The Friday Checkout is a weekly column providing more insight on the news, rounding up the announcements you may have missed and sharing what’s to come.
While inflation has abated in recent months, a Dunnhumby report released last week highlights that U.S. shoppers believed food-at-home inflation late last year was more than double what it actually was. With high prices — and the perception of high prices — weighing on shoppers, mass players, along with discounters and clubs, are helping consumers stretch their dollars further with their low prices.
For months, Brick Meets Click and Mercatus have spotlighted in their monthly grocery e-commerce reports that mass merchants are boosting their presence. Mass merchants saw a 20% increase in monthly active users in January, while grocery saw a 6% decline, according to the firms’ latest survey. The same survey also found that just over 50% of respondents at the end of January said they plan to use a grocer’s online service again in the next 30 days, while roughly 64% said the same for mass merchants — marking the largest gap ever measured in the monthly surveys.
Newly released Placer.ai reports also have explored the success of discounters and mass retailers, although not specifically focused on grocery. In December, Target, Walmart, Costco, BJ’s Wholesale Club and Sam’s Club begun to see store traffic similar to 2021, closing a gap of traffic year-over-year declines in October and November. On a three-year stack, those retailers, except Walmart, posted visit growth in December ranging from 3.1% (Costco and BJ’s) to roughly 7% (Target and Sam’s Club), although Placer noted Walmart’s 1.2% dip was “likely just a temporary setback.”
Walmart has dominated cross-shopping: Among consumers who shopped at other superstores in 2022, between 74.4% and 92.1% also visited the retailer at least once last year while more than one out of every five went at least 12 times.
As Walmart continues to gain share in the U.S. grocery market, the retailer reported comparable-store sales and e-commerce sales growth, 8.3% and 17%, respectively, for the fourth quarter similar to its Q3 results. Food categories led its December boom, which marked the largest sales month in Walmart U.S.’s history, CFO John David Rainey told investors this week.
“We’re gaining share across income cohorts, including at the higher end which made up nearly half of the gains we saw in the U.S. again this quarter,” CEO Doug McMillon told investors this week. “And we’re also capturing a greater share of wallet at Sam’s Club in the U.S. with both mid- and higher-income shoppers.”
In a separate report, Placer found that dollar stores and discounters outpaced grocery stores, superstores and shopping centers on monthly visits when compared to a January 2020 baseline. In December, for example, dollar stores/discounters recorded a 76.4% bump, while superstores saw a 31.8% increase and grocery stores an 11% increase.
Three of the four major chains — Dollar Tree, Family Dollar and Five Below — saw year-over-year visit growth in January 2023 of 10%, 3.7% and 18%, respectively, while Dollar General saw a slight decrease, Placer found. On a three-year stack, all four players saw strong visit growth ranging, with Five Below recording a 66.6% increase and the other three a roughly 20% bump.
Some traditional grocers made moves to fight back against mass merchants and discounters with the attitude: If you can’t beat them, join them. Grocers, such as Hy-Vee and H-E-B, expanded their general merchandise offerings and non-food-related services.
In case you missed it
Kellogg Company and Meijer provide funding to Midwest farmers
Kellogg and Meijer partnered with The National Young Farmers Coalition to provide funding that helps cover honorariums for a dozen Midwest farmers who participate in the Young Farmers Land Advocacy Fellowship, according to a Tuesday announcement. The fellowship is part of The National Young Farmers Coalition’s One Million Acres for the Future campaign, which advocates for policy change in the 2023 Farm Bill.
The funding from Kellogg and Meijer is for travel to Washington, D.C., where the farmers can advocate for themselves and participate in regional gatherings. In addition, the funds will underwrite the making of both online and in-store consumer communications that share partnerships between Meijer, Kellogg and The National Young Farmer Coalition, per the press release.
Kellogg and Meijer have collaborated to support farmers in the Midwest since 2019, and this latest effort continues to build on their work to support future generations of farmers, the announcements notes.
Hy-Vee temporarily ends employee discount program
As of Feb. 20, the grocer’s employee discount program was suspended so “it could be revamped over the upcoming weeks,” Hy-Vee said in emailed comments. The grocery company notified employees of the change on Feb. 17.
The program, which was launched in 2019, gave employees and one member of their household a 10% everyday discount. But over the last few months, Hy-Vee saw a significant increase in the number of users who were not in the same household as an employee using the discount. In addition, the grocer said it saw cases of individuals using the discount in other cities where the employee was not living as well as “fraudulent practices and loopholes.”
The grocer aims to relaunch the benefit to employees by mid-April after some adjustments and notes that it is still offering its employees a number of other benefits.
The DFW Airport Checkout-Free Challenge
Anne Mezzenga and Chris Walton, co-CEOs of Omni Talk and former Target veterans, tested out two frictionless checkout models — one from Amazon and another from Zippin — offered at the Dallas/Fort Worth International Airport and shared the results in a Tuesday YouTube video.
In the U.S. grocery sector, this technology in a large-scale, full-service store has only been successfully done by Amazon. However, the checkout-free model is growing in popularity in smaller-scale retail spaces, including convenience stores, and now the new hotspot of airport shops.
Both Amazon and Zippin’s Dallas airport stores had the Big-Brother-type cameras on the ceiling to monitor customer movement. Both models also emailed Mezzenga and Walton their receipts and had the classic convenience store layout and merchandise available. However, Mezzenga and Walton said that Amazon was the better customer experience with its palm scanning technology and ease of putting in information to get a receipt. The Omni Talk hosts agreed, though, that frictionless checkout still has a long way to go to be a streamlined, common practice.
Number of the week: 2,800
That’s the number of positions Stop & Shop is looking to fill through an all-store career fair set to occur on Saturday at its more than 400 locations. The Northeast grocer plans to hold interviews for positions in several areas, including the bakery, deli, seafood, pharmacy and produce departments and its online division. The company also plans to screen candidates to serve as cashiers, porters, baggers and in other roles.
Grocery Outlet is set to report earnings for the fourth quarter of 2022 and all of last year on Tuesday, while Kroger and Sprouts Farmers Market are due to release their latest results on Thursday.