THE FRIDAY 5: Walmart Cuts Corporate Jobs; Are Instacart and Uber Eats Merging?
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. Walmart Shoring Up Corporate Staffing
News hit this week that Walmart, Inc. is tightening up its corporate staffing structure, laying off several hundreds of employees and consolidating regional offices. In addition, the company is shifting away from the work-from-home model and asking remote workers to return to office settings for a majority of their week. Walmart employees in “smaller offices” in Dallas, Atlanta and Toronto will move to the headquarters in Bentonville, Ark., or larger central hubs in Hoboken, N.J., or northern California.
The retailer has announced other efficiency-driven changes this year, including the closure of its Walmart Health segment following the determination that it is not a sustainable business for the organization. In February, reports emerged that Walmart was closing U.S. technology hubs in Austin, Texas, Portland, Ore., and Carlsbad, Calif., and shuffling those workers to other locations. Also closing: an innovation hub called Store Nº8, staffed by team members in Bentonville, Hoboken, N.J., and Los Angeles.
Meanwhile, Walmart also shared its Q1 fiscal report this week, with consolidated revenue rising nearly 6% to top $161.5 billion and adjusted operating income climbing 13.7%, fueled by higher gross margins and growth in membership income. Net sales for Walmart U.S. edged up 4.6%, coming in at $108.7 billion for the quarter compared to $103.9 billion for the same period last year, while same store sales rose 3.8%.
2. Grappling With Higher Food Costs
As the cost of dining out continues to rise, Harris Teeter is now offering some of its most popular prepared food items for just $5 each weekday. The $5 Meal Days items are available for a limited time at participating stores across the greater Washington, D.C., area, including the newest Harris Teeter, which just opened in UrbA Plaza, in Arlington, Va.
Speaking of higher food costs, readers were also interested in news that several members of Congress sent a letter to President Joe Biden on May 13, imploring him to take executive action on elevated inflation for grocers and CPG manufacturers as their efforts to pass legislative action remain in limbo in the chambers.
In the letter, more than 40 signatories from the U.S. Senate and House of Representatives asked Biden to exert what they believe is his executive authority to pressure businesses in the food and beverage, grocery and agriculture industries. Among other suggestions for addressing what they deem price fixing, the lawmakers want Biden to ask the Federal Trade Commission to act on a rule that limits or stops “exclusionary contracting” in the food industry, such as slotting fees and certain category management practices. The group also called for a joint task force to look into pricing across the food chain.
3. Can We Expect a Merger Between Instacart and Uber Eats?
The news that two leaders in the delivery space are entering a new partnership has given food for thought to industry observers. The collaboration between Instacart and Uber Eats, through which Instacart users can now order restaurant delivery from an Uber Eats tab on the app, has led at least one M&A expert to speculate that the mash-up could be a prelude to a possible merger.
Aron Bohlig, managing partner at boutique investment bank ComCap, talked to Progressive Grocer about the marriage between the two food delivery players at a time when rivals Walmart and Amazon are shoring up their own delivery businesses. “In short, a theoretical acquisition would be a great idea for Uber but not as much for Instacart because Instacart is still relatively early in its business,” he remarked, adding that grocery delivery accounts for a respectable percentage of Uber's order traffic. “Uber would view that as an interesting category and, at 10 to 15% of volume, it would be good for them.”
[RELATED: Uber Stresses ‘Togetherness’ in New Product Rollouts]
4. Weis Markets, Meijer Growing Their Footprints
Growth for both Weis Markets and Midwest retailer Meijer made news this week, with Weis President and CEO Jonathan H. Weis telling company shareholders that “We plan for record investments in 2024, when we will begin the construction of six new stores, which we expect to open in 2025.”
Continued Weis: “In addition, we have planned 11 major store remodels and 15 minor store remodels, along with five new fuel centers. We will also continue to make sizable technology investments across the company, which help us drive profitable sales.”
Meijer, meanwhile, unveiled three new stores under its own banner on May 14. The Michigan-based retailer held grand openings for supercenters in Hillsdale, Mich., Alliance, Ohio, and North Canton, Ohio.
5. The Fresh Market Makes a Better Pizza
The Fresh Market has added to its fresh food lineup authentic Neapolitan-style Hot and Fresh Pizza, which, according to the regional grocer, was created to surpass the pizzas offered by America’s best restaurant chains. The pizza features quality fresh ingredients such as crushed Italian tomatoes and mozzarella cheese atop a crisp golden crust made with Neapolitan flour. The mozzarella cheese is sourced from the famed BelGioioso brand, while the tomatoes are grown in the fertile volcanic soils near Mt. Vesuvius and subtly seasoned with salt.
The new Hot and Fresh Pizza line also includes meaty Hot Honey Pepperoni and Classic Pepperoni, as well as meat-free Cheese, Ensalada, Margherita and Pepe Fromage, offering a flavor for every palate. Each flavor comes in two affordable sizes: 12 inches (starting at $7.99), designed for one or two people, and 16 inches (starting at $12.99)
