Grocery Tracker: CVS Plans National Health Kick

Kicking off this week’s grocery tracker, Whole Foods Market (WFM) shares hit their highest level seen since the summer of 2015 as activist investor Jana Partners puts the squeeze on innovation and pressures the organic grocer towards a possible sale. Given the boost WFM has gotten since the news broke, it appears shareholders share Jana’s sentiment.

WFM looked to close out the third week of April trading on a high note, worth $35.83 at the time of writing — up 0.93 percent from Thursday’s close with a market cap of just over $11.6 billion.

Kroger (KR) shares also looked to finish up for the week, though only marginally so. Recovery has been slow for the national grocer since prices fell in February. Mid-day Friday, KR shares were trading at $30.06, up 1.18 percent from Thursday’s close despite starting Friday morning on a down note.

Meanwhile, international retail food group Ahold Delhaize (AD) saw shares fall some more, not benefiting from the same springtime boost grocery and other stocks have seen. At the time of writing, AD closed out the week trading at €18.58, down 1.04 percent from Thursday and down a full 5.4 percent for the year.

Median forecasts still put AD on the up and up in the next 12 months, though when those gains will show themselves is still up in the air.

Costco (COST) also found itself on the rise this past week, slowly gaining traction to bring its numbers back to its all-time highs near 180 back at the end of February. During mid-morning trading on Friday, COST was up 0.68 percent from Thursday’s close, hitting $171.28 just before lunch.

While some forecasts peg COST pushing $200 in the next twelve months, the average sentiment pegs shares will be in the mid-180s this time next year.

CVS is looking to mix things up a bit image- and inventory-wise this and next year. The national pharmacy and retailer recently announced it aims to grow its wellness cred in an effort to position itself as a health retailer.

The national drugstore chain will reboot the layout of more of its physical stores to promote new lines of health and wellness products to do its new(ish) corporate name, CVS Health, proud.

The new store design features a display, called the Discovery Zone, which features a broader assortment of healthy foods and wellness products along with beauty selections.

As of now, some 800 of the company’s 8,000 locations already feature the new design. CVS will roll out major changes to some 70 new and existing stores in 2017, with plans to expand to several hundred more in 2018.

But the health play isn’t just cosmetic.

CVS said that healthy options will make up some 50 percent of all food in the store, including 27 new items under the company’s private-label brand Gold Emblem Abound. Further, the company plans to remove chemicals that consumers find problematic — namely parabens, phthalates and formaldehyde donors — from its store brand product lines by 2019.

And of course, in keeping with consumer-driven clean label pushes, nutritional and dietary information and information on GMOs will get visible labels on store shelves.

CVS’ strategy is also to boost the health of its sales and foot traffic. The company still hasn’t fully recovered from the healthy but costly cut of tobacco sales in 2014. So it’s doubling down on its health kick to bring in health-conscious foot traffic.

Upon the news, CVS shares got a 2 percent boost during Thursday (April 20) trading.

“Pharmacy is the heart of our business, and our focus on providing care to patients and customers defines everything we do in our stores,” said Helena Foulkes, president of CVS Pharmacy and executive vice president, CVS Health. “Our new retail offerings leverage our deep expertise in health to enhance our customers’ shopping experience.”

CVS also noted upcoming digital developments for CVS Pay and CVS Curbside — its online order, in-store pickup program — part of a broader retail reinvention push.