THE FRIDAY 5: Boar’s Head Food Safety Woes; ALDI, H-E-B Keep Growing
Welcome to The Friday 5, Progressive Grocer’s weekly roundup of the top news and trends in the food retail industry. Each Friday, we’ll take a look at the stories that are most important to our readers and also keep tabs on the trends that are poised to impact grocers.
1. Boar’s Head Broke Food Safety Rules
The continued tale of the deadly listeria outbreak linked to a Boar's Head facility in Virginia was PG’s most-clicked story this week. According to documents obtained by CBS News, USDA officials found "heavy discolored meat build up" on a hydraulic pump, flies in pickle vats, a "steady line of ants" and "a presence of flying insects" in one of the rooms at the Jarratt, Va., plant, along with many other infractions.
A total of 69 instances of noncompliance with federal regulations were found by officials from January through August. Documents also detailed a "black mold like substance" at the plant, as well as instances of mildew, leaks and "green algal growth.”
After news broke of a deadly listeria outbreak in late July, Boar’s Head recalled all of its liverwurst products, and later found out from the USDA that its Strassburger Brand Liverwurst was linked to the national deadly Listeria monocytogenes outbreak. The death toll from the outbreak has reached nine people across 13 states, with 57 additional people hospitalized.
2. ALDI, H-E-B Prepare for Growth
ALDI revealed this week that it will hire more than 13,000 store and warehouse associates as it prepares for the upcoming holiday season and continues adding new stores across the United States. While the grocer grows its team of more than 49,000 employees, it's also raising its national average hourly pay.
Store and warehouse jobs will be $18 and $23 per hour, respectively, based on market and position. The massive hiring initiative supports ALDI's expansion plans revealed earlier in the year, which included its goal of opening 800 new stores across the United States in the next five years.
News also broke this week that Texas grocer H-E-B is accelerating its growth on the northern side of the state, acquiring property in the Fort Worth suburb of Irving, with plans to open its first H-E-B store there. The Irving H-E-B store will be built at Interstate 635 and Olympus Boulevard, and construction is expected to start later this year with an opening in 2026.
The store, which will service Irving, Coppell, Grapevine and West Dallas residents, is expected to create about 700 jobs.
3. Disappointing Financial Results for Dollar General, Dollar Tree
This week brought second quarter financial reporting from Dollar General and Dollar Tree. While Dollar General continued to make progress on its back-to-basics plan in Q2, the company was not satisfied with its overall financial results.
Same-store sales growth was strongest in June before turning negative in July, notably, the three softest comp sales weeks of the quarter were the last week of each of the calendar months.
“This pattern suggests that our customers are less able to stretch their budgets through the end of the month,” commented CEO and Director Todd J. Vasos. “With that in mind, as well as our continued softness in discretionary sales in our own customer data and survey work, we believe the softer-than-anticipated sales performance in Q2 is at least partially attributable to a core customer that is less confident of their financial position.”
As for Dollar Tree, sales for its Q2 also came in toward the low end of its outlook range. Consolidated net sales inched up 0.7% to $7.37 billion. Enterprise same-store net sales also rose 0.7%, driven by a 1.1% increase in traffic, offset by a 0.5% average ticket decline.
COO Mike Creedon explained that beginning this quarter, the company started to see inflation, interest rates, and other macro pressures have a more pronounced impact on the buying behavior of customers, thereby affecting Q2 comp performance.
Because of its unsatisfactory Q2 performance, Dollar Tree was forced to revise its full-year outlook. “We are taking a more conservative view toward comp sales in the back half of the year, particularly in the Dollar Tree segment, as macro factors continue to weigh on customer sentiment and adversely affect discretionary demand and buying behavior,” said CFO Jeff Davis.
4. Rite Aid Emerges From Chapter 11 as a Private Company
It’s been an up-and-down year for Rite Aid, which closed hundreds of stores nationwide after filing for bankruptcy protection in October 2023. This week, the drugstore chain announced that it has emerged from the Chapter 11 process as a private company and under a new leader.
Rite Aid eliminated approximately $2 billion of total debt and has received approximately $2.5 billion in exit financing to support the business going forward. Under this new organization, CFO Matt Schroeder has been elevated to the CEO position. Schroeder, who has worked in various roles at Rite Aid since joining the company in 2000, is taking the reins from Jeffrey S. Stein, who served as CEO and chief restructuring officer during the reorganization period.
“I am honored to lead Rite Aid on its journey as we continue serving our customers and communities,” said Schroeder. “Thanks to the dedication of the entire organization, we are beginning our next phase as a transformed company. I see Rite Aid’s remarkable potential, and I look forward to working with the team as we remain committed to our purpose of helping our customers achieve whole health for life.”
5. Amazon Gets Back to Fresh
Amazon has finally continued with expansion plans for its Amazon Fresh grocery format. The company confirmed it has opened four new Amazon Fresh locations – in Roseville, Calif., Tinley Park, Ill., Lodi, N.J. and Bensalem, Penn. With these stores, Amazon now operates 49 Amazon Fresh locations across California, Illinois, Maryland, New Jersey, New York, Pennsylvania, Washington and Virginia.
Other recent Amazon Fresh store openings include a location which launched in Eatontown, N.J., in June 2024. The Amazon Fresh format features a variety of high-tech omnichannel features designed to merge online grocery shopping with an elevated in-store experience, including fast grocery delivery and pickup options, as well as the Amazon Dash Cart smart shopping cart and Amazon One palm-based payment devices.
These openings come about seven months after Amazon closed a handful of Fresh stores, including one on Pike Street in Seattle’s Capitol Hill neighborhood.
