As supply chains have grown increasingly complex and the pressure on profit margins continues to rise, the spotlight on back-end and operational technology for grocers has only grown brighter.
For years, companies have been testing and scaling automation across stores and supply centers. Walmart and Ahold Delhaize, among other grocers, are investing heavily in automated distribution capabilities for stores and e-commerce. But the most promising advancements in grocery’s backrooms, warehouses and headquarters seems to be coming from artificial intelligence.
AI promises to make smarter, faster decisions for grocers across a range of operations, from assortment planning to circulars and labor scheduling. Grocers are still learning what AI can and can’t do for their operations while also trying to keep up with the latest developments.
At the same time, retailers are investing in ways to gather and process consumer data — particularly as they build out retail media networks fueled by shopper insights.
In this trendline, you’ll read how companies like United Natural Foods, Save Mart and Festival Foods are incorporating tools like automation and AI into their back-end operations. You’ll also read about how regional grocers like Lowes Foods are adjusting their corporate structures in order to test, implement and scale promising technology.
Why Save Mart believes the future is built on data
The California-based regional supermarket chain has stepped up its processing capabilities as consumer data increasingly fuels core merchandising along with new opportunities like retail media.
By: Sam Silverstein• Published July 31, 2023
When Tamara Pattison joined The Save Mart Companies in fall 2022 as the regional grocery chain’s first chief digital officer, one of her top priorities was to step up the retailer’s ability to leverage the growing amount of data it brings in.
Like other retailers, Save Mart had access to a wide variety of tools and third-party applications capable of crunching numbers. But Pattison realized the California-based company could be even more agile at turning the information it was collecting into opportunities to build sales.
“We absolutely had so much data and the ability to process it. Now, it's how do you utilize that and have a positive impact on the business?” Pattison said. “That's the process that we're building as we speak, is making sure that we not only have the data and the insights, but we know how to action against them.”
Pattison said Save Mart, which operates approximately 200 supermarkets in California and Nevada under banners including Save Mart, Lucky and FoodMaxx, has recently expanded its ability to build shopper engagement by focusing data-based insights on individual stores. The company’s digital division has also showed Save Mart’s merchandising and store operations teams the value of using data to make quick adjustments — and seen rapid results, Pattison said.
“Our plan was to use 2023 to set the stage, get all the building blocks in place and make sure that we were kind of at market parity, and 2024 is where we really want to bring some new [data-based capabilities] to market,” said Pattison.
Save Mart has recently used insights drawn from its operations to quickly roll out promotions aimed at individual stores, according to Pattison.
“Doing a digital coupon for two days on a weekend and having that targeted to an area of the chain that might need some incremental investment has not been something that we've been able to do in the past,” she said.
Pattison emphasized that speed is a key goal for Save Mart as the company builds its data-management capabilities because opportunities to turn consumer insights into sales opportunities can be fleeting in the grocery industry.
“If it takes you five days to analyze the data, and three days to action, it may not even be relevant” by the time the company is ready to use it, especially around holidays, Pattison said.
Pattison said that rather than trying to build an in-house data analysis department, Save Mart is relying on outside companies to provide the technical know-how it needs. Meanwhile, Save Mart is tapping into its core advantages as a regional chain to set itself apart from larger competitors with deeper pockets and more expansive technological resources.
While bigger grocers like Kroger might need to consider decisions on a national level, Save Mart is positioning itself as more nimble because it has fewer stores concentrated in a relatively small geographic area, said Pattison, a former senior Albertsons executive who headed up marketing, loyalty, digital and e-commerce for the company.
In spring 2023, Save Mart set up a retail media network in partnership with retail technology supplier Swiftly as part of the company’s efforts to use third-party suppliers to build its digital capabilities.
“We’re small, we’re nimble, we can work with our third-party partners to do things quickly,” Pattison said. “And we see that as kind of our unique competitive advantage.”
A regional grocer’s willingness to embrace its smaller size relative to national players as a strength can turn out to be a key benefit, particularly when working with CPGs that want to use data from grocers to promote their products, said Spencer Baird, CEO of retail data provider Inmar Intelligence.
“‘Small’ to me could mean incrementality,” Baird said, referring to advertisers’ interest in gauging how consumers engage with their messages. “So there’s ways to play it to make yourself more valuable to the advertiser.”
Barry Clogan, chief product evangelist for Wynshop, which provides e-commerce solutions to grocers, said it is critical for regional retailers not to view their size as a disadvantage when assessing their ability to leverage data.
“If I’m a smaller grocer, I can’t get distracted by [how] Kroger and 84.51° are crunching all sorts of data science and machine learning and coming up with really cool things,” Clogan said, referring to the grocery giant’s data analysis subsidiary. “I need to be able to [understand] my data so that at least I’m surfacing it in the right places.”
Clogan added that grocers that acquire other food retailers can face challenges when working with data they inherit. “I’m hearing from grocers that they have it in different locations, and they don’t actually know how to get it out of the current systems that they have,” he said.
Another challenge facing regional grocers in the coming years, Baird said, is being able to draw together various streams of data and also incorporate artificial intelligence in order to help forecast sales opportunities.
“There's a need for the industry to go from using data to measure performance on things to using data to target opportunities to make more informed, smarter decisions,” he said.
Jeff Wells contributed reporting to this story.
Article top image credit: Courtesy of The Save Mart Companies
Why Cingari Family ShopRite is turning its food waste into energy
The 12-store family-owned chain is turning 100 tons of organic material per month into energy that powers homes and businesses across Connecticut.
By: Catherine Douglas Moran• Published April 24, 2023
At a time when the grocery industry is pressed to tackle its food waste problems, the Cingari Family Markets under the ShopRite banner in Connecticut has turned to an innovative solution through local partnerships.
The 12-store chain, which is part of the Wakefern Cooperative, is composting about 100 tons of organic material per month — roughly the weight of a 767 Jumbo Jet, Dominick Cingari, the grocer’s sustainability expert and fourth-generation member of the grocery company, said in an interview. That material is then converted into energy that powers homes and businesses across Connecticut.
Its compost-to-energy efforts, which have accelerated over the past few years, have played a key role alongside inventory management processes and contributed to the grocer cutting waste by over 60% while also opening three stores during the last 11 years, Cingari said.
Food waste hierarchy
The first priority for the CingariShopRite is to reduce the amount of food waste created.
“The best way to deal with food waste is to not have to waste in the first place,” Cingari said.
To that end, the grocer places a heavy emphasis on its inventory management, which relies on computer-generated ordering as well as manual input to “make sure we have the right items, the right quantity of items on the shelves at the right times,” Cingari said.
Even with that, food waste is a reality of the business, so the grocer has a hierarchical plan for how it handles items that are going bad.
First, the grocer provides edible food to local food banks and charities, Cingari said, noting that the business is looking to partner with a food rescue nonprofit that distributes food to homeless shelters. Tapping into its community roots, the grocer has been donating food for more than 50 years, Cingari said.
If the item is non-edible and biodegradable, then it gets composted.
“We want to donate everything we can to the food banks and charities,” Cingari.“Why is it composted in the first place if it can be donated to somebody?”
Cingari Shoprite has been composting in all of its stores since 2012 when the grocer started using a traditional composting method where the waste was hauled to a compost facility.
From food waste to compost and energy
A few years ago, prior to COVID, the president of the Connecticut Food Association called Cingari to suggest a tour of Quantum Biopower, Connecticut’s first anaerobic digester.
“I was so impressed, because with the traditional composting method, as those biodegradable materials break down it releases methane gas naturally into the atmosphere,” Cingari said. “And we know methane gas is not good for the environment — it’s a greenhouse gas.”
Instead, Quantum speeds up the process of breaking down the organic material through a digester and then captures the methane gas that’s released to power homes and businesses, Cingari said.
When the process is finished, there’s a resulting nutrient-rich soil from the composted material. The grocer is planning to soon start selling that soil in 5-pound bags at its stores, Cingari said.
“It kind of completes the whole cycle from growing [the food] in the ground to going back into the ground,” Cingari said. “I mean, that’s amazing.”
The composting initiative was more expensive in the beginning, Cingari said, due to upfront work like planning, researching, training associates and signage, but the grocer has become more efficient.
“But we’ve always worked to make the processes more efficient,” Cingari said. “It’s always evolving. What could we do better?”
Now, the composting is part of the normal workflow, Cingari said. The switch from traditional composting to Quantum allowed for the inclusion of some packaged material, like salad bags, which would normally have to get unpacked, providingcost savings.
“Is it a profit center for the company? No, it’s not. But we do it because it’s we want to do the right thing,” Cingari said.
In the future, Cingari said having more locations that handle compost-to-energy would not only lower transportation costs but also lower vehicle emissions related to the transportation: “If there were more Quantums available in different regions of the country or different counties, then you would have less transportation costs.”
Supporting local businesses
While Cingari “fell in love with Quantum,” there was one main issue: the grocer didn’t have a way to get its biodegradable material transported to Quantum.
Through the Connecticut Food Association, Cingari got introduced to Blue Earth, which handles that transportation for a fee.
Because Blue Earth was a startup, Cingari offered one store to test the partnership at the beginning of the pandemic with the idea that more stores would get added on as Blue Earth grew its operating market.
“I didn't want to put pressure on Blue Earth as a small startup and say, ‘Hey, you need to take all of my stores or I won't do business.’ I said to them the opposite,” Cingari said.
“They're a small, local business. At one point we were a small local business. We're a family-run company, so we always try to help entrepreneurs and small businesses,” he said.
That arrangement helped Blue Earth figure out where to expand its operations to. Now, all 12 of the Cingari Cingari ShopRite stores are partnered up with Blue Earth.
Proudly sharing progress
ShopRite has found that its waste-to-energy work helps it connect with its shoppers and also help boost employee morale: “I think people feel better about themselves for doing something positive for the environment,” Cingari said.
ShopRite has signs in its stores telling customers that food waste equalingthe weight of a 767 Jumbo Jet is not going into a landfill. The grocer’s dietitians also help spread the word about the compost-to-energy initiative, Cingari said.
Every month, Cingari tracks each store’s amount of composted material, uses a formula to calculate how many pounds of CO2 were diverted from landfills and posts that number in the break rooms and at the time clock, Cingari said.
“When you get your associates to buy into the program, they become invested in it and it becomes a little exciting and they know what's going on,” Cingari said. “I've had contests with store against store [with a] pizza party as a prize. When you do those types of things and you make it fun, I think we all benefit.”
“We’re very proud of what we compost,” Cingari said.
Article top image credit: Permission granted by Cingari ShopRite
Walmart opens store-based fulfillment center in Arkansas
The facility will help the retailer boost order throughput via a proprietary storage and retrieval system.
The facility, known as a market fulfillment center, will increase the number of daily orders a store is able to fulfill and free up store employees to handle other tasks, the company said. It's Walmart's second market fulfillment center nationwide, the first being a proof-of-concept center in Salem, New Hampshire.
Like Salem, the Bentonville facility uses a proprietary storage and retrieval system named Alphabot. Robotics automation company Alert Innovation designed this system specifically for Walmart before being acquired by the retailer.
Walmart is one store closer to fulfilling its plan to add market fulfillment centers to dozens of stores beyond Salem, which first began operations in 2019. A company blog post in 2022 said that bringing Alert Innovation’s technology and capabilities in-house will help it deploy these centers with greater speed going forward.
“This new order fulfillment system is truly game changing,” said Ryan Simpson, store manager at the Bentonville location, in a statement. “Not only does it enhance the customer experience through quicker, more accurate online order fulfillment, it also provides us the runway to continue growing our business now and in the future.”
The typical order fulfillment process involves employees picking items within the store, but when a market fulfillment center is involved, automated bots retrieve items from within the center. The items are then delivered to a workstation for order assembly.
“Once the order is collected, the system stores it until it’s ready for pickup," according to a 2021 company blog post. "This whole process can take just a few minutes from the time the order is placed to the time it’s ready for a customer or delivery driver to collect.”
It’s a good time for Walmart to speed up fulfillment processes for online orders at its stores — the company’s store-fulfilled delivery sales have nearly tripled to more than $1 billion a month.
Article top image credit: Courtesy of Walmart
How regionals are updating their corporate structure to accommodate digital
The evolution internally to support digital innovation is less about a retailer’s size and instead more about the maturity of its e-commerce business, sources said.
By: Catherine Douglas Moran• Published July 26, 2023• Updated July 31, 2023
As the grocery industry increasingly prioritizes omnichannel experiences and digital innovation, grocers both large and small are restructuring their corporate teams to help drive digital capabilities.
Large players like Walmart and Kroger have been refining their digital teams and roles for the last several years, and now regional grocers are embarking on changes that follow a similar trajectory.
While e-commerce sales growth has slowed following a boom at the onset of the pandemic, sources said they expect online sales to continue to steadily increase in the years ahead, in part due to the shopping habits of younger consumers, said Jason Soar, a former grocery e-commerce lead for Sainsbury's in the U.K. and now partner of retail and e-commerce operational development at The Partnering Group, which has worked on e-commerce with grocers like Southeastern Grocers.
“Grocers of the future would look at e-commerce as [a] business-as-usual function within their core corporate capabilities,” Soar said.
The evolution internally to support more and more digital innovation is less about a retailer’s size and instead more about the maturity of its e-commerce business, sources said.
Grocers with low e-commerce volume — those with sales typically accounting for around 3% or less of overall sales — are fine to rely on marketplaces like Instacart and DoorDash, according to Soar and Jordan Berke, founder and CEO of Tomorrow Retail Consulting.
Most regional grocers have graduated from that early stage, Berke said. The average regional grocer,which has roughly 6%-8% e-commerce penetration, is in the next phaseinvolving scaling that part of its business and embarking on the journey to become an omnichannel retailer, Berke said.
Grocers that are making the pivot away from third-party marketplaces and are now looking to grow their e-commerce business typicallydismantle their e-commerce teams and integrate those operations throughout the company, Berke and Soar both said.
Before embarking on internal changes, Soar says grocers need to have their CFOs and finance teams evaluate how using third-party marketplaces impacts their bottom line and customers’ needs and then create a profit and loss statement for the e-commerce business that can help company leaders set a strategic plan for how to develop e-commerce in a sustainable way.
North Carolina-based Lowes Foods, for example, has a digital roadmap that connects to the grocer’s overall strategy, said Tim Lowe, the chain’s president, who stressed that it’s important to follow those plans to guard against “fiefdoms.”
“I always tell everybody, I'm allergic to fiefdoms,” Lowe said. “I hate it whenever walls come up because when walls come up, we don't get to see from the true perspective of what it means to the organization and the business and ultimately what it means for our hosts as well as for our guests.”
What restructuring can look like
Berke and Soar have slightly differing frameworks for how and when restructuring happens.
Based on an analysis of 40 grocers, Tomorrow Retail has found that grocers with e-commerce sales between 5%-15% will typicallyhave a dedicated e-commerce team that includes employees focused on digital merchandising, digital marketing, product and tech guidance, andthat partners closely with other functions of the business, Berke said.
Retailers with online sales in the 18%-25% range, though, will typically dismantle that team and take a holistic approach with merchants, marketers and operators that factors in both physical and digital channels, Berke said. Tesco, Walmart and Asda have followedthis trajectory, Berke said.
“The first point of integration is store operations so that your stores have ownership over the fulfillment of your e-commerce orders ... they feel like they control the experience, but with that dotted line into your e-commerce leadership so that they're also committed and accountable to enabling economic growth,” Berke said.
Retailers should wait to integrate marketing until e-commerce has scaled enough for that team to be motivated to accelerate digital growth, Berke said. They should also wait to integrate merchandising operations until the e-commerce channel has a big enough impact on this division and until the division has sufficient training necessary to understand how online differs from in-store, he said.
The Fresh Market’s marketing team, for example, oversees both online and offline sales together, said Vincent Yang, co-founder and CEO of Firework, which powers shoppable videos. Having one person or a dedicated team oversee digital innovation, such as The Fresh Market’s Chief Marketing Officer Kevin Miller, makes it easier for vendors to provide digital services to grocers than with those that have siloed teams, said Yang.
“Every vendor will want to work with one person instead of six,” Yang said,noting that this can produce“six very different KPIs that do not align with each other.”
Meanwhile, Soar recommends that regionals transitioning away from marketplaces first shift to a hybrid team, then a dedicated e-commerce team and then move toward omnichannel integration when e-commerce sales account for 15% or more of total sales.
When online sales account for 3%-7%, a grocer can have a hybrid team that is sponsored by a senior-level executive and has “dotted line relationships” with other business units around the corporate head office, Soar said. That team can have one person spearhead the project that leverages business unit expertise.
“If I was going through that transition phase of going from 3% to 7%, then I would be somebody who would have probably come from another grocer who's done this and understands it,” Soar said.
When e-commerce sales are roughly 7%-9%, the next step is to create a dedicated team primarily around operations and commercial finance that can also include merchandising and content monetization, Soar said.
Given the complexities of e-commerce fulfillment, the company may want a role focused on managing different logistics, such as a heavier focus on delivery in cities and pickup elsewhere, Soar said.
“There's so much complexity in e-commerce that where you start isn't necessarily where you end,” Soar said. “It's a constant evolution, as the business kind of grows, consolidates, and then integrates within core business functions.”
Soar said there are two unique functions that are critical to running a lean e-commerce business unit — demand planning and forecasting, and network capacity planning and slot management.
“A few of the skills required in these roles can usually be found in supply chain/logistics functions,” Soar said. “I would place these roles either within Strategy or the Operations/Logistics functions.”
Soar’s corporate restructuring flowchart
Modeled on a typical regional grocer with annual sales of $5 billion
Lowes Foods is currently evolving how digital factors into its corporate teams.
Lowe said that when he joined Lowes Food in 2013, the retailer had “half a person” in charge of e-commerce but has since transformed the business to have an e-commerce division, which is headed up by Senior Vice President of E-commerce Chad Petersen.
“[Petersen] has done a great job of structuring the e-commerce organization to where we can look at it as business units and business channels to be able to get us the correct delivery out there and to be able to look at that total interface,” Lowe said.
Now, Lowes Foods is thinking about how that team can move beyond just e-commerce and serve “more and more as a digital Interplay back to our organization,” Lowe said.
“At the end of the day, the consumer, whenever they interact with our brand, what I want them to know is that they're interacting with a brand that cares for them,” Lowe said.
Overcoming restructuring hurdles
Both Berke and Soar cautioned against grocers integrating digital functions too early.
“We've seen one client, for instance, who integrated their merchandising organization when e-commerce was still at about 4% of sales. And what they found is the merchants didn't have the time or motivation to spend any effort on the e-commerce channel and so their growth stalled,” Berke said.
Marketing and merchandising are the most challenging for grocers to blend with digital as they restructure, sources said. Traditional marketing teams have typically had very different KPIs that are more focused on brands and store value propositions, Berke said.
When grocers do blend the digital and marketing teams together, Berke said that omni-marketing teams will often import a digital marketer who has experience driving growth marketing to help infuse the marketing team with a “digital acquisition mindset and culture.”
Finding the right talent is another obstacle: “The e-commerce to omnichannel transformation is a talent pressure point,” Berke said.
Because grocers are often creating new teams and roles for their e-commerce growth, Soar noted that sometimes they don’t know what skillsets or expertise to seek in job candidates.
A grocer that Soar worked with but declined to name, for example, built an e-commerce team that was focused on operations and pulled talent from stores, including curbside leaders. While those hires were subject matter experts, their skillsets were not broad enough to comprehend managing e-commerce as a business unit, Soar said.
“The best case scenario is that talent has already been working on your e-commerce business, but in that small, dedicated team back in the early days, so they know your brand, they know your customer, they know your uniquenesses, but they also have grown up in the digital realm” and are familiar with customer acquisition cost and fluent in how to drive online growth, Berke said.
In a positive sign for grocers, Berke said the grocery industry is attracting more young, digitally fluent talent, in part thanks to the speed, flexibility and willingness to become more digitally nimble when the pandemic started: “We're seeing entry into the industry of people that I think would have never entertained going to a grocery [company’s corporate team]. Grocery before was considered kind of old school.”
Digital innovation leaders also need to be fluent in other areas of a grocer’s business, sources said.
At Schnuck Markets, which is leaning into a culture of collaboration, Vice President of IT Infrastructure and Application Development Dave Steckalso touches on loyalty programs, pricing, promotions, marketing and more in his role — highlighting the importance of cross-department knowledge and teamwork, said Anne Mezzenga, Target veteran and co-CEO of retail blog Omni Talk.
“It used to have to be siloed, but now every role, especially in regional grocers, are roles that require exploration and research into automation, into innovation and into other technology investments that weren’t probably part of their job description when they started even two to three years ago,” Mezzenga said.
As Lowes Foods looks to be a smart digital innovator, Lowe said it can be tricky to keep workers focused on prioritizing technologies that fit into the grocer’s digital roadmap.
“One of the biggest challenges ... is to get our teams to not chase shiny pennies,” Lowe said.
He said his philosophy is to “stick to the digital roadmap that ladders to our overall company strategy and then don't chase shiny things. And then work on the things that matter.”
Jeff Wells contributed reporting to this story.
Article top image credit: piranka via Getty Images
Festival Foods starts using AI tool for fresh foods
The Wisconsin family- and employee-owned grocer marks another retailer partnership announcement for store operations technology maker Upshop.
By: Catherine Douglas Moran• Published July 6, 2023
Festival Foods is using artificial intelligence forecasting and inventory management tools through a partnership with Upshop for its fresh foods operations, according to an emailed announcement in July.
The Wisconsin family- and employee-owned grocer is using the store operations technology maker’s Fresh SaaS software, which integrates and digitizes different workflows and data streams, like pricing, recipes and production plans to streamline ordering processes and production operations.
The announcement notes that the partnership comes at a time when Festival Foods is getting ready to grow its business.
Festival Foods, which has 40 supermarkets across Wisconsin, is investing in building a “competitive edge” with its fresh department, and working with Upshop will help the grocery chain scale operational efficiencies, Ken Wicker, Festival Foods’ senior vice president of fresh foods, noted in the press release.
Upshop noted that automation can help with the fresh perimeter’s operational complexities coupled with customers’ high expectations of fresh foods.
“This partnership is about removing barriers to execution for our teams and simplifying the complexities of running a Fresh department so [associates] can focus on delivering a memorable guest experience,” Festival Foods CEO and President Mark Skogen said in the announcement.
The partnership announcement marks the third recently unveiled retailer tie-up for Upshop.
In June, Upshop announced its existing retail partner Cub Foods was in the process of rolling out its Expiration Date Management products to 55 Cub stores, giving workers targeted notifications and workflow guidance to rotate soon-to-expire items. That tie-up is expected to result in over $1.5 million in annual shrink savings, according to Upshop.
Cub has been using Upshop’s labeling and scales management, recipe and inventory management capabilities, along with traceability solutions, for more than a decade.
In May, Niemann Foods decided to implement Upshop’s automated replenishment and inventory optimization system, called Magic, across 43 stores in Illinois, Missouri and Indiana, per an announcement, which noted the tie-up “will lead to stores that are meeting localized demand and making it easier for associates to manage stocking.”
Upshop has positioned its tools as scalable options that can help retailers expand their businesses as grocers large and small turn to technology to automate processes, lessen friction points with customers and make it easier and faster for workers to do their jobs.
Article top image credit: pilipphoto via Getty Images
UNFI looks to improve demand planning and replenishment capabilities
The company is using Relex Solutions’ cloud-based procurement offering to consolidate and eventually replace its multiple buying systems with a centralized, data-driven approach.
By: Catherine Douglas Moran• Published June 22, 2023
United Natural Foods, Inc. (UNFI) announced in June that it has partnered with Relex Solutions to make its demand planning and procurement operations more efficient.
UNFI is using Relex’s cloud-based procurement solution to consolidate and eventually replace multiple UNFI buying systems with a data-driven approach.
The partnership announcement follows profit nosedives in UNFI’s two most recent quarters as well as the company’s decision to restructure its operating regions and cut roughly 150 jobs.
UNFI said working with Relex is a “key component” of the grocery distributor and wholesaler’s transformation of its supply chain.
Relex’s solution aims to provide an enhanced customer experience and support customer growth by integrating advanced data-driven solutions and improving efficiency in operations, per the press release.
Relex will provide demand planning, ordering, and inventory management capabilities that allow for a holistic view of UNFI’s operations, according to the announcement. This will allow UNFI to better understand future capacity and supply chain constraints, as well as streamline its planning processes and optimize inventory across all UNFI categories. In fresh, for example, UNFI said it will be able to reduce food waste, boost service levels and increase data visibility between its suppliers and customers.
Ultimately, UNFI will have its buying systems streamlined into one buying process. UNFI said it expects the new platform to be running over the next 12 to 18 months.
“As part of UNFI’s multi-faceted transformation agenda, we’re continuing to implement cutting-edge technology to improve the customer and supplier experience, while increasing operating efficiency,” UNFI Chief Operating Officer Erin Horvath said in a statement.
Horvath said that Relex “offers a robust, reliable solution that maximizes UNFI’s capabilities, helps automate our network, and optimizes our procurement processes, ensuring the freshness of our products and quality of service to our customers.”
UNFI has been working recently to boost operational efficiencies and strengthen its financials amid performance struggles. UNFI’s net income decreased 89.6% in its third quarter after dropping 71.2% during its second quarter.
Earlier that month, the company unveiled plans to consolidate its operating structure from four regions to three and eliminate around 150 roles, mainly in management or supervisory positions, saying the changes are part of its transformation plan.
During the company’s second-quarter earnings call, UNFI CEO Sandy Douglas told investors the company is working on a multi-prong “transformation agenda” that will increase network automation and optimization, simplify its pricing and procurement processes, boost its digital offerings and modernize its digital infrastructure.
Article top image credit: Courtesy of UNFI
Associated Food Stores turns to warehouse automation
The retailer cooperative said it will use artificial intelligence-powered, robotic technology from Symbotic at its Utah distribution center to increase efficiency and reduce costs.
By: Catherine Douglas Moran• Published May 9, 2023
Grocery wholesaler Associated Food Stores (AFS) announced in May that it teamed up with Symbotic to bring the technology provider’s automated warehouse system to its distribution facility in Utah, per a press release.
AFS, which serves nearly 450 retailers across nine states, said the use of the artificial intelligence-powered, robotic technology will increase efficiency and reduce costs.
AFS is investing in autonomous warehouse solutions at a time when many retailers are turning to technology that can make their picking and packing operations speedier and more efficient.
AFS and Symbotic said the technology will improve overall supply and delivery to stores, as well as help expand selection. They also framed the tie-up as a way to boost worker satisfaction.
“We believe implementing the Symbotic system creates great opportunities for our distribution center team members to grow their skill sets and expand their future opportunities with the company,” Glen Keysaw, AFS’ vice president of distribution, said in a statement.
Keysaw said that all current workers at the distribution center will have jobs following the arrival of the technology — a statement likely aimed at assuaging concerns that automation will replace workers.
Symbotic’s automated system relies on a fleet of vision-enabled, autonomous robots that whiz around a warehouse to pick and pack products in high-density, mixed SKU pallets.
“It’s a strategic investment that can increase efficiency and enhance our ability to service our member retailers,” Roger White, AFS’ executive vice president and chief operating officer, said in a statement.
AFS is the latest partner to link up with Symbotic. In March, United Natural Foods, Inc. (UNFI) said it teamed up with the company to bring the AI-powered robotics to its distribution center in Centralia, Washington. In 2022, Walmart announced plans to deploy Symbotic’s technology to all 42 of its regional distribution centers over the next few years as part of a broader supply chain upgrade.
While the adoption of automated e-commerce fulfillment has been slow in the grocery industry, that technology could start to make more headway following the pandemic’s acceleration of online shopping and rising labor costs.
For its second quarter, which ended March 25, Symbotic recorded $266.9 million in revenue and a net loss of $55.4 million, up roughly 177% and 85%, respectively, from the same period last year. Symbotic Chairman and CEO Rick Cohen said in a statement that the company during the quarter achieved a three-fold increase of deployments in progress since last year.
Article top image credit: Courtesy of Symbotic
How grocers are enhancing operations with technology
For years, companies have been testing and scaling automation across stores and supply centers. Technology like AI promises to make smarter, faster decisions for grocers across a range of operations, from assortment planning to circulars and labor scheduling.
included in this trendline
Why Save Mart believes the future is built on data
Festival Foods starts using AI tool for fresh foods
UNFI looks to improve demand planning and replenishment capabilities
Our Trendlines go deep on the biggest trends. These special reports, produced by our team of award-winning journalists, help business leaders understand how their industries are changing.