Indeed, for an industry that’s collectively watching its
topography change before its eyes, incumbent grocers
not only need to be on the forefront of this change, but
must also abandon prevailing assumptions or risk being
ill-equipped to compete in this increasingly competitive
Amazon’s acquisition of Whole Foods Market this past
summer has set off an unprecedented level of guesswork—and a basketful of buzz and pallets of potential—
in its wake. But the tale of its effect on the supermarket
industry is likely to be told more in supermarkets’ capital
budgets than on their register tapes, at least in the near
In the short term are a spate of predictions of the
demise of conventional grocery stores, which are greatly
exaggerated, says Judy Spires, CEO of Kings Food Markets and Balducci’s Food Lover’s Market.
In her recent keynote at the Private Label Manufacturers Association’s (PLMA’s) annual confab in Rosemont,
Ill., Spires said she believes groceries are not suited for
pure online commerce. “The future of retail and grocery
will still include a vibrant bricks-and-mortar sales channel,” she said.
However, in a direct nod to next generation cap-ex
spending, Spires said food retailers must be both “smart
and careful” about tailoring stores that are “the right size
in the right places. We all have to share in the responsi-
bility of getting our shoppers off their couches and into
On the other side of the turf is the German discounter
duo, Aldi and Lidl, both of which are “canaries in a coal
mine” heralding further fundamental shifts, according
to Mike Paglia, director of retail insights at Kantar Retail,
who also presented at PLMA’s event last month.
Much to their own peril, many food retailers continue
to dismiss the two discount chains’ impact. But Paglia
issued a stern warning that private-label heavy, small-format players have the potential to be even more disruptive in the grocery sector than Amazon.
“A lot of folks say, ‘I’m not going to lose sleep over
these guys,’” said Paglia, who instead urges retailers who
believe as such to make an immediate course correction
and instead “start losing a little sleep” because of his view
that Aldi and Lidl are doing business in a way that indi-
cates where food retailing in general is going. Further,
for the incisive players who successfully broaden their
appeal as Aldi and Lidl have, Paglia says they will be well
positioned to evolve as “multicapable retailers who can
convey value and relevance to multiple shopper groups
at the same time.”
On the pages that follow, Winsight Grocery Business puts
the perception of the aforementioned hot topics into per-
spective with a closer look at the tectonic shifts in play for
an industry in flux.
in which clickbait-friendly headlines
have been known to mislead and distort, the massive upheaval
in the United States grocery sector has triggered a similar set of
misperceptions about the realities of the bigger issues in play. To be
sure, the din of chatter around the fast-approaching $700 billion retail
food sector has triggered a repetitive series of conflicting conjectures
that has made it difficult for many grocers to decipher what is most
critical to adapt to in order to ensure their long-term relevancy and
survival—assuming they’re not all wiped out before Amazon takes
over, or dead from self-inflicted wounds stemming from a failure to
respond to a thousand paper cuts, courtesy of Aldi and Lidl.
In an era
the total U.S.
Aldi and Lidl
for by 2022,
with about $70
billion in sales.