast forward to today when after last quarter's abysmal results, and after after two consecutive quarters of slowing sales, Dollar General once again missed expectations across the board. The dollar store reported that earnings came in at 89 cents a share, falling short of Wall Street forecasts for 93 cents a share; sales rose 5% from the prior year to $5.32 billion, missing analysts estimates for $5.36 billion. The deterioration was the result of an ongoing decline in same store sales, which dropped by 0.1% in the quarter, missing consensus estimates of a 0.8% rebound, even as the company cut prices: gross margin declined from 30.3% a year ago to 29.8%, missing estimates of 30.2%. Finally, the company reduced its profit outlook for the year, saying earnings would come in on the low end of the 10%-15%  long-term growth range, and below Wall Street estimates pg 13%.
There were several reasons for the disappointing results, one among which was the company's latest failed attempt to boost traffic by lowering prices, which while leading to the latest (already razor thin) margin decline, failed to materialize in an increase in same store sales. One can blame that on further industry-wide discounting as the race to the bottom accelerates. "There is evidence Walmart has lowered food prices in certain categories, which likely pressured Dollar General - we note that Dollar Tree is impacted less by this as it has a more discretionary product mix," points out Barclay's analyst Karen Short. "We believe Dollar General's initial price reductions were likely introduced more broadly in the third quarter, potentially pressuring results in the near-term," Short added.
But the biggest factor by far impacting the performance of the dollar store, was the continued adverse turn in the purchasing power of the lower half of US consumers: according to Dollar General's executives, the company's core low-income consumers continued to feel pain, weighed down by higher health-care bills, rising rents and cuts to federal food stamp programs, in other words the very same things the company lamented last quarter.
Which is surprising.
As the WSJ notes, over the past decade, dollar stores benefited from robust growth spurred by cash strapped consumers suffering from the recession and postrecession malaise. "That picture could be starting to change. Low income wages are increasing and competition for hourly workers is increasing."
Which would be great if it were true, because that particular version of reality presented by the Bureau of Labor Statistics seems to conform with what is taking place in the real world, where Dollar General’s shoppers aren’t feeling flush, said the CEO.
And just to avoid putting words in his mouth, this is what Todd Vasos said during today's Q&A, when a Morgan Stanley analyst asked him if he can share "any further color around the low-end consumer health" and how it differs from what the company noted last quarter versus the latest observations. This is what Vasos replied:
Interestingly, we talk to our consumers each and every quarter through panel data as well as we bring them in and talk to them in general and I can tell you as late as mid third quarter, they were telling us that their sentiment - feeling - is even more dire than it was in previous quarters in early 2016What they're citing and continue to cite is the rising healthcare costs that they're facing. I don't believe any of our core customers realized what they were up against on those rising costs. And then rental costs continue and they call that out second on paying rent because most of our, again, core customers rent, don't own and those rents are going up across the nation at a pretty high rate. 

So we're hearing a lot of the same things we've heard over the last couple of quarters but what was interesting to us was that she was feeling worse off today, middle of the third quarter, than she was earlier in the year.
We go out and talk to the customers each and every quarter, and again I believe that the majority of what we are communicated to everyone earlier in the year pretty well is still well intact as far as the consumer is concerned except for the notion that she may be a little worse off today economically than she was even earlier in the year.
His response, we hope, clarifies any residual confusion about how the lower half of the US consumer class is doing these days.


Why grocery retailers are embracing rooftop gardens

Stores redefine hyperlocal by growing produce on the premises

The food industry as a whole is in the midst of a shift from unhealthy processed foods to organic, local and all natural foods. Buying local is one of the biggest trends, as more consumers want to ensure that the produce they  are purchasing and feeding to their families is grown nearby. 
This consumer behavior has led to an influx of urban greenhouses, rooftop gardens and hydroponic operations. Businesses and retailers are getting the message loud and clear: people prefer to buy foods from their own communities — even if it means spending a little more.
Daniel Levine, director of consumer trends consultancy Avant-Guide Institute, noted the trend is so pervasive that edible gardens are sprouting up at baseball fields like AT&T Park in San Francisco. Beehives are also being placed on roofs of hotels and other buildings in cities around the world, and urban rooftop algae farms in Bangkok are experimenting with growing edible items like spirulina seaweed.
“The trend for all things ‘hyper local’ is heating up. Consumers perceive that food grown locally is fresher, healthier and better for the environment,” Levine told Food Dive in an email. “People view it as healthier because they can actually see where it was grown. Fresher because, well, it can literally be consumed the day it was picked. And better for the environment because it doesn't require excessive transportation or packaging to get from farm to table.”

Store to table?

Ken VandeVrede, chief operating officer of Edible Garden, a family of co-op local growers across the United States whose farmers specialize in fresh, hydroponic produce and offer consumers safe, nutrient-rich herbs and leafy greens directly in the supermarket, noted local is getting closer and closer to home.
“Edible Garden grows fresh and local produce for supermarkets, and we find that a major component to our success is the fact that our produce is grown just a short distance from the stores that we ship to,” VandeVrede told Food Dive. “Local produce has nothing but benefits for consumers. Produce grown locally guarantees that the product is fresh, it wasn’t grown in a different country, and that it hasn’t been sitting on a truck for a week. Would you rather buy produce shipped in from Mexico, or produce that was grown at or near the location you are buying it?”
peppers from grocery store rooftop garden
 
 
Some innovative grocery retailers are taking things one step further and are growing produce in their own stores— or in the case of Whole Foods Market and its Gowanus Brooklyn store, growing it on the roof.
Designed and operated by Gotham Greens in 2013, the store's rooftop greenhouse features more than 20,000 square feet of space and grows approximately 250,000 pounds of fresh leafy greens, herbs and tomatoes each year.
A spokesperson for Gotham Greens said the partnership with Whole Foods Market was a perfect match for the company based on the retailer's unparalleled leadership and commitment to promoting local, healthy and sustainably produced food.
Levine said rooftop gardens are shining in their moment in the sun, and that retailers need to be on-trend to attract customers and keep a step ahead of their competition.
“Today’s grocers, once again led by Whole Foods, are enthusiastically embracing the hyper-local trend as a point of differentiation,” he said. “At the same time, the best ones are solidifying their position as integral members of their communities by inviting customers to learn about the how’s and why’s of urban farming.”
Considering the long journey that most fresh produce has to get to the store and the high level of spoilage, shrinkage and waste in retail produce departments, growing at least some of the food right on the sales floor might be a better option for both the store and its customers.
Recently, Target announced it was researching the idea of vertical farming for some of its stores as part of its current food innovation efforts. Business Insider reported that Target hopes to grow plants and vegetables indoors in climatized conditions and sell the food from the in-store gardens to customers as early as next spring.
“We need to be able to see more effectively around corners in terms of where is the overall food and agriculture industries going domestically and globally,” Casey Carl, Target’s chief strategy and innovation officer, told Business Insider. 

What transportation costs?

By utilizing this sustainable and environmentally friendly technology, things like transportation, storage and refrigeration are no longer challenges in getting fresh produce quickly to consumers.
Whole Foods was not the first grocery store to experiment with growing produce in-store. Rouses Supermarkets' Thibodaux, LA store began a Roots on the Rooftop program in May 2012. It offered fresh-grown herbs to its customers and foodservice production areas — and also grew profits.
rooftop garden at rouses supermarkets
 
 
Rouses also appears to be the first U.S. grocer to have developed its own aeroponic urban farm on its rooftop. The vertical aeroponic tower garden utilizes water rather than soil, and allows the crops to grow up instead of out. It was developed by a former Disney greenhouse manager, and the same system is used at Disney World, Chicago O’Hare Airport and on the Manhattan rooftop of Bell Book & Candle restaurant. 
The store originally employed a local agriculture consultant to get everything set up properly. Now the store’s staff — headed up by an experienced horticulture professional and a team of associates — handle the rooftop garden. According to a company spokesperson, the Rouses team plans the farm management process from germination of the upcoming crop, planting, daily monitoring and logging of the crops progress through to the harvest cycle.
Rouses currently has alliances with a handful of other nearby hydroponic farmers who grow lettuce and herbs, saving on transportation costs. 
Earlier this year the Metro Supermarket in Berlin, Germany introduced The Infarm, a miniature greenhouse in its store that grows herbs and greens like wasabi mustard greens and mizuna. A story in Fast Co.Exist reported that the thought behind the idea was to make vertical farming and fresh produce accessible to the public by allowing shoppers to grab vegetables straight from the source. The vegetables live their entire growth cycle within the greenhouse, from seed to harvest
It’s expected that the program will expand and can be adjusted at each store to grow a variety of items, including chilis, eggplants and tomatoes.
Mary Holmes, who teaches a course called “The Future of Food” at Case Western Reserve University, located in Cleveland, Ohio, said one challenge is that many of the greenhouses and rooftop gardens won’t have enough supply to keep the large grocery stores stocked with food. However, she does feel more retailers will begin offering these products in the years ahead.