Posts tagged with "Kroger"

Self-checkout now comprises nearly 40% of grocery checkout options

November 21, 2022

Despite the frequent complaints from consumers and media reports about self-checkout lanes, grocers are continuing to push forward with the technology as labor challenges persist and consumer shopping habits evolve. Catalina, a company that transforms data into consumer insights, notes that more retailers are pivoting from manual to self-checkout lanes, reports Retail Dive.

The number of self-checkout lanes in America has increased by 10% in the last five years, and Catalina estimates that they now make up 38% of the checkout lanes in U.S. grocery chains. 

Self-checkout lanes are becoming more popular, due to social distancing measures sparked by the pandemic and the availability of automation technology, the firm said. A few retailers, such as Walmart, Kroger and Dollar General, have even started testing self-checkout-only stores, per CNN reporting cited by the firm.

Offering a mix of both manual and self-checkout lanes can appeal to a wider variety of shoppers and serve different types of shopping trips, Catalina says, based on a new study. The findings are based on an analysis of 4.5 billion transactions made by 245 million consumers in the United States in 2021.

In fact, consumers who use both self-checkout stations and staffed checkout lanes consistently have the highest retention rates and best customer value, bolstering the case for retailers to take a hybrid approach to their front ends, according to Catalina.

Catalina found that the group of shoppers who used both methods includes a mix of demographics, with consumers tending to have a higher annual household income compared to shoppers who used one checkout type exclusively.

In 2021, 39% of shoppers identified as using both checkout types depending on what they were buying, with usage evenly divided between self-checkout and manned lanes. People who used a mix of both methods had the highest customer value ($1,720) and completed the most shopping trips (36) per year in 2021, compared to people who used only one of the methods. 

“In our view, retailers should evolve to create a balance of self-checkout and manned lanes to accommodate more multi-dimensional shopper profiles, improve customer experience, enable cost efficiencies and maximize sales for the long term,” Wesley Bean, U.S. chief retail officer for Catalina, said in a statement.

The firm also found through a pilot with an unidentified regional grocer that self-checkout users who received coupons drove four times more sales growth than the self-checkout lanes with suppressed incentives.

Of the 12% of surveyed shoppers who said they only use self-checkout, Catalina found they tended to fill smaller baskets, which the firm said suggests they are likely buying household and pantry items in other channels, like at mass retailers or online. Catalina also pointed out that some retailers cap the number of items shoppers can buy using self-checkout.

Self-checkout-only tends to draw 19- to 24-year-olds and also people born between 1928 and 1945, known as the Silent Generation, the firm said.

Meanwhile, 49% of consumers still prefer only using manned lanes. That group mainly consists of Baby Boomers and Silent Generation consumers with household incomes under $100,000 and a high school education, Catalina’s research found.

“Until recently, shopper profiles generally grouped consumers by demographics and where they are on the purchase funnel,” Bean said. “Now, retailers can layer in check-out preferences and shopper affinities to create a more personalized shopping experience and reach individual shoppers with messages that matter.”

While manual checkout remains popular, the study’s findings underscore that grocers can reach more consumers and meet more shopping needs by mixing in self-checkout. Grocers who only offer one method over another may discourage certain customer demographics or purchasing behaviors, such as consumers using self-checkout for quick trips or Baby Boomers preferring traditional lanes.

Research contact: @RetailDive

Americans can’t afford gas—and that’s bad news for beef jerky

April 15, 2022

Gas doesn’t just fuel cars; it also powers Marlboros, Red Bull, and Doritos. In fact, an estimated 80% of the fuel purchased in the United States comes from stations with convenience stores, which bring in about $475 billion of revenue each year, according to IBISWorld data.

And more specifically, reports CNN, one-quarter of that take comes from the 44% of gas guzzlers who come into the store each time they hit the pumps to purchase groceries, snacks, beer and cigarettes.

So as Russia’s invasion of Ukraine and record-high inflation rates cause crude oil prices to shoot up, executives at PepsiCo, General Mills, and Conagra (the company behind Slim Jim beef jerky) are biting their nails.

The national gas average price in the United States was about $4.10 per gallon on Wednesday, April 13, according to data compiled by AAA. While that’s a little bit under the record high, it’s still high enough to make 60% of Americans reconsider their driving habits and make some lifestyle changes, according to a survey by the automotive service company.

Less driving and fewer trips to the pump typically serve a double hit to convenience store retailers: a loss of foot traffic and money left for discretionary purchases.

“Our [convenience store] retailer contacts have recently highlighted some signs of strain on consumer spending as gas prices remain stubbornly high, with one retailer noting a slowdown in March in-store purchases across categories,” wrote Bonnie Herzog, managing director at Goldman Sachs, in a research note Wednesday.

Rising gas prices also appear to be weighing on packaged snack food sales. “This is evidenced by the slowing volume trend seen across most major snack food categories and outright volume declines for single-serve chocolate and jerky meat,” she wrote.

About 83% of purchases made at convenience stores are for immediate consumption, or impulse buys,—typically the first thing to go when inflation increases.

“Anytime you sell immediate consumption and people’s pocketbooks are pinched you could lose sales,” said Jeff Lenard, vice president of Strategic Industry Initiatives at the National Association of Convenience Stores.

Gas prices are top of Americans’ minds, said Jason Zelinski, director of Convenience Channel Accounts at NielsenIQ. But they haven’t greatly impacted other sales yet. He noticed a shift toward increased visits to gas stations—people are topping off their tanks more frequently instead of paying for a full tank.

Consumer Edge, a data insights company, looked at the top three fuel retail brands in the United States (Costco, Sam’s Club, and Kroger) and noticed a spike in fuel sales as a percentage of total sales through the month of March.

“Although average fuel prices per gallon have gone up, some consumers can no longer afford to fill their tanks each trip and are making the same-priced transactions for fewer gallons, but filling up more often,” they wrote.

And while there are certainly fears of an upcoming recession, unemployment remains at record lows. Americans are still driving to work. Walmart, Costco and convenience stores are tying product promotions or discounts to the purchase of gas in order to encourage store visits.

Research contact: @CNN

Kroger identifies ten emerging food trends

January 25, 2022

Cincinnati-based supermarket chain Kroger has identified ten food trends that will accelerate and take hold in 2022. The trends may be broken down into three categories: flavors, premiumization, and behavioral shifts brought on by the pandemic, reports Food Business News.

Four flavors the retailer sees gaining ground in the year ahead include umami, everything seasoning, tequila, and nostalgic flavors that deliver comfort.

“Asian cuisine has long understood how ingredients high in umami help elevate other ingredients and round out flavors in a dish, but the umami trend is exploding across new products, multicultural cuisines, traditional cooking, and hybrid mash-ups,” according to Kroger.

The savory flavor of tequila follows the umami trend and leads into the second section of trends focused on premiumization. Consumers will upgrade their meals in 2022 by purchasing products that deliver plant-based eating, are local, and deliver restaurant-quality experiences.

“Consumers continue to focus on the health of the planet, not just through plant-based foods, but also by reducing their waste impact with upcycled ingredients and more recyclable packaging,” Kroger said. “Plant-based foods are now being purchased for indulgence, comfort, and nostalgia, rather than being solely known as the healthier choice for our bodies, while still helping consumers lower their carbon footprint.”

An interest in sustainability is prompting some consumers to consider where their food comes from. That interest is leading to rising demand for food and ingredients grown and processed locally.

Kroger also sees consumers embracing more premium products as they seek to raise the level of their dining experiences at home. This is leading to interest in grass-fed beef burgers and hot dogs, goat cheese and bacon pinsa crust style pizza, and kimchi meatballs.

Behavioral shifts Kroger sees in 2022 will be around health and beauty, sharing, and a greater role for charcuterie in meal occasions.

Demand for products that contribute to health and beauty will continue in the coming year as consumers seek collagen-rich bone broths, antioxidant, probiotics and omega-3 fatty acids.

Sharing at meals has been a trend for some time, but Kroger sees family-packs focused on specific dietary needs like low carbohydrate, plant-based or vegan gaining ground in 2022.

Along the same lines, Kroger’s trend researchers predict charcuterie will move from a sharable appetizer to playing a more prominent role at breakfast and dessert.

“Unlocking these trends allows us to prepare for the year ahead, adapt our offerings, and innovate within our brands to ensure we continue to provide customers exactly what they need and want to delight themselves and their guests in 2022 and beyond,” said Juan De Paoli, vice president of Kroger’s Our Brands private label business.

Research contact: @FoodBizNews

Mochi ice cream goes mainstream

December 10, 2019

Walk into any supermarket today and you’ll find what used to be exotic edibles: They are called mochi—and they are small, frozen, bite-size balls of ice cream encased in rice dough.

In just the past three years, this finger food confection has evolved from an exotic niche dessert to a mainstream product, popping up nearly everywhere, including malls, street fairs, and major supermarket chains, CNN reports.

Mochi was invented in the United States nearly three decades ago, and was originally made using ice cream flavors with an Asian flair.

“It’s been around since the 1990s, but mochi ice cream was mostly available in specialty Asian food stores or on menus of Japanese restaurants in flavors like green tea, red bean and mango,” said Russell Barnett, a food industry veteran and chief marketing officer of Los Angeles-based My/Mo Mochi.

To help bring it to the masses, My/Mo created a flavor list most consumers felt instant familiarity with, such as chocolate sundae, S’mores, cookies & cream, strawberry, double chocolate and mint chocolate chip.

“I grew up eating vanilla, chocolate and strawberry ice cream. Green tea and red bean weren’t a common part of the flavor profile in most households,” he told CNN.

Barnett recognized the inherent appeal of mochi ice cream to Millennials, a group he calls “a snacking generation.” Mochi is a portion-control snack of about 110 calories per ball, easy to hold and eat on the go. “We just retooled and adjusted it for today’s consumers,” he said.

My/Mo Mochi ice cream (which is gluten-free with some dairy free varieties) is produced at a manufacturing facility in Los Angeles and sold in packages of six, CNN reports. They’re also sold individually in portable freezers that Barnett calls self-serve “ice cream bars.”

Currently, My/Mo Mochi is now available in 20,000 stores nationwide. “We are in Target, Kroger, Walmart and everything in-between,” said Barnett. “We are reaching the masses where they shop.”

Competing mochi ice cream brands include Bubbies, Maeda-En and Mr. Mochi, but the My/Mo Mochi brand has captured close to 90% of market share, according to data from Nielsen. The brand’s sales were $175 million in annual revenue in 2019, according to Barnett.

Research contact: @CNN

UK ‘player’ Hamleys may expand into U.S. toy sector

December 11, 2018

Although Toys R Us has returned as a pop-up store at Kroger for the holidays (and maybe longer), the retailer that used to rule the toy realm is just a shadow of its former self. And, without the industry leading Toys R Us megastores, nationwide, an $11 billion toy industry has been left with no dominant retail player in the sector, reported CNBC on December 10.

Companies like TargetWalmartAmazon and Kohl’s are trying this holiday season to sell more toys to kids and their parents, but the verdict is still out on which company will best fill the void that Toys R Us left behind, the news outlet said.

But now—seeing a huge opportunity— one iconic, international toy retailer could soon make its first move into the States with a flagship location in New York, and plans for a wider rollout of stores to follow. British toy retailer Hamleys is close to finalizing a deal for roughly 30,000 square feet at 2 Herald Square in Manhattan, near Macy’s and Victoria’s Secret, a person familiar with those negotiations told CNBC, requesting anonymity because the talks are confidential. The store is expected to open in 2020, should the deal go through, said the source—cautioning talks are still ongoing between the tenant and landlord and nothing has been finalized.

According to CNBC, Hamleys has been around since 1760 when it opened its first location in England. Today, it has a flagship shop on tourist destination Regent Street in London, in addition to locations all across the Middle East, Asia and Africa. And in North America, Hamleys has three stores in Mexico.

In the United Kingdom, Hamleys’ stores are known to draw kids in for exciting experience, including the opportunity to play with life-size Lego figures. Often, employees dress up as fictional characters to entertain shoppers. This excitement in stores is what many people say the toy industry is now missing in the United States, CNBC reports. And shoppers prefer it to the online experience, where it is impossible to pick up a toy and look at it, or try it.

After an opening in New York, Hamleys would likely mote into other  major markets such as Los Angeles, Chicago, and Miami to open store;  and would consider moving into some of the more profitable malls in the country, said the person familiar with its plans.

Hamleys didn’t immediately respond to CNBC’s request for comment.

Research contact: @laurenthomasx3

Kroger and Nuro partner to pilot test autonomous grocery delivery

August 17, 2018

Watch out, Peapod and FreshDirect—and grocery delivery drivers nationwide. In June,  Kroger, which, with 2,800 food stores in 35 states, claims to be America’s largest supermarket retailer; and Nuro, which refers to itself as the “maker of the world’s first fully unmanned road vehicle,” announced a new partnership dedicated to offering same-day delivery of grocery orders placed through Kroger’s ClickList or Nuro’s app.

On August 16, the two companies announced the location for a pilot test of their new services, starting immediately in Scottsdale, Arizona. During the trial, the Kroger store, Fry’s Food, will fulfill orders placed on its site (frysfood.com) or via the Fry’s Food Stores mobile app. The price for the service will be a flat fee of $5.95, with no minimum order required. Grocery orders can be scheduled for same-day or next-day delivery by Nuro’s fleet of self-driving vehicles.

“Scottsdale is proud to be the home of Kroger and Nuro’s partnership,” said Scottsdale Mayor Jim Lane. “We welcome innovative technology that can benefit the lives of Scottsdale residents. We feel this partnership holds tremendous potential and promise; and offers our residents real, not-yet-experienced convenience for everyday routines.”

“We’re excited to launch our autonomous vehicle delivery pilot with Fry’s in Scottsdale,” said Kroger Chief Digital Officer Yael Cosset. “Kroger wants to bring more customers the convenience of affordable grocery delivery, and our pilot with Nuro will help us test and learn to understand customer acceptance of autonomous vehicles in our seamless offering. We thank Arizona Governor Doug Ducey, Scottsdale Mayor Jim Lane, and the Scottsdale community for being terrific partners and for supporting customer-focused innovation.”

“Arizona is home to some of the most innovative autonomous vehicle testing,” said Nuro Co-Founder Dave Ferguson. “We’re proud to contribute and turn our vision for local commerce into a real, accessible service that residents of Scottsdale can use immediately. Our goal is to save people time, while operating safely and learning how we can further improve the experience.”

Nuro will begin the pilot using its self-driving Toyota Prius fleet and will introduce its custom R1 driverless vehicle this fall. The unmanned delivery pods—about half the size of a Toyota Corolla—currently top out at about 25 miles per hour. Nuro has fitted Prius models in its fleet with its driverless software and sensors for the first Kroger pilot tests.

Dave Ferguson and co-founder Jiajun Zhu say they “have devoted their careers to robotics and machine learning”—most recently as Principal Engineers at Google’s self-driving car project (now Waymo). They founded Nuro in 2016 to harness the power of robotics and artificial intelligence to solve new challenges at a global scale.

“Unmanned delivery will be a game-changer for local commerce,” said Ferguson. “Our safe, reliable, and affordable service, combined with Kroger’s ubiquitous brand, is a powerful first step in our mission to accelerate the benefits of robotics for everyday life.”

Research contact: @KrogerNews