We visited the regional chain that beat Trader Joe's for the title of best grocery store in America — here's what it's like

• Hollis Johnson and Kate Taylor

 

Hollis Johnson
The best grocery chain in the US is one that most Americans have never visited.
In fact, Wegmans, which has fewer than 100 locations, gets thousands of calls per year from people begging for a store to open in their hometown.
Wegmans has ranked number one in Market Force Information's annual survey of the best grocery stores for the last two years thanks in large part to its loyal fans.
But we, like many other Americans, had never been to a Wegmans, so on a recent trip to Charlottesville, Virginia, we knew we had to visit one.
Here's what it was like:

Driving up to the Wegmans in Charlottesville, Virginia, it was immediately clear that this wouldn't be a normal shopping trip.

Hollis Johnson

The impressive attributes of the store shouldn't have come as a surprise. Wegmans was voted the best grocery chain in the US in 2017, based on Market Force Information's annual survey of the industry.

Hollis Johnson

 

It was when we walked into the store, however, that we realized Wegmans isn't just large — it's a behemoth.

Hollis Johnson

According to the company, locations stock up to 70,000 products. That's a ton, compared to the slightly more than 40,000 products that the average supermarket stocks, according to the Food Marketing Institute.

Hollis Johnson

 

Unlike Trader Joe's, which keeps prices low with minimalist locations and almost exclusively selling in-house brands, Wegmans is all about variety.

Hollis Johnson

Wegmans features spacious aisles full of everything from paper goods to champagne.

Hollis Johnson

 

The stores sell both Wegmans' brands — which tend to be less expensive — and pricier options.

Hollis Johnson

While it's not as budget-focused as chains like Trader Joe's or Kroger, Wegmans isn't completely devoid of deals.

Hollis Johnson

 

Comparing prices between Wegmans and a nearby Kroger revealed that eggs and tomatoes were evenly priced, and bananas were actually cheaper at Wegmans, where they cost 49 cents a pound, compared to 59 cents a pound at Kroger.

Hollis Johnson

Family-sized packaging also helps cut down on costs.

Hollis Johnson

 

Wegmans' wine store highlights the company's dedication to variety, providing options for both the discerning drinker and the budget-minded boozehound.

Hollis Johnson

The Charlottesville Wegmans sells everything from a $42.99 bottle of Veuve Clicquot to a selection of wines for just $6.

Hollis Johnson

 

The grocer makes an effort to highlight local brands, including beer from Goochland, Virginia's Lickinghole Creek brewery to wine from the nearby Trump Vineyard.

Hollis Johnson

Another major perk of shopping at Wegmans is the prepared food.

Hollis Johnson

 

Wegmans fans praise the store's ready-to-eat section and, seeing the options from chicken wings to sushi, it's easy to understand why.

Hollis Johnson

The store even has a "pub," complete with happy hour specials, perfect for thirsty shoppers.

Hollis Johnson

 

The experience of grocery shopping is increasingly crucial for companies, as ecommerce makes shopping more convenient and chains like Whole Foods add in-store bonuses like restaurants and bars.

Hollis Johnson

However, few grocery chains have successfully made shopping as enjoyable — even aspirational — as Wegmans has. After visiting a store, we understand what these cultish customers see in the brand — and are ready to go back for more.

Hollis Johnson

Independence Day

Breaking Up With Amazon Prime Isn't Hard To Do, According To 35 Million Shoppers

 Opinions expressed by Forbes Contributors are their own.

Pam Goodfellow, Contributor

 

  

With Amazon’s planned acquisition of Whole Foods signifying another step forward in its path to retail domination, one must ask: who isn’tenamored with Jeff Bezos & Co. at this point? With all due respect to Amazon, it seems that plenty of people are willing to pass on Prime. New analysis from Prosper Insights & Analytics reveals that while Amazon Prime memberships continue to grow, an estimated 35 million consumers have quit Prime – and are looking to competitors for their shopping needs.
On the plus side for Amazon, according to Prosper’s June 2017 survey of more than 7,000 U.S. adults, interest in Prime is alive and well with 44% of consumers confirming memberships, rising more than 30% from a year ago and reaching a new high. However, among the remaining 56% who are non-members, one-quarter – about 35 million shoppers – admit that they have had Prime at some point in the past. Three out of four (78%) of those who have broken up with Amazon Prime were simply flirting with a trial membership while the remaining 22% had invested in a paid subscription.

One-quarter of those who aren't Amazon Prime members previously had a membership. Most had a trial subscription.

As one might expect, the minimum $99 expense of Prime (more for those making monthly payments) was the clear reason shoppers gave the heave-ho to their memberships. Some ex-Primers simply stated that they couldn’t afford the rate or saw it as an unnecessary expense, while others weren’t buying enough to justify the cost or didn’t find value in the other perks which are part of the Prime package, such as video and music streaming.

 

Indeed, the latter reasoning is justified by the fact that free two-day shipping is the major driver of Prime sign-ups. Prosper’s consumer research indicates that more than nine out of ten current memberssubscribe to Prime for the shipping incentive, while about half are motivated by access to Amazon Video streaming. Significantly fewer cited other benefits – Prime Music, early access to Lightning Deals, Prime Reading, Audible listening, or Prime Photos – as reasons to invest in Prime.
Here’s the real rub for Amazon, though: the online giant’s relationship with ex-Primers isn’t quite so “sticky” after break-ups. Prosper’s Composite Shopper Preference Index (an aggregate of the major merchandise categories in which a particular retailer competes) reveals that former Prime members are 23% less likely to shop Amazon than adults in general, and instead show an above-average preference for competitors Target and Walmart.

 

What’s compelling about our Shopper Preference Index in this instance is that these figures have been benchmarked to shopping trends among adults in general, leveling the playing field in terms of these retailers’ sizes, merchandise offerings, and locations (i.e. digital and physical stores). Put simply: ex-Prime members are just not that into Amazon.

Propensity of select consumer segments to shop Amazon, Walmart, and Target compared to U.S. adults.

Naturally, current Prime members are carrying on a love affair with Amazon with a Composite Index scoring 62% higher than average. These shoppers aren’t so keen on Walmart (at 15% below average); however, they still exhibit above-average tendencies to shop Target. And not surprisingly, loyalty to Amazon is lowest among shoppers who have never had Prime; instead, they tend to favor Walmart.
Despite their break-ups, about a quarter of former Prime members indicate that they are considering reconciliation with Amazon. Most of these shoppers are considering re-upping their Prime memberships in the next six months or so, just in time for the all-important holiday shopping season.
Pam Goodfellow is Principal Analyst for Prosper Insights & Analytics™, global leader in consumer intent data serving the financial services, marketing technology, and retail industries.

Whole Foods to Open 1st NJ 365 Store

Location will debut in fall 2018

June 30, 2017, 03:42 pm

The 365 by Whole Foods Market location in Cedar Springs, Texas

Whole Foods Market has broken ground on a small-format 365 store on the waterfront in Weehawken, N.J., the grocer’s first store under that banner in the Garden State, according to a published report.

Slated to open in fall 2018, the value-focused store, at just under 33,000 square feet, will be part of the city’s Lincoln Harbor project, a residential, office and retail complex next to the light rail station, and will employ more than 200 full-time workers, The Record, of Bergen County, N.J., reported.

Although the grocer revealed last January that it would build a 365 store in Brooklyn, N.Y., no opening date has been set, meaning that the Weehawken location will most likely be the first East Coast 365 store to open.

Since introducing the concept in 2015, Austin, Texas-based Whole Foods has rolled out four locations to date, in Los Angeles; Oswego, Ore.; Cedar Park, Texas; and Bellevue, Wash., with a fifth store opening soon, in Pico, Calif., and 17 more stores, including the Weehawken and Brooklyn locations, in the works.

Whole Foods already operates 17 of its full-size stores in New Jersey.

PetrovVadim/iStock/Thinkstock

MAC attack on retail

Lidl and Amazon didn’t throw the Frisbee, they just touched it

Jon Springer | Jun 30, 2017

 

 This post is part of the 10 Items or Less blog.

Change in the grocery business is typically gradual. Building a new store takes years. When prices move it’s usually months before the evidence shows up on the store shelf. Nobody wakes up one morning and shifts all their buying from convaentional to organic; branded to private label; ingredients to prepared; or in-store to on-line all at once, and no two shoppers are making those decisions at same rate. And few things move as slowly as a retail operator in a downward spiral, as we’ve witnessed for the better part of a decade with Marsh Supermarkets, which only now is reaching its final chapter.
What happened over the course of 24 hours June 15 and 16 — the opening of the first Lidl stores and Amazon’s announcement of a deal to buy Whole Foods — were a long time in coming themselves and neither event alone triggered change overnight, panicking stock traders notwithstanding. Ten limited assortment stores over a 400-miles radius isn’t a bomb dropping; it’s a typical week for Dollar General. And all Amazon is going to get, at least at first, is a prestigious but troubled brand with relatively high costs, a same-store sales problem and price-perception issues, speaking of things that are subject to a stubborn pace of change.
But what those two events did was something Frisbee players would call a MAC – or a mid-air correction. The path of a flying Frisbee is pretty easy to predict until someone bats a hand off it: It’s still flying, but its speed, spin and direction are suddenly very different.

 

What Lidl and Amazon did was alter the trajectory of change by influencing the long-term shifts underpinning them, and that little tap, many believe, is a sudden and very big change. By going from concept to reality, Lidl is doing more than adding yet another small-store price-focused competitor in its markets, it is influencing the economics of the shift to private label. Amazon-Whole Foods in the meantime represents an explosive development in the ongoing move to e-commerce by directly involving the largest e-tailer of all goods in the physical space for food while marking a historic milestone in the ongoing trend toward consolidation and foretelling meaningful pricing action at Whole Foods. That too could have effects of its own.

Private-label profit pirates

In a note to clients published this week, Wolfe Research analyst Scott Mushkin argued that Lidl and its hard-discount counterpart Aldi are doing more than speeding the expansion of private label assortment among peers: They are also likely altering how profitable private label can be for them.
In Virginia Beach, where Lidl opened one of its first stores, prices on private label items at a Walmart store — presumably to get in range with its new competitor — were some 25% lower than the same items at a Walmart in Connecticut, where hard-discounters have a smaller presence, Wolfe’s price checks showed. And because hard-discounters due to their efficiency and volume get by with a lower gross margin for private label items — Mushkin estimated 25% for hard discounters, vs. 30% for Walmart typically — the latter in order to maintain profits would need to sell 60% more volume on a per item basis.
“While our estimates may not be exact, we believe they provide a reasonable framework of how difficult it will be for Walmart, as well as others, to grow volumes in order to hold gross profit dollars,” Mushkin wrote. “We believe as Lidl opens more stores (and so too does Aldi) Walmart will likely be forced to lower private label pricing in other areas, and this will put more and more pressure on the business.”

Amazon may also bring price pressure

It’s anyone’s guess how the combination Amazon’s technology and Whole Foods Market’s assets ultimately play out. For all I know, 365 stores might look like Amazon Go, or the other way around. Whole Foods stores might become mini-delivery-hubs or the best place to shop for Fire TVs. But there’s few who don’t expect Amazon won’t apply the same aggressive posture on pricing for food as it has in other categories while growing its empire.
“We believe Amazon will price aggressively to gain market share in the food retailing business,” Mickey Chadha, VP of Moody’s Investors Service, said this week. “Competitors will have to respond and this in turn will lower margin and profits in the sector due to the fixed cost nature of the business.”
Moody’s on Friday lowered its profit forecast for the entire supermarket industry in 2017, saying Amazon’s pending acquisition of Whole Foods could easily wipe out benefits of a return to price inflation. Moody’s now expects the sector to show 4% to 5% profit growth this year, vs. a previous expectation that 7%-8% profit growth was in reach.
“As demonstrated by Kroger’s latest quarterly results, pricing pressure is already increasing from the likes of Walmart and discounters like Aldi and new entrants to the market like Lidl,” Chadra added. “The combination of Whole Foods’ brand and Amazon’s digital capabilities has the potential of creating a strong competitor in the industry. Supermarkets will now have to contend not only with competition among themselves and non-traditional grocers like Walmart, but also with the likes of Amazon, which has the financial capacity to price aggressively. This will also force supermarkets to invest more on their own technology platforms and capabilities, which in turn will pressure profits further.”
In other words the Frisbee is still flying, but in a whole new direction. 

Hema market Pudong, Shanghai (S.Joly)

Alibaba wants to change the way we shop for fresh food off and online…

• Published on June 29, 2017

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Stephane Joly (周庭威)

ALTAVIA GROUP Executive Vice-President

Here comes Hema Market (盒马集市) !

Despite its US $ 150 Million investment Alibaba has been quite low-key running the Hema Markets chain…

Hema Market (盒马集市) is a rather premium, fresh offline chain here in Shanghai that refuses to label itself as a “supermarket” but rather as an “e-commerce experience store”. 

Hema Market is like an expanded version of C!ty'super (premium supermarkets). Its main focus is fresh food and dry grocery.

Main features of the Hema stores:

1. They are Cashless…(cash looks like a dying king)
2. One can only pay with Alipay
3. The stores are used for pick-up for online delivery within the same day only and as fast as within 1 hour. 
4. The Hema APP has to be downloaded for starting shopping online.
5. Digital price tags are installed in store for an efficient pricing

A little bit of background info: Hema (“盒马”) is a homophone and wordplay of hippo (河马), replacing “river” with “box” --a name associated with other members of the “Alibaba Zoo” (previously they've rolled out Tmall -- cat, Alitrip -- pig, Antgroup -- ant, etc).

In early 2016, Hema made the transition from fresh food e-commerce and food delivery to offline markets. They opened their stores in places that are a bit further away from downtown Shanghai. This latest store opened a couple of months ago, located in the busy part of Pudong, underneath the shopping complex Shanghai Bay.

The Hema Market could be divided roughly in two parts:

Part one: Classic supermarket with dry food (imports and local), pre-packed fruits and pre-packed veggies, dairy, beverages… To be noted that he store has installed the digital price tags… 

Part two: Third party food and beverage consignment like many food courts that we can find in China. Shops were busy this lunch and quite premium.

Hema employees can be seen taking and processing orders from online shoppers. They're selecting items, packaging them, and sending them off to the delivery department using conveyor belts. 

According to some of my colleagues here, they tried Hema delivery and were all satisfied with the prices, efficiency of delivery and quality of the goods they ordered, which for fresh goods is a deal breaker.

Interesting to see how clients are accepting these cashless stores, interesting to see Alibaba keeping investing on the offline retail... #makeretailgreatagain..

Written by Stephane JOLY, Shanghai, Altavia Asia

The World's Food Supply Depends On 14 Critical Chokepoints, Says New Report

Jonathan Webb ,  

 

Chatham House has identified 14 'chokepoints' in the world food supply chain

A new report has found that global food supply chains are highly vulnerable to disruption, price spikes and uncertainty.
The London-based Chatham House, a strategy think tank, has analysed the world’s food trade routes and has uncovered 14 ‘chokepoints’, each of which could have a seriously negative impact on global supplies.
The research looks at the trade routes for key food commodities, such as grain, as well as the transnational supply of the fertilizers on which the world’s farms depend.
The degree of vulnerability within the global food supply chain is troubling. Two-thirds of the world’s total harvest crop calories are derived from only four crops: maize, rice, soybean and wheat.  Production of which is growing increasingly concentrated on fewer regions. Coupled with growing urbanization and climate change, smaller production zones are feeling greater strains.
These are the ‘chokepoints’ which the authors define as “vulnerable point of congestion along a route”.
Here, transportation may disrupted by natural disasters, political risk, industrial disputes or other commercial issues which can have far greater global impacts than would be implied by their local origins.

 

The 14 chokepoints in this report include the USA’s own inland ports and waterways, the Straight of Malacca, the Panama Canal and the Suez Canal. These, along with the other identified chokepoints, have a global influence far greater than their inadequate of infrastructural investment would suggest.

Within the United States, 60% of agricultural exports channel through country’s aged and congested waterway system, most of which stems from the Mississippi delta. 60% of wheat exports rely on the railway system, 30% of which is currently over-capacity, with a further 23% forecast to be over-capacity in 20 years.
20% of world maize exports are transacted through the US Gulf Coast ports. This area has been suffering from chronic under-investment and is also situated on one of the world’s most hurricane-prone regions.
Previously, food insecurity has tended to relate to poorer countries. This report challenges that notion, and argues that even economically developed countries face an exposure to unreliable delivery channels.
“Japan and South Korea rank among the most exposed countries in the world, despite also being two of the richest. Though not considered food-insecure by traditional metrics, both countries rely heavily on food imports that transit one, two or three chokepoints. Just under three-quarters of Japan’s maize and wheat imports pass through the Panama Canal; and one-third of South Korea’s wheat and maize imports pass through the Suez Canal, Strait of Bab al-Mandab and Strait of Malacca.”

 

Unfortunately, these are global problems, which requires international co-operation to solve. China’s own pioneering example of directly managing its offshore supply lines provides a potential blue-print for global emulation. Its Belt And Road initiative has seen Chinese engineers cross the world in building logistics and transports hubs to help secure a seamless supply of essential goods.
International bodies, the report’s authors contend, should take a similar approach and seek to reduce the stress felt at trade chokepoints by investing in further capacity.
Unfortunately, global co-operation is an increasingly rare quality in a world that seems divided by burgeoning nationalism and economic protectionism. The fragmentation of European unity, a vociferously self-interested United States as well as political discord throughout the world’s regions, may cast doubt onto the idea.

 

More of an intriguing question is the role of China once these logistical strains become apparent. If the world does not take charge over this issue, it may find itself at the mercy of Chinese bureaucrats, who have their hands at world's food supply chokepoints.