GROCERY

Ahold-ing Strong

Ahold Delhaize’s online sales boomed in 2020, but it’s packing its digital cart even tighter. The Dutch grocery giant's deepening push into e-comm reflects how grocers in general are approaching the industry-wide digital shift.  

Rewind: The Food Lion, Stop & Shop, and Peapod owner’s e-comm biz more than doubled in 2020, but digital still only accounted for 4.3% of Ahold’s $54 billion in 2020 US sales. 

Fast-forward: Ahold CFO Natalie Knight told the WSJ that the company increased omnichannel investments 2x last year—and now it wants to double down on the double down. 

• By year’s end, Ahold aims to expand its buy online, pick up in store (BOPIS) business to 1,400 stores, up from 1,116 at the end of last year, and twice as many as in early 2020. 
• Ahold also expects its own e-comm biz to benefit from its 80% ownership of FreshDirect, but the details are fuzzy. New M&As could also be in the works.
• Like Walmart, Ahold will experiment with robotics to streamline its fulfillment processes. 

Keeping Up with the Consumers 

Some industry experts believe grocery’s pandemic honeymoon phase is coming to an end as consumers return to restaurants. Grocery sales are estimated to fall 5% in 2021 after increasing 11% last year, according to a UBS analyst. So, less than last year, but still more than the before times. 

Getting ahead: When the dust settles, grocers big and small expect omnichannel to account for a higher share of sales than before. That’s why Ahold’s e-comm adjustments are the rule—not the exception. For example...

• On the back of a 118% increase in 2020 digital sales, Kroger partnered with software company Ocado to build an automated fulfillment center in Phoenix. 
• Costco’s New Mexico curbside pickup pilot with Instacart is exceeding expectations around customer basket sizes, Costco CFO Richard Galanti told USA Today. 

Zoom out: As shopping habits normalize and appetite for automation increases, we could see more layoffs and store closures in the grocery world—particularly among smaller chains, reports CNN Business. 

APPAREL

Passport to Pullbacks

Three words that rarely bode well in retail: “weighing its options.” Used in a sentence: Gap is weighing its options for a potential sale of its China business, per Bloomberg.

The backstory: Cargo shorts must not have been as universally beloved as execs had hoped when Gap entered China, one of the world’s largest fashion markets, in 2010. 

• Gap operates IRL stores throughout China and a digital one on Alibaba’s Tmall platform. Still, Bloomberg reports Asia sales only account for 5% of Gap’s total revenue. 
• Gap already pulled its Old Navy label from China last year. 

A sale hasn’t been finalized yet, and there’s reportedly a chance Gap could hang on to its Chinese biz. But international investments are losing their luster across the Gap portfolio: The company said last week it’s reassessing its European footprint, too.  

Back at home...Gap’s relying on two types of peacocking—flashy apparel and a flashier collab—to revamp sales. Revenue declined 5% in Q4 2020, despite e-comm gains. 

Zoom out: China is expected to be the first country where online sales outpace offline sales in 2021, per eMarketer data. No wonder it’s a prime expansion target for many other brands, from sports apparel to luxury. 

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EXPERIENCE

Choose Your Own Adornment

Signet Jewelers just told us it’s confident in offline retail without telling us it’s confident in offline retail. Jared, its most upscale brand, is opening mini customization shops called The Foundry in 19 stores. 

The floorplan: At Foundry counters, shoppers can collab with Jared jewelry designers on bespoke pieces or edits to family heirlooms.

• In a double-upcycling move, some locations also repurpose space left over by a previous Pandora partnership, per Forbes.

The sales plan: Jared thinks it can capture new and returning wrists by making typically pricey customizations affordable.

• "We're seeing an acceleration of demand for 'custom,'" Bill Brace, EVP and Jared executive general manager, told us. Brace said it's because people are more sentimental about their relationships during the pandemic.
• Those fuzzy feelings could generate $30+ million in sales this year, Brace told Forbes. 

The traffic plan: Across its brands, Signet is reviving capital-E experiences to woo shoppers back indoors. At Piercing Pagoda, it’s adding expanded piercing options in a bet on a self-adornment resurgence.  

Brace told Retail Brew it's understandable that many people still prefer digital, but "it's important to accentuate what can only be done uniquely inside a store."

WHAT ELSE IS BREWING

• Dollar General is exploring a partnership with the CDC to distribute vaccines at stores.
• Inditex anticipates almost all of its 6,829 stores globally will reopen by April. 
• H-E-B employees are demanding management reinstate its store mask policy. 
• Target is launching a new private label food brand, Favorite Day, in April.
• Walmart will host its second TikTok livestream shopping event tomorrow

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COMMUNITY

On Wednesdays, we wear pink spotlight Retail Brew's readers. Want to be featured in an upcoming edition? Click here and introduce yourself. 

As the director of community at Postscript, an SMS marketing firm, Alicia Thomas makes sure brands never get left on read—and a lot more. 

Describe your role in a sentence. I build educational tools to help brands improve communications with their shoppers.

One thing we can’t guess about your career from LinkedIn: I am super passionate about mentorship and building a great workplace culture. 

Favorite project you’ve worked on: Fantastic Texts. It's a mega resource of SMS examples for brands to use as inspiration in their marketing. We had a ton of fun with the design for the site.

An emerging retail trend you’re bullish on: The comeback of the QR code! It's a great way for marketers to connect with folks and it's environmentally friendly.

Hands down, the best fast food chain is...Tasty Burger! Best shakes/fries duo.

SWAPPING SKUS

Like everything and everyone else, restaurants and chains are adapting to pandemic realities with the help of shiny new tech solutions. 

• Popeyes and Burger King’s parent company wants to predict your order even before you pull up to the drive-through. (NYT)
• Restaurant reservation startup Tock was dealt a major blow by the pandemic, which is why it pivoted to take on the likes of DoorDash and Seamless. (Fast Company)

ICYMI

Catch up on the Retail Brew stories you may have missed.

• How Eight DTC Brands Are Preparing to Scale Their Teams
• Port Congestion Causes Delays, Increased Costs for Retailers
• Launchpad: New Brands to Know in March