Retailers may not survive
July 10, 2018Plant Based Foods
July 10, 2018
Welcome to the unveiling of Winsight Grocery Business’ annual ranking of the nation’s Top 20 Food Retailers, which plots the industry’s most influential companies in the U.S. grocery space. Based on sales data from Kantar Consulting, a foremost global research, insights and information consultancy, the Top 20 list provides a well-composed snapshot of the top food sellers, 10 of whose roots are tied to pureplay grocery, with the balance of others descending from nongrocery lineage, including mass, drug, club, dollar and convenience.
As a composite, the Top 20 contenders, to greater and lesser degrees, have been busy investing in e-commerce, training, talent and infrastructure to reposition their brands for a new era. When detached as a subset, the 10 grocery contenders on the Top 20 leaderboard—Walmart (1), The Kroger Co. (2), Albertsons Cos. (6), Ahold Delhaize (7), Publix (8), Aldi (11), H-E-B (14), Wakefern Food Corp. (15), Meijer (18) and Southeastern Grocers (20)—represent the vanguard of multicapable retailers conveying relevance and value to several shopper groups simultaneously. A key to the endurance of the leading performers of late was an awakening—even before Amazon went whole-hog into the food fray last year when scooping up Whole Foods Market—that new stores are no longer the sole antidote to growing their businesses. In some cases, shedding stores is proving to be an equally important element in the delicate balancing act of capital investments and measured curtailments.
Elley Symmes, senior analyst of grocery retail, sales and shopper practice, Americas, for Kantar Consulting, foresees in the not-too-distant future a reranking of the food chain, courtesy of a trifecta of what was once referred to as “alternate channel players” taking over the leaderboard. “Walgreens, Aldi and Amazon will outpace their grocery retailer counterparts, growing sales above the industry average by a minimum of 200 basis points,” she says.
By 2023, Symmes anticipates Walgreens will surpass Kroger as the second largest grocery seller in the U.S., while Amazon.com is forecast to jump from No. 15 to the seventh largest grocery seller. The net result of this is a complicated competitive retail landscape for the traditional supermarket channel, whose incumbents’ success will be tied closely to their abilities to “look at the whole industry—and not just focus on conventional supermarkets as the primary competitor.” Symmes reiterates the message to allied trading partners working with conventional grocery chains, be it vendors, brokers or financial firms, all of which “must also understand this dynamic to best serve [retail food] customers.”
We take a closer look at the nation’s Top 20 Food Retailers, ranked by estimated annual revenue, on the following pages.
Methodology: The primary sources for the data for WGB’s Top 20 Food Retailers is based on Kantar’s proprietary forecasting tools, which are composed of publicly traded retailers’ annual 10-K reports and other public financial data, retailers’ websites, AggData and Kantar’s ShopperScape database, among others. Kantar formally updates all of its forecasts every six months; data for the Top 20 food retailers list herein is based on its most recent round of updates ending June 1, 2018.
1 Walmart
Top banners: Walmart, Walmart Supercenters, Neighborhood Markets
HQ: Bentonville, Ark. • Store count: 5,295
Walmart’s new sales momentum is all the more impressive when considering that for the first time in the company’s more than 50-year history, it’s gaining share and winning new sales without adding hundreds of new U.S. stores. Rather, it’s getting its existing stores to work harder, particularly in the area of online grocery pickup, now offered in more than 1,400 U.S. locations. The emphasis on convenience has come in addition to price, not instead of it: Recent analyst reports indicate that the big retailer is again widening its advantages over conventional competitors as it zeroes in on the hard-discount threat on one side, and Amazon on the other.
2 The Kroger Co.
Top banners: Kroger, Ralphs, Harris Teeter
HQ: Cincinnati
Store count: 2,779
Perhaps taking some lessons from the one company that precedes it on this list, Kroger is in early innings of a strategic reset as it seeks to regain its sales gallop. The $900 million, three-year Restock plan has so far brought new investment in the meal-kit company Home Chef and an ambitious plan to license e-commerce technologies from innovative British retailer Ocado.
3 Walgreens Boots Alliance
Top banners: Walgreens, Duane Reade, Boots
HQ: Deerfield, Ill. • Store count: 8,100
The pharmacy-led health and well-being enterprise operates one of the largest pharmaceutical wholesale and distribution networks in the world. In addition to its standing as one of the globe’s largest purchasers of prescription drugs, the company’s U.S. division includes 8,100 stores in all 50 states. As it continues to expand its grocery offerings stateside, the chain holds a new title as the first drug chain in the U.S. to offer a line of Chef’d meal kits to 30 of its eponymous and Duane Reade stores in Chicago and New York, respectively, as part of a partnership with Smithfield Foods.
4 CVS
Top banners: CVS, Navarro, Longs Drugs • HQ:Woonsocket, R.I. • Store count: 9,800
CVS officials have been talking about the “retailization of healthcare” for some time, and it’s showing when it comes to food. The drug chain has made healthy foods a major element of its front-of-the-store offering, showcased this spring in a radical store redesign.
5 Costco Wholesale Club
HQ: Issaquah, Wash.
Store count: 520 in 44 U.S. states and Puerto Rico
After turning around its yearlong sales slump in early 2017 and seeing improved fortunes with its e-commerce business—which jumped an impressive 37% during its most recent quarter—warehouse club leader Costco has a new spring in its step. Renowned for its employer-of-choice practices, Costco most recently moved to raise its starting minimum wage to $14 an hour, a $1 increase for entry-level positions.
6 Albertsons Cos.
Top banners: Albertsons, Safeway, Jewel-Osco •HQ: Boise • Store count: 2,200
Albertsons is in the midst of a high-speed reinvention. While zooming toward completion of its Safeway integration, it’s hurtling into a merger with Rite Aid in a move that should provide an immediate pop to sales, shoot the company onto the public markets and, officials say, create a “differentiated retailer.” Albertsons is also at work on technology initiatives ranging from artificial-intelligence-powered loyalty to contactless payments and an “infinite aisle” marketplace as it pushes for $1 billion in digital sales.
7 Ahold Delhaize
Top banners: Giant, Stop & Shop, Food Lion
HQ: Carlisle, Pa.
Store count: 2,000
Observers are anxious to see how Ahold Delhaize, buoyed by central cost savings and set free to pursue local merchandising and branding initiatives, can bring new life to its U.S. brands, such as its pioneering Peapod online unit.
8 Publix
Top banners: Publix, Publix GreenWise
HQ: Lakeland, Fla.
Store count: 1,187
Facing increasing competition in its extended Southeast territory and its home state of Florida, where it remains the dominant grocer, Publix is investing $1.53 billion this year on new stores and remodels alongside upgrades to technology and real estate.
9 Target Corp.
HQ: Minneapolis • Store count: 1,829
Posting traffic growth of 3.7% in its most recent first quarter and driving same-store sales growth of 3%, Target nailed its strongest quarterly performance in more than 10 years. Its digital sales are also tracking strong, increasing 28% in Q1, while it continues to focus its cap-ex spending on upgrading its brick-and-mortar stores. As its Restock campaign commences, Target has launched a new Drive Up service (now available in more than 250 stores); it also has rolled out same-day delivery from more than 700 stores, enabled by its recent acquisition of Shipt.
10 Aldi
HQ: Batavia, Ill.
Store count: 1,600
Deep into an expansion and remodeling campaign that will bring its store count to 2,500 U.S. locations by the end of 2022, Aldi also offers online grocery ordering via Instacart in the Atlanta, Chicago, Dallas and Los Angeles metro markets. The chain’s low-price and private-brand-heavy model has enabled the discount retailer to become one of the fastest-growing chains in the country.
11 Amazon.com
Top banners: Whole Foods Market, Amazon Go
HQ: Seattle
Store count: 470
Its Amazon Go store is pushing the boundaries of technology in a retail setting and its reputation for service and selection in online shopping is the gold standard, but Amazon is only getting started. Its acquisition of Whole Foods a year ago triggered dozens of similar partnerships between virtual and physical retailers and gave the Seattle-based e-retailer a canvas upon which to build a U.S. physical store base—not to mention an attractive demographic of shoppers to capture behind its powerful Prime loyalty program, which is now offerring discounts in the Whole Foods chain and offer fast delivery through Prime Now.
12 Dollar General
HQ: Goodlettsville, Tenn. • Store count: 14,761
To support its ongoing growth, Dollar General is seeking to add 7,000 new jobs to power its fiscal 2018 growth plan, which includes approximately 900 new stores, 1,000 store remodels and 100 replacement stores. The chain is also expanding its digital platform, including its standing as the first dollar-store chain to move into mobile checkout with a new app, DG Go, which allows users to scan and pay for products directly from their phone and bypass the checkout line altogether. The company posted strong net and same-store sales growth in its most recent 2018 first quarter, including a 9% and 2% increase, respectively.
13 H-E-B
Top banners: H-E-B, H-E-B Plus, Central Market
HQ: San Antonio
Store count: 340
The ongoing moves at H-E-B reflect the top priority the largest private employer in Texas is placing on its omnichannel offerings, including its recent appointment of Jag Bath to the newly created position of chief digital officer. The move follows a series of strategic investments in technology and partnerships that H-E-B has forged to enhance its digital offerings, including H-E-B to You Delivery and H-E-B Curbside, which is available in more than 100 locations and is on track to reach 200 locations in 2018.
14 Seven & i Holdings Co. Ltd.
Top banners: 7-Eleven
HQ: Tokyo
Store count: 9,077
With 7-Eleven Inc. approaching 10,000 convenience stores in the United States, its parent company, Japan’s Seven & i Holdings Co. Ltd., is increasingly banking on the North American division for growth as its Japanese business sees sales slow.
15 Rite Aid
HQ: Camp Hill, Pa. • Store count: 2,500
Soon to be united with Albertsons, Rite Aid is set to bring a new edge to health, plus new private brands and a new CEO, to the combined company.
16 Wakefern Food Corp.
Top banners: ShopRite, Price Rite, The Fresh Grocer
HQ: Keasbey, N.J.
Store count: 207
The $15 billion ShopRite coop continues to grow behind entrepreneurial operators offering unsurpassed local market expertise and crowdpleasing prices.
17 Dollar Tree
Top banners: Dollar Tree, Family Dollar
HQ: Chesapeake, Va.
Store count: 14,957
It’s death by a million pinpricks—or, more precisely, by about 15,000—for competitors of Dollar Tree. Its namesake single-pricepoint stores continue to see locations and sales grow at a steady pace in part by tailoring offerings to seasons and occasions that resonate with its bargain-minded shoppers. Performance of its acquired Family Dollar stores has been choppy as it seeks a niche in the discount crowd.
18 Alimentation Couche-Tard
Top banners: Circle K, Kangaroo Express
HQ: Laval, Quebec
Store count: 8,346
The leading convenience retailer in Canada and the largest independent c-store operator by U.S. company-operated stores, Couche-Tard recently completed the integration of CST Brands while rebranding its Corner Stores to the Circle K banner and hiring the company’s first chief marketing officer.
19 Meijer
Top banners: Meijer, Bridge Street Market (summer 2018)
HQ: Grand Rapids, Mich. • Store count: 235
As it prepares to open six small-format stores in urban settings by 2021, including one on the west side of its home turf in Grand Rapids, the supercenter pioneer is also adding six new flagship stores in Michigan, Indiana, Illinois and Wisconsin this year. It’s also streamlining the checkout experience with the addition of Shop & Scan smartphone app-based scanners.
20 Southeastern Grocers
Top banners: Winn-Dixie, Bi-Lo, Harveys
HQ: Jacksonville, Fla. • Store count: 575
A whirlwind trip through Chapter 11 earlier this year restructured heavy debts and gave the parent of Winn-Dixie, Bi-Lo, Harveys and Fresco Y Mas a 100-store haircut, but it has quickly resumed the pace of remodels and is prepping a new chainwide loyalty program.
