Casino in talks to sell discount chain Leader Price to Aldi

Debt-laden French retailer Casino is in talks to sell its French discount store chain Leader Price to German low-cost rival Aldi.

The move, which confirms a report by French daily Les Echos, comes as Casino CEO and controlling shareholder Jean-Charles Naouri is hunting for ways to ease the company’s debts – and those of parent company Rallye – in part via asset sales.

Casino said in a statement that following an expression of interest from Aldi France, the two groups had “entered into discussions with a view to have Aldi France submit a binding offer,”

Les Echos said earlier that Casino was poised to sell Leader Price, which had 2018 sales of 2.5 billion euros ($2.8 billion), to Aldi in a deal estimated to be worth 400 million euros.

A sale of Leader Price was expected by analysts after Casino said last month it was targeting the sale of 2 billion euros worth of assets in addition to the 2.5 billion initially sought to reduce its debt burden.

The retailer has mandated BNP Paribas to handle a possible deal, Les Echos added.


Meijer makes checkout even easier

Midwestern retailer Meijer has completed a transformative 15-month initiative to streamline the checkout process at all of its stores.

The company has now introduced Shop & Scan technology at all of its stores across the Midwest.

“As we’ve rolled the program out in six states, the response has been incredibly enthusiastic,” said Stephanie Brackenridge, director of customer experience for Grand Rapids, Mich.-based Meijer. “Customers have appreciated the ability to have a choice in shopping how they want, depending on how their day is going. Many are finding the opportunity to personalize their store visit with a cell phone is a great way to save time and help avoid lines.”

Shop & Scan works through an innovative mobile app that allows customers to shop and bag as they go, giving them the opportunity to avoid lines and personalize their shopping depending on their day.

Once they download the free Meijer Mobile App, customers use Shop & Scan  to scan bar codes on items and bag their own groceries. A running total of items purchased is viewable as they shop throughout the store. Once a customer has finished shopping, they simply scan their phone at a self-checkout lane and pay, making the checkout experience quick and easy.

Brackenridge said that the most popular features among Meijer customers included the integrated shopping list, running total, and the ability to clip any available mPerks loyalty program coupons for items scanned.

In addition to Shop & Scan, the retailer offers Meijer Home Delivery and a pickup option at all 246 stores in six states, providing customers multiple ways to shop the retailer’s stores depending on their needs for that day.

Since the original pilot launch last year in Grand Rapids, the Meijer Mobile app has been downloaded more than 1.5 million times, while the initiative has steadily expanded to stores throughout Michigan, Indiana, Ohio, Illinois, Wisconsin and Kentucky. Once the app was downloaded, more than 80 percent of Meijer customers have repeatedly used Shop & Scan as part of their shopping experience.


Ahold Delhaize adds digital shelves in European stores

With Europe as its proving ground, there is potential for Ahold Delhaize to bring this technology stateside to its banners where several retailers, from Albertsons to Kroger, are already adopting a variety of digital checkout solutions.

In the U.S., Kroger is leading the charge with digital shelf technology. It installed Kroger Edge, a digital shelf system in partnership with Microsoft, in 200 stores that displays pricing, advertisements and nutritional information. As users walk down the aisles, it also communicates with their smartphones and highlights products that they’ve added to their digital shopping lists in an attempt to provide a customized shopping experience.

Electronic shelf tags offer a number of benefits to retailers, primarily when it comes to flexibility. The shelves can resolve issues with missing tags or prices that haven’t been updated and when it comes to the task of changing price tags, it can save substantial labor power. In lieu of swapping out paper tags or printing new tags, the digital shelf displays can be updated much quicker.

The technology also opens the door to dynamic pricing, which allows for price changes multiple times a day potentially. For example, the price tag could switch depending on demand or availability. Produce and other food items nearing their expiration date could quickly pivot to sell faster. This has been cited by some as a way to help cut down on the amount of food waste produced at supermarkets.

Electronic shelf tags have potential applications for self-checkout as well, allowing customers to avoid waiting in line. Users can scan the shelf tag with their mobile phone, which is also integrated with their preferred payment method. Reducing friction in a self-checkout process is key for consumer adoption, with many customers finding self-checkout services frustrating because they largely are required to take over the entire cashier role. The shelf tags alleviate some of this friction by streamlining the scanning process and preventing the shopper from having to still go through the checkout lane.

Several retailers have already adopted a variety of digital checkout solutions including Albertson’s self-checkout stations and Amazon’s cashierless Amazon Go stores. Giant is also piloting self-checkout technology with its partnership with Silicon Valley’s startup Grabango. The technology uses AI and computer vision to see what customers are picking up as they shop.


Walmart unveils enhanced supercenter

Walmart is upping its supercenter experience.

The retail giant officially opened its remodeled supercenter in Dallas, Georgia. The store offers an enhanced shopping experience in many departments, expanded assortment and displays.

Along with opening the doors to the supercenter, Walmart debuted its new standalone health clinic format, Walmart Health, which is adjacent to the remodeled store. It offers a full array of health and wellness services, with primary care, lab tests, X-rays, counseling, dental, optical, hearing and community health education.

The remodeled supercenter boasts an enhanced omnichannel shopping experience. Customers who use the chain’s free Pickup service to have online orders delivered to the store can leverage an in-store pickup tower (a tall, vending machine-styled kiosk holding customer orders) using their mobile device. Walmart has also renovated an outdoor pickup area for online grocery orders with a newly-installed canopy.

In-store enhancements include a new pharmacy concept that, based on customer feedback, is designed to simplify and enhance customer service while reducing friction and wait times. In addition, the redesigned vision center features multiple service areas so customers can decide how and where they want to receive service.

The remodeled store also boasts an in-store retail veterinary clinic, Essential PetCare. The clinic provides affordable wellness services for dogs and cats, including routine care, vaccinations, lab work and the treatment of minor illnesses such as ear infections and common skin conditions. (Walmart opened its first in-store Essentials PetCare in Port Richey, Florida, in 2016.).

Other redesigned departments include an upgraded electronics department with interactive displays, a refreshed baby department with strollers at floor level allowing shoppers to compare products more closely, and an expanded hardware department with a greater assortment of industrial and power tools. The remodeled auto center has been made over to include a dedicated lounge area where customers can wait for their cars to be fixed.


Amazon extends food tie-up with British supermarket Morrisons

Amazon and Morrisons have agreed to extend a partnership which already allows customers to order their shopping from the smallest of Britain’s big four supermarket groups and have it delivered by the U.S. online giant.

Periodically mooted as a possible bidder for Morrisons, Amazon has been slowly extending its food service in Britain, but market research firm Kantar Worldpanel estimates its market share is so far less than 1%.

The new Amazon agreement was for “a number of years rather than on a rolling basis, and will be exploring new opportunities to innovate and improve the shopping experience,” Bradford, northern England, based Morrisons said.

Morrisons, which has a 10.1% market share, trails market leader TescoSainsbury’s and Walmart’s Asda in annual sales.

It first tied up with Amazon in 2016 with a wholesale supply deal, whose scope has grown. In June the companies agreed to expand the “Morrisons store on Prime Now” service to more cities across Britain, including Glasgow and Newcastle.

Doug Gurr, Amazon’s UK country manager, said its relationship with Morrisons was an important part of its UK grocery growth plan.

Customers can already order a full Morrisons shop online, which is then picked at a local Morrisons store, and delivered by Amazon. There is also an option for one hour delivery.

Although Morrisons Chief Executive David Potts was vague on what the exploration would entail and declined to provide the agreement’s duration, he said as a wholesaler to Amazon the British company could be “part of their ambitions”.

“When you’re exploring, life can be a bit unclear … We achieve capital light growth by leveraging partners’ knowhow and assets,” he told reporters.

Analysts have also suggested Morrisons could be a candidate for a takeover by an overseas private equity firm, given the 24% fall in its share price over the last year and the weakness of the pound making deals cheaper.


Amazon may launch a hand recognition payment system for Whole Foods

According to New York PostAmazon is testing inside Whole Foods a payment system codenamed “Orville” that scans human hands to ring up purchases. The e-commerce giant is reportedly using its New York employees as guinea pigs by installing the system on a handful of vending machines selling chips, sodas and phone chargers in its offices.

Unlike most biometric systems that require you to touch the surface of a scanner, Amazon’s take on the technology apparently doesn’t need you to physically touch any device. The company’s technology uses computer vision and depth geometry to identify the size and shape of your hand before charging the credit card you have on file.

Further, you don’t even need to have your phone with you when you shop. That could make shopping at Whole Foods even more seamless than at Amazon Go stores, where you can pick up goods and then leave as long as you check in through a turnstile using a QR code in your app. You need to be a Prime member, however, for hand-based payments to work.

Stephanie Hare, a technology ethics researcher, told the Post that the company probably decided to give customers the option to pay with their hands instead of their face, because it would feel less like a mugshot. She warns, however, that it might not be wise to give a company your biometric data and risk being a data theft victim, especially now that there are “a couple of nation states that are really good at stealing data…”

The Post says Amazon is hoping to roll the technology out to a handful of Whole Foods stores by the beginning of next year. It has no specific locations in mind for the launch, but it’s planning to make the system available at all the supermarket’s US locations. For now, Amazon is apparently refining the technology so it can bump its accuracy up from within one ten-thousandth of 1 percent to a millionth of 1 percent before launch.


Target is launching grocery brand Good & Gather

After years of rolling out private-label brands in apparel and home goods, Target is starting a new grocery brand.

Products from the new line Good & Gather will hit Target stores beginning Sept. 15. The retailer said that by the end of 2020, the brand will have more than 2,000 items — everything from organic pizza crusts, milk and eggs, hazelnut and peanut butter spreads, frozen veggies, salad mixes and pastas. Target said it expects Good & Gather will be a multibillion-dollar brand — and the largest of its private labels.

“We’ve been hard at work [on this] for the last couple years,” said Stephanie Lundquist, head of food and beverage at Target. “Food and beverage play such an important role for Target’s business … for the Target experience.”

Today, nearly 75% of Target shoppers in stores are adding at least one food item to their baskets, she said, and when they do, their basket sizes are two times larger.

“One of our biggest strengths is the fact that we are a one-stop shop for our guests,” Lundquist said.

Still, analysts have often criticized Target’s fresh food offerings as lackluster and an afterthought. Shoppers can find national snack brands there, like Frito-Lay chips, Chobani yogurt and Cheerios cereal. But people don’t often seek out Target as a destination for all of their groceries, as they might at Walmart. Instead, a loaf of bread or a box of granola bars have been add-ons to Target baskets already filled with makeup and cleaning and office supplies.

“Grocery is the one spot in their stores they haven’t fixed yet,” said Brian Yarbrough, an analyst at Edward Jones. “But they are in a much better spot than they were four or five years ago.”

The potential is there. Walmart gets more than 50% of its business from grocery versus about 20% for Target, Yarbrough added. And consumers are increasingly willing to buy private-label products at grocery stores.

Target’s grocery business has had seven consecutive quarters of positive same-store sales growth, according to Lundquist, with six quarters of market share gains. A recent slew of store remodelings have been helping boost the category, while companywide same-store sales have been positive for eight-straight quarters.

The Good & Gather launch follows a period of heavy investing by Target in other parts of the store and in its own labels. The company will end the year with more than 25 new owned-and-exclusive brands, like A New Day for women’s clothes, Project 62 for furniture and Hearth & Hand with Magnolia for home goods. It started making the investments in 2017 as part of its bid to keep shoppers coming to Target for things they can’t find elsewhere except for Amazon. It also has helped pull Target out of a sales slump.

In 2018, Target’s sales grew to $75.36 billion from $71.88 billion in 2017. Sales had fallen more than 5% in 2016, to $69.45 billion from $73.79 billion in 2015. Analysts are calling for sales of $77.44 billion in fiscal 2019, according to FactSet.

Target shares have broadly outperformed the industry and are up more than 27% this year. The S&P 500 Retail ETF (XRT) is down nearly 6%.

“I think the reason they haven’t done as much in food to date … is food is much more competitive,” said Neil Saunders, managing director at GlobalData Retail. “Food is also much higher risk because the margins are lower. … I think the staples are what they are, and for the everyday things you need, Target does a reasonable job.”

As part of the Good & Gather launch, Target will also be phasing out two food brands, Archer Farms and Simply Balanced. It will also scale down the number of items it sells under Market Pantry, which makes basic goods like sandwich breads, cooking oils, sauces and canned vegetables. The addition of Good & Gather to Target stores also means it will slightly increase the amount of shelf space it devotes to private-label products versus national ones.

As a result, Target’s penetration of store-owned brands in the grocery category will climb. But Lundquist said national brands will still serve an “important role” in the space.

Target’s investment in a new private-label grocery brand could be coming at just the right time.

Private brands in grocery stores are showing more momentum than manufacturer brands, across all income levels of shoppers, according to a recent report from the Food Marketing Institute in partnership with IRI.

In 2018, sales of private-label brands at grocery stores, which would include places like Kroger and Publix, were $75 billion, up 1.5% from a year earlier. For online grocers, private brand sales surged an incredible 80.2% in 2018, the report said. At convenience stores, like 7-Eleven, they were up 12.5%.

At mass merchants, like Walmart and Target, private brand sales amounted to $5 billion and were up 7.4%, the report said. Private food brands overall in the U.S. brought in sales of $153 billion in 2018, up 5.5% from a year earlier.

“I think there is a much greater acceptance of private brands across the board than historically,” said Mark Baum, a senior vice president at FMI. One reason for this is “younger people don’t grow up with the same nostalgia as their parents did.” Secondly, “there hasn’t been the kind of innovation in national brands that has been getting consumers excited,” he said.

Walmart, the largest retailer in the world by sales, has used its private labels in the grocery aisles, like Great Value, to focus on low prices.

“What Target shouldn’t do is take on Walmart directly [in grocery],” Saunders said. “What Target should be about is great products … at reasonable prices. There is room for Target to nibble away at the market.”

Good & Gather will be Target’s new flagship brand but then will be broken down into different categories: kids, organic, seasonal and signature. The seasonal brand will include pumpkin-spice flavored snacks, for example, and the signature line will have more premium goods for more people with discerning tastes.

In working on this brand for the past few years, Target has also made sure it gets “taste” just right, Lundquist said. She said that when Target was polling consumers, taste was something they thought most about when navigating the grocery store. All Good & Gather products will be made without artificial flavors and sweeteners, synthetic colors and high-fructose corn syrup.

As it hits stores next month, the brand is also going to have prime spots in stores, with displays at the end of aisles. Its presence will be hard to miss.

For those who still doubt Target’s knack for grocery, the Good & Gather launch could be just what Target needs to call attention to its recent efforts.

Analyst Yarbrough said Target’s store remodelings include revamped grocery aisles, where fresh produce is displayed in sleek wooden bins. Grab-and-go food has a bigger presence. The lighting is brighter and the tiled flooring is a neutral hue, making the space more welcoming overall.

Target also offers same-day delivery of groceries via its Shipt subsidiary and has curbside pickup at more than 1,500 stores.

But Target knows there’s still more work to be done.

“We have to be [reliable], we have to be abundant and fresh, and we have to be relevant,” Lundquist said. “We’ve taken days out of [our] supply chain. We’re getting from field to shelf way faster. … Having an end-to-end team now we can really build on the momentum we’ve gained.”

Target is set to report quarterly earnings before the market opens on Wednesday.


Albertsons is testing a delivery subscription service

Albertsons is currently testing a delivery subscription service in about a dozen stores across various markets. The service, which does not yet have an official name, pricing plan or order minimum, began in March. “We are testing different price points,” a spokeswoman said. The orders are fulfilled by Albertsons’ systems and employees.

Speaking at the Digital Food & Beverage Conference this week in Austin, Texas, Kenji Gjovig, vice president of e-commerce marketing and merchandising at Albertsons, said the company plans to expand the service after seeing “off the charts” results in the Phoenix and Southern California markets.

Gjovig said Albertsons’ goal in offering subscription delivery is to secure customer loyalty and get them to order more of their online groceries through the company. “The objective of the program was to increase frequency without having a negative effect on profitability in the transaction,” he said during his presentation.

The program offers a monthly payment plan as well as an annual plan, and Gjovig said both options have exceeded expectations.”We’re seeing a dramatic increase in frequency — above where our forecast was, and an increase in profitability as well across the two cohorts in the annual and the monthly subscribers,” he noted.

Getting the buy-in from customers through subscription services can help ensure that they won’t go elsewhere for their online grocery shopping. But with so many different subscription services vying for consumer dollars — from Netflix to Amazon Prime, which claims more than 100 million members — the trick is convincing customers to pay up.

According to a survey of 2,500 Americans released last year by Waterstone Management Group, respondents spent more than $237 a month on subscription services — much higher than the roughly $80 they estimated they spent.

Will shoppers view online grocery subscriptions as a necessity or a nice-to-have? During a separate presentation at the Digital Food & Beverage Conference, SpartanNash’s director of e-commerce, Matt Van Gilder, said customers approach them differently from other services. “You’re already going to be getting an order every week,” Van Gilder said. “This subscription model isn’t necessarily adding new products into a customer’s life but a new way to get those products.”

SpartanNash currently offers a $49 unlimited grocery pickup subscription through its Fast Lane service, which is available at more than half its retail stores. Van Gilder noted that subscription shoppers are spending 30% more with the company than they did before they used the service.

Competing grocers and delivery services are sold on subscriptions. Walmart is testing a $98-a-year “unlimited” delivery plan in four cities. That’s the same price as a Shipt membership, while Instacart’s Express service dropped from $149 to $99 late last year. And then there’s Whole Foods, which offers free two-hour delivery and pickup to Amazon Prime members in a growing number of markets.

With more and more consumers adopting online grocery, retailers are jockeying to claim their loyalty. Look for more companies to turn to subscription services, and to potentially add perks to sweeten the deal.



Carrefour goes for fast home delivery with Glovo deal

Carrefour has teamed up with Spanish start-up Glovo to provide a fast home delivery service as the French supermarket group looks to deal with growing competition from the likes of Amazon as well as domestic rivals.

Other supermarkets around the world are forming deals with online partners such as Amazon and others to meet growing demand from customers for home delivery services. Carrefour’s French rival Casino already has a partnership with Amazon, while Marks & Spencer has a joint venture with online food retail pioneer Ocado.

Carrefour’s Glovo partnership will cover four countries – France, Spain, Italy and Argentina – and will start operating by early October at the latest. The service will aim to deliver 2,500 products to customers’ homes within 30 minutes.

“With this new partnership, Glovo and Carrefour will offer a 30-minute home delivery service that complements their existing e-commerce offers and allows them to address the needs of new customers,” said Carrefour director Amélie Oudéa-Castéra.

Glovo, which competes with platforms such as Uber Eats and Deliveroo, said in April that it had raised 150 million euros ($168 million) of new funding.

Glovo, founded in 2015, booked a 90 million euro-loss in 2018, according to data provided by Delivery Hero, one of its shareholders. Carrefour, Europe’s largest retailer, is in the midst of a five-year plan to boost sales and profits.

The plan includes 2.8 billion euros of investment in digital commerce and aims to increase online food sales to 5 billion euros by 2022. In 2018 alone, Carrefour’s online food sales grew by over 30% to 1.2 billion euros.



Tesco wants to open 750 stores in Thailand

Tesco is to open 750 convenience stores in Thailand over the next three years in its first major overseas expansion under chief executive Dave Lewis. Thailand is the grocery group’s biggest market outside the UK and its most profitable.

Lewis, 54, who was parachuted into the supermarket chain in 2014 after it ran adrift under previous management, believes that Thailand offers a huge opportunity because of its young, increasingly urban and affluent population. ‘The economics of the country are very attractive. There is a big emerging middle class” he said.

Tesco has been in Thailand since 1998. It employs 46,000 full-time staff there and operates under the Tesco Lotus brand. The group has more than 1,500 Express convenience stores and around 400 larger shops, including some hypermarkets. It also owns shopping malls and until recently was involved in the wholesale market.

Lewis’s move will create up to 10,000 new jobs in the country. He said he sees large scope for growth, as around half of the Thai food shopping market consists of traditional markets, street stalls and small family-owned shops. Profits in Asia, which also includes its Malaysian operation, were down 4.3 per cent last year, though Lewis attributes this to a restructuring in Thailand, including a withdrawal from the wholesale operations. He shut down a bulk selling business in 2017 that serviced independent merchants after concluding it was unlikely to become profitable. ‘We have been making changes over the past two years but now we have a model we are very pleased with,’ he said.

Tesco is likely to face stiff competition from Japanese-US business 7-Eleven, which has thousands of its convenience stores in Thailand, where the brand is run by locally listed company CP All.

In the past, Tesco has run into rough waters with some of its overseas forays. It pulled out of an ill-fated venture into the US through its Fresh & Easy chain on the West Coast in 2013. The failure to win over US shoppers cost it around £1.2billion.

Lord MacLaurin, a former chairman, recently attacked ex-chief executive Sir Terry Leahy, whose decision it was to go into the US market on the eve of the financial crisis, accusing him of having an ‘arrogant’ and ‘extravagant’ management style.

Lewis sees the Thai move as part of his strategy to move the company on after its recovery from the scandal that engulfed it under his predecessors. A £250million black hole in the accounts came to light shortly after his arrival and Tesco posted a record pre-tax loss of £6.4billion in 2015. Under his stewardship, the group has returned to profit, with a 28.8pc jump last year to £1.7billion.