THE FRIDAY 5: Kroger Trial Heats Up; Ahold Delhaize Plots U.S. Future

1. Kroger-Albertsons Trial Heats Up

Courtroom developments in the trial aimed at blocking the proposed $24.6 billion merger between Kroger and Albertsons were top of mind this week, garnering the most story clicks. The latest testimonies focused on competition, the divestiture package and labor. 

Defending the deal against the lawsuit brought by the Federal Trade Commission (FTC), Kroger and Albertsons contend that the FTC’s arguments are flawed and the agency is limiting its perception of grocery competition to “traditional supermarkets.” However, the grocery landscape has expanded to include club stores, big box retailers, hard discounters and competitors like Amazon. 

Meanwhile, to allay concerns about competition, Albertsons’ COO Susan Morris recently took the stand to discuss the divestiture package and efficiencies; she has been tapped to lead C&S’ new retail business. “I don’t want to run another mini-Kroger or a mini-Albertsons. This is a chance to run something distinct,” she declared. Closing arguments are set for Sept. 17.

2. Ahold Delhaize’s Growth Strategies Explained 

Another future-focused story of interest to readers was an inside look at Ahold Delhaize’s Growing Together strategy. That plan, shared in May at the company’s 2024 Strategy Day in the Netherlands, charts key growth and investment plans and ambitions toward 2028. 

Progressive Grocer was on site for the event and recapped the six strategic priorities, including a thriving workplace; healthy communities and planet; vibrant customer experiences; trusted product, and the drive for customer innovation. While the company executes growth plans, it is also zeroing in on efficiencies, a move that includes the closing of at least 32 underperforming Stop & Shop stores across the Northeast.

Ahold Delhaize’s roadmap for success among its U.S. banners is also based on the strength of its people and its brands’ rich local heritages. “Each brand now has a seamless integrated shopping experience that builds trust and loyalty across all of our channels. I personally believe this is where the magic begins. This is the power of food retailing as we move forward and into the future, and our brands are more than places to shop,” asserted Ahold Delhaize USA CEO JJ Fleeman. He also shared that the company intends to increase brand strength and density over the next four years through remodels, e-commerce activities and retail media, among other efforts. 

3. Bankruptcy for Big Lots

It was big news for closeout retailer Big Lots Inc. this week, which initiated voluntary Chapter 11 bankruptcy proceedings. The struggling discounter also entered into a sale agreement with an affiliate of investment firm Nexus Capital Management LP, under which Nexus has agreed to acquire substantially all of the company’s assets and ongoing business operations.  

As part of the court-supervised sale process, Big Lots will continue to review its operations and identify store closings beyond the previously announced 300 stores slated to cease operations. “Though the majority of our store locations are profitable, we intend to move forward with a more focused footprint to ensure that we operate efficiently and are best positioned to serve our customers,” said Big Lots President and CEO Bruce Thorn. “To accomplish this, we intend to use the tool afforded by this process to continue optimizing our store fleet in an orderly manner.”

4. Amazon Doubles Down on Physical Grocery

This was also momentous week for Amazon’s brick-and-mortar business. The retail behemoth launched a new Amazon Saver private label line that will be available online and at its Amazon Fresh stores. The “no frills” collection includes grocery staples such as crackers, cookies, canned fruits and condiments, and most items are priced under $5. 

That announcement was accompanied by news that Amazon is offering discounted prices on more than 3,000 grocery products to Prime Members, a significant increase from the hundreds of items previously available. Members can enjoy up to 50% off a group of 8-15 grocery favorites that rotate on a weekly basis, including fresh produce, protein and everyday essentials. 

Meanwhile, on the heels of four recent store openings, Amazon unveiled more new and refreshed stores this week in California and the Chicago area. PG was on hand for the Sept. 12 reopening of an Amazon Fresh outpost in Naperville, Ill., which features the latest store designs, technologies and an expanded assortment of everyday essentials, fresh foods and meal solutions.

5. Grocery Tourism and Other Store Experiences

Summer may be fading into fall, but the viral "grocery tourism" trend continues to get attention. This week, PG delved into this buzzworthy topic, speaking to grocers, including Jon Koontz of Leevers Supermarkets, about how they are building on long-standing approach to spotlight local products and meet the needs a diverse customer base that includes out-of-town visitors.

Location analytics confirms the spike in sales in tourist areas where visitors can swell a grocer’s customer base. “In general, we do see visitation trends to grocery stores and other food retailers in tourist markets outperform during the summer months. Each destination is slightly different given the number of visitors and the number of food retailers local to that market,” said R.J. Hottovy, head of analytical research at location analytics firm Placer.ai.

The store experience was in the spotlight in another popular story this week that provides an inside look at a first-of-kind ALDIgo automatic checkout system. PG visited that ALDI store in Aurora, Ill., to see how the computer vision technology from tech partner Grabango makes the checkout experience faster and easier. Grabango’s CEO Will Glaser also recently talked with PG about what he believes is the future for grocery checkout that benefits shoppers, associates and retailers.