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.
Eight months after undergoing a digital systems transition, Grocery Outlet is still reeling financially from issues that arose from the tech switch.
“We are all frustrated by the size and duration of this disruption,” Grocery Outlet President and CEO RJ Sheedy told investors Tuesday. “It has been costly and our recent execution is well below our expectations. But this disruption is also temporary and we are on the right path forward.”
Rewind to August: Sheedy had told investors that the system changes would give the company easier access to information, better decision-making around inventory and managing assortment, and tools for its independent operators to run stores more efficiently.
So far, the opposite has happened, with the discounter’s interim CFO and senior vice president of accounting Lindsay Gray telling investors Tuesday that financial forecasting has been “difficult” for the company due to the tech transition and compounding issues with data integration woes.
What Grocery Outlet is currently facing is similar to problems that have beset United Natural Foods, Inc. (UNFI), which disclosed last year that it did not have a clear sense of how inflation had affected its operations and had been unable to accurately forecast its profitability as a result. UNFI’s CEO blamed the problems on “legacy issues with digital infrastructure.”
These instances are a cautionary tale for grocers as they embark on digital transformations. While grocers can — and should — experiment with technology to see if it helps solve pain points and streamline operations, they also need to be mindful of the potential financial ramifications if their technology implementations go awry and remain vigilant as changes are made
In case you missed it
Instacart, NBCUniversal announce retail media partnership
The grocery technology company announced Monday that it is working with the broadcaster to allow CPGs to target advertisements at viewers of streaming content. Advertisers will be able to tap the arrangement to reach in-market consumers and access data to help them gauge the effectiveness of their ad campaigns.
Instacart believes advertisers will want to use its platform to connect with consumers who want to get products delivered within an hour, CEO Fidji Simo said Wednesday during the company’s first-quarter earnings call.
Daily Harvest debuts at Target
The frozen food supplier said Monday that the retailer has started selling some of its sustainably produced products at selected Target stores on the East and West coasts. The offerings include smoothies made from fruits and vegetables, harvest bowls with black beans and cheese, and blueberry- and banana-flavored ice pops.
Daily Harvest, which started as a direct-to-consumer company, has also struck supply deals with Kroger, Costco and Wegmans.
Grocers roll out new reusable bags
Giant Eagle will start offering reusable fabric grocery bags as an alternative to paper bags, Cleveland.com reported on Monday. The chain, which is not charging shoppers for the washable bags, opted to make them available in response to requests from customers looking for stronger sacks to carry heavy items, according to the news outlet. The bags are now available at some Pennsylvania stores and will arrive in Ohio during the coming weeks.
Giant Food, meanwhile, announced Thursday that it has started selling reusable bags adorned with images created by four artists from the grocer’s service area across Maryland, Virginia, Delaware and Washington, D.C. The bags will be available throughout May for $2.75 each, and the retailer plans to donate a portion of that price to a local nonprofit organization chosen by each artist.
Number of the week: $45 million
That is how much Kroger plans to spend on store upgrades for 15 locations across Ohio and Indiana this year.
What’s ahead
Inflation figures due
The U.S. Bureau of Labor Statistics is scheduled to release its Consumer Price Index data for April on Wednesday.
Latest retail sales report
The U.S. Census Bureau is set to release its latest round of monthly sales figures on Wednesday.
Walmart earnings
The retailer announced it will host its first-quarter earnings results for fiscal year 2025 on Thursday.
Impulse find
Holy guacamole!
El Rio Grande Latin Market broke a Guinness world record this month for the largest fruit display to ever be created. The record to beat was a 77,365 pound display, and the grocer’s Dallas location managed to crush the record using nothing but avocados.
Their display came in at a whopping 86,754 pounds, according to a Guiness spokesperson who officially announced El Rio Grande Latin Market’s win. The Latin market used 260,292 avocados in its display, according to an Instagram post from the grocer, and the display took seven hours of its team members’ “hard work, dedication, and a whole lot of avocado love.”
