US: Mollie Stone’s to open 10th location in the Bay Area
Specialty grocer Mollie Stone's is upping its store count in its main territory. According to the San Francisco Chronicle, the retailer announced that it will open up its 10th location in the Bay Area, claiming a former 43,000-square-foot Lombardi Sports store in 2020. Since 1986, Mollie Stone’s has been a local mainstay in the Bay Area, with locations in San Francisco's Castro, Twin Peaks, and Pacific Heights neighborhoods and the Greenbrae, San Mateo, Sausalito, Palo Alto, Burlingame, and San Bruno areas. Mollie Stone's offers shoppers local, natural, and gourmet products, similar to that of a Whole Foods Market.
US: Ralphs installs solar panels at automated distribution center
Ralphs, a subsidiary of The Kroger Co., has revealed the installation of more than 7,000 solar panels at its automated distribution center in Paramount, California. The photovoltaic solar power is intended to provide half of the electricity needed at the 555,000-square-foot building. The fulfillment center handles products for 190 Ralphs stores and 95 Food 4 Less locations in the Southern California region. This project, in partnership with Albuquerque, New Mexico-based Affordable Solar, is the largest solar energy initiative so far for Kroger.
US: Giant Eagle adds Higi self-service health stations
Giant Eagle Supermarkets is the latest retailer to join the Higi health movement. The retailer plans to add Higi health stations to 218 of its 410 stores in Pennsylvania, Ohio, West Virginia, Indiana and Maryland, giving Higi an installed base of more than 10,000 FDA-cleared self-screening smart health stations. Customers can use the Higi health stations for free health screenings and ongoing health education tools and resources.
“Merger of Ahold Delhaize + Kroger would make sense”
A merger of Belgo-Dutch supermarket group Ahold Delhaize and its American competitor Kroger would make sense and allow for 1.2bln euros in synergies. Together, they would be able to increase their value in the United States by 36%. The idea is not new, but is now repeated by Bruno Monteyne of American research institute Bernstein as the need for consolidation is increasing on the US market in order to be able to face Amazon and Walmart. Combined, both groups would be almost as big as Walmart itself. With its 2,800 supermarkets, Kroger is one of the biggest retailers in the US. Even though its turnover is almost twice as high as Ahold Delhaize's, a merger would make sense as both chains are geographically complementary. Profiting from a larger scale after the merger, the company may be able to achieve 1.2bln euros in synergies - which would push the company's combined worth 36% higher. However, the Head of European Retail at Bernstein stresses that he does not know of concrete steps in this direction, and that this has been a purely hypothetical exercise. Moreover, there are some challenges to be overcome as well: what would be the future of Ahold Delhaize's European activities, and what to do with the Dutch group's high debts? Despite these afterthoughts, Ahold Delhaize's shares skyrocketed after the report was published...
US: Grocers join fight against foodborne illness
The Partnership for Food Safety Education (PFSE) has revealed that a record number of partners have joined the Arlington, Virginia-based nonprofit organization to boost public awareness of safe food handling, including Meijer Inc. and Publix Super Markets Charities, along with a range of grocery industry trade associations and CPG companies. Contributing partners provide year-round funding, enabling PFSE to offer such resources as an informational website and downloadable, science-based tools. Funding additionally supports a network of community-based health and food safety educators with free events and other tools.
Germany: HelloFresh posts 1st profitable quarter since IPO
German-based HelloFresh saw a strong Q2 both in the United States and internationally, according to its recently released fiscal reports. HelloFresh group revenue for the quarter grew by 37% year-over-year to €437mln (US $488.4mln), or 31.5% year-over-year in constant currency. The meal-kit company also noted 30.6% year-over-year active customer growth, and is on track to deliver more than 250mln meals in 2019. In the United States during Q2, HelloFresh had 1.35mln active customers, 4.88mln orders and 32.2mln meals delivered. U.S. revenue grew to €245.4mln (US $274.2mln) in Q2 2019, up from €188.9mln (US $211.1mln) in Q2 2018, a 29.9% year-over-year increase.
Kaufland teams up with app-based delivery service Glovo in Romania
German retailer Kaufland has concluded in Romania a partnership with Glovo, a Spanish app-based fast delivery service, with the aim of delivering food and non-food products to its customers at home or at the office. The fast delivery service is available in the first phase in Bucharest, and, by the end of this year, it could launch in other cities as well. Glovo couriers make deliveries from the five Kaufland stores in Bucharest. The assortment currently available through this service comprises about 1,300 items.
China: Metro's assets auction deadline extended: sources
Metro has extended the deadline for submitting offers for its China business until next week to give potential bidders more time to perform due diligence, three sources familiar with the matter told Reuters. A consortium consisting of Meicai and Hopu Investments and another bidding group including Yonghui Superstores and Hillhouse Capital Group are expected to be among the bidders, these sources said. Metro declined to comment on the status of the auction other than to say that discussions are advancing in line with plans, a spokeswoman for the company said.
Belgium: Louis Delhaize reports loss of €929mln for FY2018
As reported in Belgium-based newspaper L’Echo, Louis Delhaize has announced its FY2018 results, revealing a net loss of €929mln (US$1.04 bln). The retailer said its operating income also declined from +€204mln (US$228mln) in 2017 to a loss of €833mln (US$932mln) in 2018. Louis Delhaize’s revenues remained stable at €8.7bln (US$9.7bln). The retailer attributes its loss to the impairment of goodwill at Cora France, restructuring costs at supermarkets Cora and Match in France and dispute settlement costs in Romania. Louis Delhaize commented: “Economic and financial uncertainties have continued to weigh on consumption, especially on the non-food sector”. In Belgium, Louis Delhaize also saw a significant sales decrease in 2018. This, Louis Delhaize said, was due to “sluggish consumption” supported by a “competitive environment”. Its loss at Match increased from -€13.1mln (-US$14.7mln) to -€14.2mln (-US$15.9mln), while the position improved slightly at Cora, where the loss was reduced from -€19.4mln (-US$21.7mln) to -€17.8mln (-US$19.9mln). CEO of Cora Belgium-Luxembourg, Olivier Haller, said there would be no restructuring of Cora hypermarkets as he expects the chain to recover by 2021.
Finland: Kesko collaborates with students for ideas to promote sustainable products
Finnish retail giant Kesko has participated in the 10Days100Challenges innovation sprint to brainstorm new ways to increase the visibility of sustainable products in supermarkets. The event was organised by the universities of Haaga-Helia, Laurea, and Metropolia in Helsinki. Around 100 students participated in the 10-day event, offering solutions to challenges posed by companies including, among others, Microsoft, OP, Telia and Click Innovation. Kesko's challenge for the event was addressed by 22 students operating in five teams.
IGD: UK convenience channel to be worth £48.2bln by 2024
New forecasts from IGD reveal that the UK convenience market is set to grow by £6.9bln in the next five years, to reach £48.2bln by 2024. The channel will benefit from lots of new store openings over the period, helping to fuel a compound annual growth rate of 3.1%. Patrick Mitchell-Fox, Senior Business Analyst at IGD, said: “While we expect relatively muted store development across the sector as a whole in the next two years, with the sector undergoing a period of consolidation, we forecast key segments - in particular co-operatives, multiples and symbols - to benefit from strong store growth again from 2021.” Reviewing the current year in convenience, Patrick said: “After a stronger 2018 (+3.2%), total convenience sales are expected to grow by 2.6% in 2019. This growth is being led by the co-operatives segment above all, driven not only by a focus on opening new stores, but also by outstanding like-for-like performance underpinned by strong private label development, better fresh and chilled ranges and more competitive value.
Portugal: Continente launches ‘food lab’
Portugal-based Continente has launched a new initiative, ‘food lab’ which explores emerging food trends. The chain has introduced new products, with aims to accommodate the changes in shopper trends. The initiative will see Continente collaborate with local producers to launch new products, which will carry the ‘food lab’ seal. The range is available at selected Continente stores and the online channel, with dedicated ‘food lab’ displays. The main trends of focus include: health, nutrition and sustainability. Each product offers a unique attraction to shoppers. Continente is encouraging shoppers to decide whether specific products should remain permanently in store.
Deliveroo is exiting the German market
U.K. on-demand food delivery startup Deliveroo is pulling the plug on its service in Germany. The startup expanded into the market more than four years ago. But in an email sent to users it writes that - “regrettably” - it will be exiting Germany on August 16. “This was not an easy decision and one we have not taken lightly”, it adds, saying its focus will be on “growing our operations in other markets around the world.”
China: JD exceeds revenues projections and posts a profit
Chinese e-commerce giant JD exceeded revenue expectations in the June quarter, net sales up by 23% to 50.28bln yuan (US$21.28bln). The company has cited forays into the convenience-store sector and supermarkets, as well as the harnessing of artificial intelligence in its advertising and logistics operations for the improved result, as it tries to be less reliant on its core online retail platform for growth. Net income for JD reached 618.8mln yuan ($90.1mln), a significant turnaround from the 212.4mln yuan net loss of the same period last year. Significantly, the company’s logistics business broke even during the quarter.
Amazon in talks to buy up to 10% stake in India's Future Retail: Bloomberg
Amazon.com Inc is in late-stage talks to buy as much as 10% of India’s Future Retail Ltd, Bloomberg reported, citing people familiar with the matter. The move comes as Amazon is looking to expand its reach in the Indian brick-and-mortar market, about a year after retailer Walmart Inc bought a majority stake in Indian e-commerce firm Flipkart. An Amazon spokeswoman declined to comment on the deal, saying the company does not comment about “what we may or may not do ahead.” Future Group is seeking a valuation of about 20bln rupees ($281mln) from Amazon for the stake, according to the report. The retail group currently operates more than 900 stores in India and owns nine supermarket brands, including Big Bazaar.
7-Eleven Japan suffers first sales decline in nearly a decade
Japanese convenience-store chain 7-Eleven has suffered its first year-on-year downturn in more than nine years. The decline in monthly sales throughout the chain has been attributed to heavy rains and the hack of its doomed 7Pay e-payment platform last month, which prompted customers to use rival services. Sales chainwide dropped 1.2% last month, with a 5.6% decline in same-store customer traffic. The inclement weather has also affected sales of particular items such as drinks and ice cream. 7-Eleven’s same-store sales receded 3.4% this month, while the number of franchises grew 2.7% to 20,990 stores.
UK: Tesco offers to pay 'Gafa tax' if business rates are lowered
Tesco, the biggest British supermarket chain, has called for the reform of 'business rates' (a commercial real estate tax) and suggested the introduction of an online tax - which it would have to pay itself as well. The chain wants business rates reduced by 20% as it would give e-commerce companies an "unfair advantage". The tax applies to all commercial real estate in the United Kingdom, including stores and bars but also offices and warehouses. The rates depend on rents, meaning that retailers (who pay high amounts to be present in the important city centres) have to pay a lot more than e-tailers who mainly occupy distribution centres in more rural locations.
China: Alibaba rolls out operating system for stores and supermarkets
Ele.me and Koubei, Alibaba’s two key consumer services units, have jointly rolled out an open operating system for brick-and-mortar stores and supermarket chains in an effort to improve their efficiency, the company said. The launch of the system marks another step forward in the e-commerce giant’s pivot towards enterprise-facing businesses. Offering an operating system will help the company to bring leading retailers into the Alibaba ecosystem. More than 10,000 supermarkets and at least 200,000 retail chain outlets across 676 cities countrywide are already using the platform.