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Amazon’s data prowess and customer knowledge will drive its growth in retail grocery

Amazon and Walmart: SNAP pilot expansion

US: Retailers turn to in-store tech to bring shoppers to their stores
Several startup companies and established tech vendors showed how they can assist retailers in keeping their shoppers spending money in their physical stores at the recent National Retail Federation’s 2020 Vision conference in New York, The Wall Street Journal reports. Some companies displayed AI (artificial intelligence) powered systems that could forecast inventory shortage. Other companies showed off robots that can move items within stores. The companies that most likely struck a chord with retailers however were the ones that displayed in-store tech that could draw people to physical stores or enhance their shopping experience after they arrive. Carrefour, a French company, is currently going through a digital transformation that includes new back-end systems and customer-facing tech at physical stores. Carrefour has a “Flash Store” at its headquarters where it’s testing customer facial recognition for customer payments, as well as other technologies. The company is seeking partnerships to help move its transformation forward, according to Carrefour partnership manager Thomas Andrews. “We are ending the ethos of doing it on our own”, he said.

US: Amazon, Walmart expand SNAP pilot
Two major retailers are accepting federal benefit payments for online grocery orders in a new state. Amazon and Walmart are extending the reach of a pilot program they have been participating in with the U.S. Department of Agriculture (USDA) that allows consumers who receive SNAP (Supplemental Nutrition Assistance Program) benefits - typically referred to as food stamps - to purchase groceries online for home delivery. Amazon is now accepting SNAP payments for online grocery purchases in the greater Seattle area - with plans to soon accept them in the rest of Washington - while Walmart is currently accepting SNAP payments for online groceries throughout Washington.

US: The grocery wars are intensifying with Walmart and Kroger in the lead and Amazon poised to 'cause disruption'
The grocery wars are intensifying, according to a new UBS report. Hard discounters including Aldi and Lidl are expected to ramp up pricing pressure this year by aggressively opening new stores, while regional chains such as Wegmans and Publix are predicted to gain market share, UBS analysts wrote in a 49-page outlook on the US grocery industry. UBS also expects Amazon to "cause disruption" this year as the chain expands its cashierless Amazon Go technology and prepares to open its first conventional brick-and-mortar grocery store. "We expect the food retail sector to face challenging conditions in 2020", the UBS analysts wrote.

Amazon’s next grocery moves will be data-driven
Amazon’s data prowess and customer knowledge will drive its growth in retail grocery and make it an ongoing threat to brick-and-mortar food retailers, according to a new analysis from Brick Meets Click. So far, Amazon has established a “strong beachhead in grocery” but gained only a fraction of the overall market by capturing “the low-hanging fruit”, Brick Meets Click said in its “Guidance for 2020: What’s Next for Amazon in Grocery?” report. The Barrington, Illinois-based strategic advisory firm noted, however, that Amazon has set its sights on becoming the main source of groceries for a higher number of affluent U.S. households.

Biggest retailer in Romania ups minimum wages of its employees by 10%
Kaufland, the biggest retail network in Romania and one of the biggest local employers, will increase the minimum gross income of its employees, including wage, meal vouchers and bonuses, by 10.6%, to RON 3,650 (EUR 765) per month starting March. Kaufland employees will thus get a minimum net income of at least RON 2,135 (EUR 447). For comparison, the minimum gross wage in Romania is now RON 2,230 (EUR 467) per month while the net is RON 1,346 (EUR 282) per month. Moreover, Kaufland said the minimum income level will vary depending on the social and economic particularities of each region, which means that employees in regions with higher than average wages and low jobless rates will probably get higher minimum incomes than those in poorer regions.

Belarus: Eurotorg sees like-for-like sales down in fourth quarter
Eurotorg, Belarus' biggest retailer, has posted a 2.9% like-for-like sales decline in the fourth quarter of its financial year, in a period that saw the business instigate a group optimisation process. A 2.9% decline in like-for-like average ticket was mitigated by a 0.6% increase in like-for-like traffic in the period, the retailer said. Net retail sales were up 5.1% in the period, to BYN 1.13bln (€480mln).

Australia: Fairfield, Chullora and Auburn Big W stores had last day of trade
The first three Big W stores to close had their final day of trade on Friday. The stores in Fairfield, Chullora and Auburn, in western Sydney, were announced last year to be the first to close their doors. Big W said it would be shutting down 30 underperforming stores and two distribution centres over three years. The three stores have held clearance sales over the past few weeks, in an attempt to empty shelves.

UK: Abel & Cole delivers groceries in returnable, refillable packaging
Abel & Cole, an organic food delivery service from the United Kingdom, has introduced Club Zero. This is a new service, claimed to be the first of its kind in the UK, which delivers groceries to consumers in returnable, refillable packaging. No more single-use packaging. Club Zero is a membership service that delivers all kinds of groceries, packaged in a returnable pot. Abel & Cole says they are just in the early stages of this new idea. “We’ve taken a leap and invested in this big idea, so your journey begins with a small membership fee for joining Club Zero. It helps to cover the time being put in behind-the-scenes getting your refills ready and dropped to your door,” the company explained to its customers.

South Africa: Massmart provides trading update, launches new strategy
Walmart-owned, South Africa-based Massmart has published a sales update for its 52-week period ending 29 December 2019. Announcing total sales growth of 3.0% and comparable store growth of 1.5% the retailer also launched a new strategy, dubbed ‘The Road to Recovery’. The new strategy will be built around six pillars, which it believes will form ‘the key building blocks of [its] turnaround’. Massmart reported: Total sales rose 3.0% to ZAR93.7bln (US$6.4bln); Comparable store sales rose 1.5%; Sales from South Africa stores were up 2.7%; Comparable store sales from South Africa stores increased by 1.3%; Sales from stores outside South Africa were up by 5.5% at constant exchange rates; Comparable store sales from South Africa stores increased by 2.1 % at constant exchange rates.

France: Les Mousquetaires’ turnover reaches €45.3bln in 2019
Les Mousquetaires has announced its 2019 results, saying its turnover hit €45.3bln, including fuel. It said its retail turnover rose 2.1% including fuel, 2.2% excluding fuel, to reach €41.2bln. Its AgroMousquetaires division generated a turnover of €4.1bln. Intermarché saw sales increase by 1.9%, excluding fuel, to reach €23.5bln in France. New stores, with 13 added in France, including two hypermarkets purchased from Casino, helped drive growth. This was supported by the role out of new store designs and concepts, which has upweighted its food-for-now and food-to-go offer, while also spotlighting its fresh category and private label ranges more. Intermarché saw volume sales rise 0.4% in 2019, which was pleasing given the market contracted by 1.2%. By format, sales rose by 11.46% in total and by 3.83% on a comparable basis at its Express banner, while its hypermarkets saw sales rise by 5.9% in total, 1% on a comparable basis. At its Netto banner, Les Mousquetaires said the role out of its new store design was proving successful.

Irish retail sales up 3.2% in December
The total value of Irish retail sales rose by 3.2% in December 2019, compared with the same month the previous year, according to Retail Ireland, the group that represents the Irish retail sector. Volume sales were up 5.4% for the period. On a month-to-month basis, value sales rose by 2.9%, while volume sales were up 2.7%. “Retailers had a broadly positive Christmas with sustained growth across most of the major categories", commented Retail Ireland director Arnold Dillon. "The volume of sales is growing significantly faster than the value of retail sales, which means consumers are getting more for their money".

Pakistan: Qeemat Punjab app launches home delivery service of fruits & vegetables in 4 major cities
Commodities price checking and complaint registering mobile app ‘Qeemat Punjab’ developed by Punjab Information Technology Board (PITB) has launched “Home Delivery Service” feature to provide goods at regulated prices at citizen`s doorstep. The feature Fresh Online Free Home delivery service is covering the cities of Lahore, Rawalpindi, Islamabad and Multan. A total of 46 items including fruits and vegetables are listed on the Fresh Online order form.

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