Love it or hate it, grocery shopping is an inevitable part of life for many of us, and for most Americans, it’s a personal, comforting weekly ritual. At least 40% of Americans make a weekly trip to the supermarket, while 6% visit grocery stores seven times a week! How many grocery stores are there in the US?There are an estimated 40,000 grocery stores in the US, 70% of which account for supermarkets, warehouses, supercenters, club stores, natural/gourmet stores while military commissaries make up the remaining 30%.In this blog post, we take a look at the largest grocery chains in the US (by revenue) and the initiatives they're implementing - from easy in-store navigation to AR to self-checkout counters - to transform the grocery experience for shoppers.

Kroger:

Kroger is America’s largest grocery chain ($121B in sales, fiscal 2018). One of Kroger’s major advantages when compared to all other grocery retailers (with the exception of Walmart) is its sheer reach; the retailer operates some 2,800 supermarkets, 790 convenience stores and 125 gas stations in 35 locations. Kroger has continued to proactively demonstrate its understanding of the changing grocery landscape and shopper behavior through various initiatives and innovations. Starting with ClickList, its online curbside pickup service which it has made available in over 1,250 locations, it has also expanded its grocery delivery via Instacart to about 30 markets, signed a deal with popular British e-supermarket Ocado to open 20 automated warehouses which will significantly raise the number of online grocery orders it assembles and delivers, launched theScan, Bag, Goself-checkout app, piloted one-day delivery by robot cars in partnership with autonomous vehicle start-up Nuro, piloted two data-driven grocery stores in partnership with Microsoft which is being seen as a move to counter headwinds brought in by Amazon, openedcompany-operated restaurants, and even debuted an in-house food hall in Cincinnati this year!We can also expect to see a higher degree of personalization in its product mix, thanks to Machine learning advancements at Kroger’s subsidiary 84.51 - a data analytics firm that acts as a strong contender against the likes of Amazon. The proof is already evident in Kroger’s launch of private labels in the clothing and men’s grooming categories. By getting its hands on the purchase data of Kroger’s 60 million+ customers, 84.51 enables Kroger to run precision marketing programs across all digital channels. Kroger has also launched a mobile app called OptUp that helps customers make more informed, health-conscious decisions when buying groceries - an important initiative considering that it comes at a time when people are switching to healthy and flexitarian lifestyles. With all these efforts geared towards integrating technology with its business by putting the customer first, Kroger might just continue to stay at the top of its game and remain future-proof.

‍Costco:

‍Costco's annual membership fee is a paltry $60. While this might sound like Costco is shooting itself in the leg, it has turned out well for Costco. The company has managed to stay competitive and has developed a fierce tribe of loyalists over the years, thanks primarily to the low membership fee (which accounts for nearly 2.29% of sales and makes up much of the operating income).Costco's typical shopper is one who likes the in-store shopping experience. Families that enjoy shopping together, can be seen at Costco perusing books, electronics, and furniture before hitting the grocery aisles. The grocery retailer hasn't been a popular contender in eCommerce but has nevertheless made strides by:Offering two-day delivery across the continental U.S for dry groceries, and same-day delivery for fresh food through partnerships with Instacart and Shipt. It also offers click-and-collect service via pickup lockers in 10 locations and is expanding that facility to another 100 locations.Upgrading their mobile app to allow for a smarter, seamless shopping experience. Members can now browse selections and shop directly from the app, checking an item’s availability and opting to either have it bought online and picked up in-store or have it delivered to their homes.Accepting mobile payments - probably one of the most exciting developments especially for millennials and early adopters of mobile tech. Members can now use Apple Pay, Google Wallet, and Samsung Pay to pay for their purchases.Partnering with Agtech company Zest labs to “optimize delivered freshness of produce” from suppliers in California to warehouses on the west and east coasts. Initial steps are underway to provide analytic insights about their supply chain to help better manage freshness.BOPIS, mobile payments, and same-day delivery are good starters, but Costco must remember that these are increasingly becoming table stakes for any retailer and/or DTC brand. Given the scale at which Kroger, Walmart, and Amazon are transforming their shopping experiences, Costco might need to make bolder moves along the lines of AR, VR, and unmanned checkouts to truly compete and live up exactly to what CFO Richard Galanti says - “The joy of a visit to Costco lies in large part to the sense of exploration, wandering around the aisles full of piled-up stock, spotting an unexpected bargain or stumbling across that one thing that you didn’t go into the store to get but suddenly realize you can’t live without”.

‍Aldi:

‍IRI’s Q3 2019 "Consumer Connect" report has found that U.S. consumers are buying more private-label goods across ages and demographics, and have shifted their attitudes and behaviors regarding private goods. That should come as good news for Aldi, 90% of whose grocery products are private labels.The thoroughly cut-throat and efficient German grocery store chain has devised many tactics to beat top retailers like Walmart and Kroger at their own game. Firstly, it’s stores are deliberately designed like small boxes - each with a maximum of five or six aisles - to ease the shopping experience for customers, and not instill in them the feeling of having walked into yet another warehouse club or supercenter. Unlike how top retailers are only now paying attention to smaller-format stores, Aldi, by design is small. A typical Aldi store averages to about 12,000 square foot, compared to a Walmart supercenter (178,000 sq.ft) or a Costco warehouse (145,000 sq.ft).Secondly, the retailer stocks 1,400 SKUs at most, unlike a Walmart or a Kroger which can stock anywhere between 40,000 to 100,000 SKUs. Moreover, the SKUs are stocked in their original cardboard boxes so employees don’t have to waste time unpacking and stocking shelves.However, there are some surprises. Aldi is brutally adherent to its policy of making customers rent a shopping cart on their way into the grocery store and bag their own purchases away from the checkout counter. Also, plastic and paper bags are only available for a fee. By stripping down on frills like these, Aldi is able to keep real estate and labor costs down and offer specialty products at prices lower than Walmart, which has birthed its own tribe of loyalists (otherwise called ‘Aldi Nerds’). Thanks to them, Aldi has beat Walmart and other supermarkets in customer satisfaction surveys, and Aldi shoppers anticipate more future visits to the grocer.Aldi has more than 1,800 stores in 35 states and is focused on growing in the Midwest, the Mid-Atlantic, Florida, and California. It’s currently on track to become America’s third-largest supermarket chain behind Walmart and Kroger, with 2,500 grocery stores by the end of 2022. [simplecta title="Want access to 50+ data points about 300,000 eCommerce companies?" clr="pink" btn="Try PipeCandy!" redirect="true"][/simplecta]  

‍Whole foods:

‍Whole Foods was born at a time when natural and organic products weren’t a part of the mainstream American diet yet. Started by two college dropouts, it grew and expanded through numerous acquisitions and captured a large percentage of customers. In the late 2000s, more and more competitors - chiefly, Walmart - entered the natural and organic product space and started driving down prices.True to its mission of ‘continually experiments and innovates’, Whole Foods went on to implement digital and in-store initiatives to improve the shopping experience for its customers. The partnership with Infor in 2015 to automate its inventory systems and supply chain helped it reduce costs and sell products at competitive prices. As more customers took to online shopping, the retailer partnered with Instacart and offered online delivery from over 75 locations before winding down their partnership late in 2018 - a natural after-effect of its acquisition by Amazon in 2017.The Amazon acquisition brought some price reductions (which essentially goes against the elevated value proposition of Whole Foods), Echos and Prime-attired staff to its 470 stores. The retail beast was also quick to integrate its Prime Now program with Whole Foods, offering free two-hour grocery delivery from Whole Foods to its Prime customers (now available in 75 markets) and a 30-minute curbside pickup option (now available at 22 locations). Also, Whole Foods shoppers can use their mobile app to pay in-store using their Amazon Prime accounts. The payment option adds convenience by allowing customers to quickly pay with their preferred method while also maintaining interaction with cashiers.On the other side, dissatisfaction has also been brewingamong some customers who think the Whole Foods shopping experience has taken a beating because of Amazon’s Prime Now shoppers crowding the stores, running into customers in the aisles and queuing up at the checkout counters. That said, same-store sales have grown about 3% since Amazon’s acquisition, and the grocer reportedly got a big lift from July's Prime Day sale, according to RBC.

‍Publix:

‍Publix has been slow to kick-start its eCommerce game compared to the larger grocers. The supermarket chain began testing home delivery with Instacart in 2016 and aggressively rolled out the service to the majority of its stores in 2017. According to e-commerce intelligence company Edison Trends, Publix is currently Instacart’s top-selling online grocer. Despite losing Whole Foods, Instacart has more than made up for the loss by adding new business from grocers such as Publix and Wegmans. The supermarket chain plans to make home delivery available at all its locations by 2020.The retailer has also made available the option of curbside pickup for its customers. Now, self-checkout scanners are popping up in some of Publix’s stores. The do-it-yourself registers, which allow shoppers to scan, bag and pay for purchases without human assistance, have recently arrived in two South Florida stores.The company has opened 22 new supermarkets in 2019, bringing its total footprint to about 1,228 grocery stores in seven southeastern states. As the largest employee-owned company, Publix emphasizes greatly on employee friendliness, store cleanliness, and customer experience. In fact, it is notoriously popular for its razor-sharp focus on consumer experience, and with good reason. Check out how they pay attention to the little things!

‍Albertsons:

‍With over 2,262 grocery stores scattered across North America, Albertsons is the second-largest grocery retailer (in terms of the number of stores) next only to Kroger. Under the new leadership of Vivek Sankaran, Albertsons is revving up its “four engines of growth”. As the new CEO revealed, the areas that it is eyeing to gain ground are its grocery stores, eCommerce, customer loyalty and private label.Starting with the store, the retailer is trying to bring in a high-touch, sensory element to shopping in the form of quality produce, meal solutions and seamless checkout. Self-checkout stations have been installed in 1,075 stores and the company continues to install a number of new self-checkout lanes and upgrade existing ones. By the end of the year, it plans to offer frictionless, self-checkout in over 1,160 stores. It has also been investing in technology to automate processes and offer competitive pricing and promotions. To support that vision, it plans to roll out upgraded pricing and promotion tools in Q4 this year. In a recent analysis, Albertson’s found that its eCommerce customers spend way more than its in-store customers. The earnings from Q2 proved their findings right; online sales were up by 40% YoY. Taking this into account, the retailer continues to enhance its website and mobile app interfaces to provide a seamless discovery-to-checkout experience online as well. Also, it plans to expand its click-and-collect program from 500 to 600 stores by the end of 2019.On the loyalty front, the retailer’s shopper enrollments have reportedly increased by 24%, and continue to feed data for its customer-centric marketing and merchandising activities. The retailer is continuing to invest in digital marketing and customer acquisition programs to increase the number of engaged shoppers as it aims for a bigger share of wallet.Private brand penetration for Albertson’s was an estimated 25% in both Q2 and Q1. However, the retailer is slated to launch 800 new items under its own brand in 2019, with 439 of those hitting the shelves in H1. Some of its popular brands have reportedly topped $1 billion in sales!

‍H-E-B:

‍HEB is a privately held supermarket chain that was started in Texas, which now has more than 350 stores spread across the US and north-east Mexico.The company rolled out its sister chain Central market, exclusively to provide fresh and organic food to its customers. It has also invested in manufacturing facilities in Texas. It has a strong presence in the private-label space through its wide range of in-house brands for snacks, milk, bread, ready-to-eat meat, and meals.Seen as a ‘Texas-cult favorite’, HEB has made several investments aimed at improving customer experience; most recently, it announced that it is building its digital capabilities with two tech centers, and part of its digital plan is to improve the in-store experience through technology in lieu of focusing solely on its online offerings. It also offers cooking demos, curbside pick-up and a variety of in-store dining options. Recently, to stand up to its competition, HEB has made significant hires and investments in their digital retail space. It opened an 81,000 sq.feet digital innovation center in East Austin, Texas, which also serves as a headquarters for Favour, an on-demand food and grocery company acquired by HEB in February 2018.HEB is conspicuously demonstrating that it is taking tech seriously. Rakuten Ready study shows that the HEB excelled at curbside pickup compared to its competitors with the average wait time being 4 minutes, 5 seconds. 84% of HEB orders are reportedly ready within 6 minutes and 16% delivered in less than 2 minutes. The factors responsible for these achievements are an app to communicate with the customers, dedicated parking spots, prominent signage, and well-trained employees.Also, efforts are being made to digitize shopping by building apps so that the customers can access real-time information regarding the products available in their supermarkets and make informed choices.

‍Walmart’s Neighborhood Market:

‍A grocery chain from Walmart, Neighborhood Market competes with supermarkets and Dollar shops. The grocery stores look similar to Walmart’s big-box stores but are smaller in size. Customers are welcomed by an air of familiarity in the form of high exposed ceilings and long aisles.Neighborhood Market focuses on three key areas namely Grocery, Pharmacy and fuel station. As the supercenters seem to hit a saturation point in terms of competition, these smaller stores - often located in urban areas - occupy less space and are proving to be an effective strategy to gain revenue. Target’s been doing this in the form of its smaller-format stores in urban areas and college campuses.There are around 700 Neighborhood Market stores spread across the US, offering a mix of fresh groceries, on-site services such as a full pharmacy, fuel station and free store-pickup service for products on Walmart.com. Earlier this year, Walmart shut down eight of its neighborhood markets stores; this could have been a strategic move to improve online sales by accelerating closure of stores that weren’t strategically important. However, Walmart remains the largest seller of groceries. The retailer’s eCommerce sales grew by 43% YoY in 2019, benefiting from investments in grocery like pickup and delivery. Grocery pickup is now offered in more than 1,800 locations, and the company said it is on track to reach about 40% of the population by year-end with grocery delivery.

‍Ahold Delhaize:

‍It is a Dutch-Belgian company that operates supermarkets and eCommerce businesses. The merger of Ahold and Delhaize Group in July 2016 birthed Ahold Delhaize. Its 21 local brands employ 375,000 people at 6,500 grocery stores in 11 countries.The company has grown progressively over the years, to becoming the third-largest grocery retailer in the United States. It’s total revenue in Q3 was up 2.9% YoY (or $18.5 billion), in which the U.S increase was 1.8%, primarily owing to strong online sales. Ahold Delhaize-owned Giant Food Stores operates two other grocery brands - Giant and Martin’s.The retailer has some 600 click-and-collect points across the U.S and is making delivery and pick up options available to 65% percent of customers by 2020. Its larger revenue goal in the short-term is to achieve an online revenue of $8 billion by 2021. Wegmans:Being a brand that customers like is one thing but being loved is a different ball game. Wegmans is a living example for the fact “being big does not mean being the best”.The numbers speak for themselves. Its revenue for 2018 was just $9.2 billion behind to that of Kroger at $121 billion and $60.5 billion of Albertsons. However, the average sales of a Wegmans store per week are $2.5 million that is on average, five times the sales of a typical supermarket.You could say that Wegmans is a paradox in the grocery world. Given this profitable operation, Wegmans is able to experiment with its ideas like opening a culinary innovation center in Rochester, with a lot of risk tolerance, a luxury most other retailers cannot afford. When quality, customer service, and prices come together in the right combination, it makes for a winning customer delight & success formula. Although small, Wegman's has mastered the art of this formula - Take a look at how many fans came from across the country for their opening of the Brooklyn store. The retailer is also known for its impeccable store layout and knowledgeable staff. These factors lure first-time customers and keep them coming back for more. Besides, it also offers quality home label brands at a reasonable price point. Its array of offerings like bakery, deli, pizza shop within its shops and the fact that it is the first grocery retailer to launch an app for the visually-impaired people bolstered Wegmans’ positive image among consumers.