The Friday Checkout is a weekly column providing more insight on the news, rounding up the announcements you may have missed and sharing what’s to come.
Online grocery sales have risen and fallen like a rollercoaster over the past decade or so, and nowadays retailers approach the channel as part of a holistic selling strategy aimed at boosting customer loyalty. As omnichannel retailing becomes increasingly important, so too has an age-old question that has long vexed the industry: How do you make e-commerce profitable?
Some of the biggest names in grocery retailing are addressing this question. Earlier this year, Walmart announced it had crossed this threshold as it continues to press its advantages in scale, innovation and automation. Kroger no doubt hoped to achieve the same milestone by now, but its moonshot delivery program with Ocado hasn’t gone according to plan. Still, it has to figure out how to make a profit in digital, interim CEO Ron Sargent said during the grocer’s most recent earnings call.
This week, Ahold Delhaize announced it has turned the corner on digital profitability. During an earnings call Wednesday, CFO Jolanda Poots-Bijl affirmed that this includes the company’s U.S. business, which encompasses five East Coast chains operating more than 2,000 stores.
CEO Frans Muller credited several factors as key to achieving e-commerce profitability on a fully allocated basis, including increasing its focus on asset-light fulfillment models like pickup, boosting its fulfillment capacity and automating key operations. Rather than rely on costly fulfillment centers, Ahold Delhaize relies on its stores to fulfill orders.
“We sweat our store assets,” Muller said.
Retail media was another key factor for Ahold Delhaize, and it’s easy to see this as a cheat code for online profitability because it has such high margins and doesn’t have anything to do with the hard work of fulfilling orders. But Muller said retail media is not the main driver of the company’s digital profitability.
As the industry’s largest players unlock online profits, smaller grocers, which don’t have the same innovation budgets and economies of scale, will likely continue to struggle with the high cost of digital. Companies can glorify omnichannel all they want, but at the end of the day, filling online orders still means paying to do the work an in-store customer does for free.
In case you missed it
Is Price Chopper’s parent company up for sale?
Northeast Grocery, Inc., the parent company of Price Chopper and Tops Friendly Markets, is exploring a sale, Reuters reported Monday, citing three anonymous sources. The news outlet said the grocery company is working with investment bank UBS.
After the Reuters report, Northeast Grocery executives told Times Union that the company has been working with UBS for three years to tap into its full growth potential, and not just look for potential buyers. Time will only tell if that involves a sale or not.
Save A Lot ramps up its private label
The discount grocer has launched 55 new store brand items over the past 12 months, the company noted in an announcement earlier this week. The additions include Mantia’s Pizza Sauce, Kiggins Crunchy Peanut Butter Granola Bars and 12-packs of Boardwalk sodas. Save A Lot has also launched pet food items under its Oliver & Scout product line.
Food traceability compliance could get pushed back
Under a newly proposed rule by the U.S. Food and Drug Administration, companies would have until July 2028 to be compliant with the Food Traceability Rule — instead of January 2026. The public comment for the proposed rule ends Sept. 8.
FMI – The Food Industry Association praised the proposed extension but encouraged the FDA to adopt additional changes to the rule in order to “ensure efficient implementation.”
Impulse find
Albertsons takes the cake
The cherry on top of any celebration is cake (or cupcakes), and Albertsons is going above and beyond with its sweet treats.
In a recent blog post, the grocer flexed some pretty impressive custom cakes, ranging from character-themed cakes to creative pull-apart cupcake cakes to one that resembles a giant burger.
Albertsons lets its shoppers fully customize their cakes from the flavor down to the filling, icing and size. The grocer’s app even includes a gift-giving feature that allows users to ship a custom cake right to a friend or family member’s front door.
These impressive desserts redefine what a grocery store cake can be and are meant to serve as the centerpiece at any event.
Watch your back Buddy Valastro, there’s a new Cake Boss in the bakery.
