Published on: May 18, 2022
Got the following email from MNB reader Dick Spezzano about a new Amazon Fresh store in La Verne, California:
The store has been open three weeks and I was there on Thursday at 1:30 in the afternoon, the cantaloupe was the lead item in produce at $2.29 each, and there was none. They had a barbecue chicken, every day low price, at $4.97 and there was none. I tried the pizza by the slice it was terrible. It’s a very flat look, in those items that were in stock was very thin, 2 to 3 packages deep in the center store. There were 11 customers shopping, I check stand open, 2 customers at self checkout, and 6 Amazon shoppers for pick up or delivery.
All of which continues to create at least the impression that a) many Amazon Fresh stores are being operated as if they are dark stores that happen to allow customers in, and b) if they really want to make the format work, they need a food retail heavyweight with creativity and discipline who can really make them sing.
If they're interested, I have some names.
Responding to yesterday's FaceTime piece, and accompanying pictures, about a supposedly redesigned Walmart Supercenter in Forney, Texas, MNB reader Gregory Gheen wrote:
I don't know if your pictures were intentional but there sure was a lot of out of stocks in your pictures.
Think of it as being the equivalent of a thousand words.
From another reader:
This may be a high volume store, but the produce department looks like an afterthought, almost like a larger Aldi's the way the produce is displayed. Nothing like what I'm sure HEB will deliver…
Agreed. if Walmart thinks this is the format that will defend its turf from H-E-B, they may want to rethink the strategy.
That said, another MNB reader offered some words of caution:
I know it’s not your cup of tea, but, in these times, price, price, price! Thanks for sharing your trip. My daughter’s family lives in Houston, and the WalMart stores consistently beat HEB on almost anything in regards to price. When you have 3 teenage kids, it’s price, price, price.
Which is why I was careful to make the point that the Walmart clearly is doing a lot of business. I just think that if this redesigned store is any indication, they still have not figured out the fresh foods business. I'd give it a C+ at best … but to be fair, Walmart may have decided that a C+ is all it needs in fresh foods to be successful.
But you make a good point. Thanks for challenging my biases.
On another subject, from another MNB reader:
In response to your article about retailer competition for ad dollars, the chains and wholesalers who are my customers offer robust menus of digital and shopper marketing programs to entice brand marketing dollars. This spend is expected to be incremental to trade spend. The programs look great, in theory, and show off nice bells and whistles. In my opinion, though, the commitment to these programs from brand marketers is more about leveraging the partnership with desirable retailers, and less about seeing directly attributed results from specific programs.
MNB reader Matt Nitzberg also weighed in with a somewhat different perspective:
Important and timely topic, and it parallels data commercialization and other efforts motivated by blended (and often blurred) objectives of collaboration, growth, margin enhancement, and improving customers’ experiences.
From 30+ years at the intersection of brands and retailers, I can confirm that nearly all retailer commercialization programs are initially greeted by CPG‘s as unwanted and uncomfortable “have to’s.“ Basic questions include “how are we going to find the money,” and “are we going to get anything in return?“
A few, marked by retailer transparency, accountability, measurable results, and improving ROI, make it to the “want to“ level. At the moment, many retailers are more focused on margin enhancement than these other attributes, particularly when that’s the mandate from the C-suite.
Many CPGs aren’t in strong bargaining positions at the moment, partly due to unaligned cross-retailer measurement (which you mention in your assessment), and partly from being on their back feet around supply and price increases.
I expect that, within 3-6 months, leading CPGs will determine how to calibrate program measurement across multiple retailers. This will strengthen arguments for reducing participation in underperforming programs that aren’t making meaningful progress.
Beyond that, as supply and inflationary concerns begin to recede, there will be more challenging (and important) executive-level discussions regarding cost-to-serve, mutual growth, ROI, transparency, and what it means to collaborate.
Both CPG‘s and retailers should be getting ready for those strategic conversations now.
Winners among both groups will (1) keep the customer (shopper) at the center, (2) be driven by the right data and strategic analyses, (3) collaborate in new areas and new ways, (4) relentlessly achieve continual improvement, and (5) drive out non-value added costs.
I said yesterday that I'm not going to be posting political diatribes that blame one side or the other for the conditions that lead to things like the mass shooting at the Tops store in Buffalo. I'm going to make this exception, though, for a pointed comment from an MNB reader that, in my view, blames the whole damned lot of them:
My view is that if 20 children and 6 educators can get mowed down in Newtown with no changes taking place we will never see change.
American exceptionalism, I think not.