Saturday, July 10, 2021

Will Albertsons be Able to Focus on Meals


At the intersection of food sales and retail brands selling food is a time starved consumer looking for solutions on how to put dinner on the table faster with less work and still have a fresh prepared meal.  At fist glance the DoorDash and Albertsons Cos., new partnership that offers on-demand grocery delivery from nearly 2,000 well-known Albertsons banner stores across the country including Safeway, Vons, Jewel-Osco, and more from the DoorDash marketplace app sounds like a good idea.

Not all good ideas are a clear path to success according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Consumer are dynamic not static.  They move forward with technology, faster than many brands.  Consumers options and varitety of things to do in their spare time has grown exponentially, putting demands on time they want to cook from scratch.  In fact:

1.       Our new 2021 Grocerant ScoreCards found 82.3% of consumers don’t know what’s for dinner at Noon, and 61.1 don’t know what’ s for dinner at 4PM %.

2.       83.1% all dinners have at least 1 grocerant niche Ready-2-Eat and Heat-N-Eat meal component and 68.4% have two meal components.

3.       When asked if they wanted to cook dinner from scratch or assemble dinner from fresh meal components 90.4 % of Gen Z chose assemble from Fresh Prepared Meal Components and Millennials 82.7% chose meal components.

4.       Seventy-three percent of retail prepared food purchases are taken to go

5.       Prepared food purchases are frequently a planned purchase among 59% of shoppers, while 41% of shoppers said they buy prepared foods on impulse. Dinner has the highest amount of prepared food buys with 79% of respondents making purchases for that meal, while lunch comes in at 77% and breakfast at 62%.

Today, the price, value, service equilibrium continues to evolve, consumers can now order groceries and essentials on-demand for delivery within an hour through DoorDash’s marketplace with no time slot, queues or minimum order size required. The team at Foodservice Solutions® does not think that is enough too drive top-line growth and bottom-line profits.

Now, Albertsons will offer more than 40,000 grocery items from stores for delivery via DoorDash, including fresh and prepared food, core grocery, floral and convenience items at select stores. We ask what role with fresh prepared meals and meal components play?  There are no slotting fees paid for fresh prepared meals and meal components.

So, consumers can shop on the DoorDash app to fulfill their grocery orders. In addition, in select markets, customers can order groceries through their local Albertsons Cos. store’s website for same-day delivery powered through DoorDash Drive, DoorDash’s white-label fulfillment platform that powers direct delivery for any business. What role will be slotting fees play in online delivery?

Remember what Scott Moses  Managing Director and Head of Grocery, Pharmacy & Restaurants Investment Banking at PJ Solomon, wrote; “There are now 26,000 traditional supermarkets in the United States, roughly 900 fewer than 10 years ago. Regional supermarkets have been slowly eclipsed by the shadow of various extremely large, well-capitalized (investment-grade), non-union and fast-growing alternative grocers.”

Moses continued saying “alternative grocers now comprise meaningfully more grocery sales than traditional supermarkets and are the primary grocery shopping outlet for 61% of customers, up from 19% roughly 20 years ago. The average consumer now shops for groceries every week at five banners, in four different grocery channels (e.g., supermarkets, supercenters, drugstores, discount/dollar grocers, club stores and various specialty grocers), according to FMI.

That said, food customer migration continues from legacy grocery stores to restaurants, grocerants, c-stores, dollar stores and furniture stores.  Unless legacy grocery stores stop focusing on business models of yesterday and begin to focus on grocerant niche fresh prepared Ready-2-Eat and Heat-N-Eat food their future will not look very bright according to our Grocerant Guru®.

Chris Rupp, chief customer and digital officer for Albertsons, stated, “We are committed to expanding our delivery experience in order to meet our customers’ needs whenever, wherever and however they want,”  “Our partnership with DoorDash is the next step in our digital transformation to help make our customers’ lives easier and help answer the perennial question, ‘What’s for dinner tonight?’”

Yes, that’s what he said.  Today, there are 29 restaurants for every grocery store selling meals and meal components.  How does he square that? Albertsons stores still look more like 1980 that 2023?  We ask, are grocery stores looking ahead or being forced forward?  The team at Foodservice Solutions® wonders just what legacy grocery store will be the next A&P.  Yes, A&P once the largest grocer in the US, unable to evolve is no more.  What’s worst the A&P brand experienced a long painful demise.

Ok, Albertsons’ partnerships with DoorDash Drive, is launching a custom loyalty program, expanding delivery hours, and offering a unique selection including specialty items, prepared meals, meal kits and new concepts but will they have the staying power to see them through the process to drive customer adoption?  Will they be focused on the consumer or a business model of yesterday filled with slotting fees?

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter


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