This week in grocery, BJ’s automates, Sprouts shrinks down and supermarkets add restaurant meals.
Massachusetts-based membership warehouse retailer BJ’s Wholesale Club, which has more than 230 stores across 18 states, shared on a call with analysts Thursday (March 9) discussing its fourth quarter 2022 financial results, that it is turning to automation to boost efficiency and improve shelf-stocking.
“We’ll be rolling out robotics across the entire footprint, and these are robots that will help us eliminate manual tasks — think of shelf scanning to go checking price accuracy. They will also help identify out of stocks, [noticing] when something’s not available on the shelf,” said Jeff Desroches, executive vice president, chief operations officer.
The news comes as economic challenges call on grocers to work harder to secure their customers’ loyalty, and product availability can be a key decider for shoppers.
Research from PYMNTS’ “Decoding Customer Affinity” study, created in collaboration with Toshiba Global Commerce Solutions, which drew from a survey of more than 2,000 U.S. consumers, noted that 51% of shoppers said ensuring that the grocery products they want are in stock and available for purchase is key to their continued patronage of a given merchant. Plus, 6% of shoppers listed this factor as the single most influential driver of merchant selection for them.
As inflation puts pressure on grocers, prompting their customers to cut back on unnecessary purchases and trade down to lower-priced merchants, specialty retailers offering premium items are challenged to make some difficult decisions.
Sprouts Farmers Market, for its part, the Phoenix, Arizona-based specialty grocer with 380 stores in 23 states, announced in its fourth quarter results that it is closing 11 locations that are an average of 30% larger than new locations and that are “underperforming financially,” per CFO Chip Molloy. Conversely, the company will be opening more smaller-format locations.
“In 2023, we plan to open at least 30 new stores, all of which are our current prototype,” Molloy told analysts on a call. “Back in early 2020, we considered closing some underperforming locations as we shifted our store growth strategy to a smaller, more productive prototype. We consciously decided not to close those stores as the pandemic struck, so our communities would continue to have access to fresh healthy groceries. We recently revisited that decision.”
The move to focus on smaller-format stores comes as consumers cut many extraneous purchases. The study “Consumer Inflation Sentiment: Perception Is Reality,” for which PYMNTS surveyed more than 2,100 consumers in December, revealed that 59% of consumers have reduced the quantities of items they purchase at the grocery store in response to rising prices.
As consumers’ patience for cooking from scratch wanes, grocers are looking for ways to offer easier meal solutions. Against this backdrop, fast-casual chain Wow Bao, which has hundreds of virtual locations across the United States and a handful of brick-and-mortar spots, recently announced in an emailed press release that it has partnered with sushi distributor Hissho Sushi to reach 1,000 grocery stores across 30 or more states.
“With the expansion of Wow Bao’s presence in grocery stores nationwide, we are on track to be everywhere people shop for easy, healthy meals,” Geoff Alexander, CEO of Wow Bao, said in a statement.
According to the fast-casual brand’s website, grocers selling these heat-and-eat meals include Giant, Jewel-Osco, Meijer, Target and others.
The news comes as consumers increasingly seek out prepared meals at the grocery store. Data from “Digital Economy Payments: Consumers Buy Into Food Bargains,” for which PYMNTS surveyed nearly 2,700 U.S. consumers, found that 37% of grocery shoppers bought prepared food on their most recent trip, up 7 points from the 30% of consumers who had done so back in November 2021.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More