Ahold Delhaize, the Netherlands-based global grocery giant with over 7,000 stores around the world, just made a major move in its effort to make 85% of its East Coast grocery retail supply chain self-distributed by the end of 2022. The company’s United States family of supply chain companies, ADUSA Supply Chain, announced Thursday (Sept. 23) that it has opened its 1 million-square-foot distribution center in Manchester, Connecticut.
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“The opening of the Manchester facility is an important milestone in the transformation of the supply chain serving Ahold Delhaize USA’s local brands,” Chris Lewis, president of ADUSA Supply Chain, said in a statement. “With the addition of Manchester, we have added more than 2 million square feet of distribution capacity to our network in less than two months.”
Lewis added that the facility is “well equipped with technology solutions that will boost efficiency,” leading to quicker deliveries.
The facility will handle an average of about 1.7 million cases of shelf-stable groceries each week, supplying over 450 Stop & Shop stores and e-commerce centers. It is the first facility opened under the ADUSA Supply Chain brand.
On a call with analysts in August, Ahold Delhaize CEO Frans Muller shared that this move to self-distribute is serving the company’s United States business well amid widespread supply chain disruptions.
“On the US side, we are in the fortunate position that we have a lot of [the] supply chain self-managed,” he said. “That is absolutely strategically in the right direction. And the more we control ourselves, we can more control our destiny and we’re less dependent on third parties.”
Giant Incentivizes Online Ordering with Fee Cuts
In related news, in a move to draw shoppers into its online grocery channels, Ahold Delhaize-owned, Maryland-based grocery chain Giant, which operates more than 160 stores in the Delaware-Maryland-Virginia area, announced Wednesday (Sept. 22) that it is now offering free deliveries three days a week and reduced fee deliveries two days. Additionally, the chain is lowering its order minimum for delivery and eliminating the minimum for pickup.
PYMNTS data from the study What Consumers Expect From Their Grocery Shopping Experiences, a collaboration with ACI Worldwide, finds that, while 94% of consumers still shop in stores, only 34% buy online, and only 23% of consumers buy groceries online for delivery.
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This seems like a fairly modest fraction, but it is a dramatic increase from pre-pandemic. A 2019 NPD study found that 16% of the 20% of consumers who shopped online for groceries, meaning 3% of all consumers, reported that they order for delivery.
Walmart ‘Built for Better’ to Draw Impact- and Health-Minded Shoppers
Walmart, the top grocer in the United States, announced Tuesday (Sept. 21) the launch of a new program, “Built for Better,” designed to reach consumers whose purchasing decisions are swayed by brands’ perceived environmental and nutritional impact.
The program is divided into two categories: products with positive health benefits and those that are environmentally friendly. For foods, products will appear with the “Built for Better—For You” icon when they meet certain nutrition standards. Products across categories will appear with the “Built for Better—For the Planet” when they meet certain environmental standards.
“We’re just getting started. We know ‘live better’ extends beyond saving money, healthy living and sustainability,” Jane Ewing, Walmart’s senior vice president of sustainability, wrote. “With Built for Better, we’ve created a framework that can grow over time. As the needs of our communities and customers continue to change, we’ll change right alongside them.”
Foods’ health qualities are a huge impact on consumers’ purchasing decisions. For instance, an International Food Information Council (IFIC) study earlier this year found that more than half of all millennials had kept to a specific diet, like clean eating or intermittent fasting, at some point in the previous year, as had 38% of Generation X consumers.
Additionally, eco-centric initiatives such as this can be key to retailers’ ability to hold on to sustainability-minded shoppers. A GreenPrint study published in March found that 64% of U.S. consumers would be willing to spend more for sustainable products, and 78% would be more likely to purchase a product if its eco-friendliness was clearly labeled. Additionally, 77% of all American consumers reported that they were “concerned about the environmental impact of products they buy.”
Schnucks Woos Back Online Grocery Shoppers with Local Produce
Schnucks, a Midwestern grocery chain with 111 locations, is going all in on local produce. In partnership with mobile marketing app and logistics platform Foodshed.io, which helps businesses discover local food producers, the grocer is now offering the greatest number of fresh produce offerings since its founding.
“Buying from local farms helps us support our local neighbors while providing a higher quality product for our customers,” Schnucks Vice president of Produce and Floral Mike Tipton said in a statement. “By reducing the time it takes from the farm to our stores, we are able to get the freshest produce.”
With online grocery on the rise, fresh produce can be a huge differentiator for grocers whose strength is brick-and-mortar. PYMNTS’ November 2020 Omnichannel Grocery Report, an ACI Worldwide collaboration, found that the share of consumers purchasing fresh fruits and vegetables online was about half that of those purchasing packaged food products online — 17% versus 32%. In other words, the vast majority (83%) of shoppers prefer to buy their fresh fruits and vegetables in stores.
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