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.
As grocers face rising competition from mass retailers, discounters and club retailers, one in particular is a standout rival: Costco.
A recent article in Fortune provided a deep dive into some of the operational details behind the club retailer’s success.
Many people know about Costco’s curated assortment and treasure-hunt appeal. By placing large orders with a small number of suppliers, those suppliers make their goods “faster and cheaper” for Costco, Fortune noted. “Such orders encourage suppliers to give Costco priority, which comes in handy with seasonal goods,” the article said.
Faced with fewer varieties, customers don’t have to wade through dozens of brands to decide which ketchup they want, like at a traditional grocery store. And larger pack sizes mean customers don’t have to shop as frequently, Fortune noted.
But being pickier about which products it sells and how many varieties to offer means tests and pilots are paramount for the club retailer before national rollouts. “You won’t see a 1.5-pound brick of Parmigiano-Reggiano go national until it’s gone over well in, say, Pittsburgh,” Fortune noted.
Costco’s private label Kirkland Signature and a selection of treasure-hunt finds like expensive moisturizer and unique snack flavors keep shoppers coming back, Fortune said. Plus, there’s Costco’s beloved $1.50 hot-dog-and-beverage combo, which hasn’t budged in price since 1985.
Monitoring how many customers are entering the store allows Costco to deploy workers as needed to the checkout areas to help keep the lines moving — and the retailer’s wages and benefits keep turnover low, Fortune said.
Costco’s model is clearly resonating with price-conscious consumers. Costco beat Wall Street estimates for its third-quarter results with higher-than-expected results for both its net sales of more than $57 billion, up 9% year over year, and adjusted earnings of $3.78.
While Target and Walmart are among the bevy of retailers slashing prices left and right this summer, CEO Ron Vachris reportedly said Costco doesn’t feel pressure to do the same.
In case you missed it
Ciao to a Pub Sub summer!
Publix is gearing up for an Italian summer by re-introducing Tutto Pugliese bread to its customizable Pub Sub options, Food and Wine reported Thursday. The bread rolled out last year for a limited run and was a hit, the outlet reported. Tutto Pugliese comes in several varieties, including onion Asiago cheese, with more possibly on the way.
The Florida grocer also announced Wednesday that a lineup of summer-themed, limited-time-only products are now available, including three new teas and lemonades and cookout-ready hot and cold meals.
Prime access to Grubhub+
Amazon is looking to build out its Prime membership by expanding its partnership with Grubhub. Amazon customers can now order Grubhub restaurant delivery on Amazon’s site and shopping app, and the retailer’s Prime members can receive a fullGrubhub+ membership rather than the previous offer of a one-year trial, sister publication Restaurant Dive reported.
Third Meijer Grocery to open soon
Meijer announced Tuesday that it plans to open a 90,000-square-foot Meijer Grocery store on July 11 in Noblesville, Indiana. The state is currently home to 42 Meijer supercenters, and the upcoming store will include a full-service deli, bakery, pharmacy and floral section as well as offer mPerks, Shop and Scan, home delivery and pickup.
Number of the week: 21.4%
That is the percentage of U.S. grocery dollar share Walmart claimed from April 2023 to the end of March 2024, according to a recent Numerator report. Kroger’s share was 8.8%, while Costco had 8.2% and Albertsons trailed behind with 5.4%. Walmart’s supercenter chain, Sam’s Club, came in fifth, representing 4.3% of U.S. grocery market share.
What’s ahead
UNFI earnings
United Natural Foods, Inc. plans to release its Q3 financial results Wednesday morning.
Latest jobs report
The U.S. Bureau of Labor Statistics is set to release its latest employment report next Friday, giving new insight into the grocery industry workforce during the month of May.
Impulse find
Washington, D.C., wants answers about Foxtrot
Shoppers in the nation’s capital are still reeling over the loss of Foxtrot, and some are scouring for answers as to what’s happening to the shuttered storefronts.
The retailer recently auctioned off some of its assets, but at least two of its stores still has merchandise on the shelf. A popular local Instagram page, Washingtonian Problems, posted Thursday the front doors of the now-shuttered Foxtrot in the Adams Morgan neighborhood. Someone wrote in marker on the location’s front door, “Why is all this food sitting here” — and you can see beyond the glass door a full shelf of non-perishable food products.
When Grocery Dive reporter Catherine Douglas Moran walked by another Foxtrot in the city Thursday, she saw a large selection of wine still sitting in the store.
