Thursday, February 20, 2020

Buffett can’t save Kroger and Walmart may not win the Middle

Success does leave clues.  However just because Warren Buffett invested in Kroger does not mean Kroger will thrive or has a plan to beat Walmart for the middle of the grocery sector. Don’t forget that Buffett investment in Kraft Heinz did not go so well.  Just look at the at Walmart’s most recent earnings report where they failed to meet expectations after repositioning to the middle of the grocery sector. 
According to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® Kraft Heinz provides a view on just how difficult it is to reposition a brand.  Aldi, Lidl, and WinCo are all growing garnering share from Walmart, and Kroger. Aldi, and Lidl each offer a greater shopping destination fill with discovery for less driven in large part to private label products for less. 
Facts mater some more than others in the food space.  The number one driver of change within the grocery sector is the U.S. Household size.  Yes, the demographics do drive change, in fact 62.88% of U.S. households comprised of one or two people. With an ageing population there are few households that want to buy 10 porkchops, two stewing hens, or 100 cans of different soups?

Winning in the middle is hard.  There will not be two winners in the middle of the grocery sector.  So, I guess you will have to pick Walmart or Kroger.  For growth the WinCo, Aldi, and Lidl look to continue drive change as the garner incremental customers, build new stores, and innovate fresh foods for smaller sized households. So, who will win the middle of the grocery sector? Or should the question be how many more traditional grocery stores are simply going to fade away.
Invite Foodservice Solutions® to complete a Grocerant Program Assessment, Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991  of Tacoma, WA has been the global leader in the Grocerant niche. Contact: or 253-759-7869

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