In this file:
∑ Kroger Must Admit Its Amazon Problem
∑ Amazon's grocery grab squeezes debt-laden supermarket chains
∑ How Kroger Is Gearing Up to Fight Amazon
Kroger Must Admit Its Amazon Problem
By Sarah Halzack, Bloomberg
Oct 11, 2017
Alert to Kroger Co.: The first step to fixing a problem is acknowledging you have one.
An investor presentation on Wednesday was an opportunity for Kroger executives to change a calcifying perception that the grocery giant won't be able to hold its own against a Whole Foods Market now owned by Amazon.com Inc.
Kroger put forth a new strategic plan, and investors perked up a bit, thanks to an announcement the company is exploring a sale of its convenience-store business.
But the presentation reflected a curious lack of awareness by Kroger of how serious the threats are to its core grocery business.
Executives sought to put this framework around the grocerís current rough patch: Kroger is a 134-year-old company, and retail undergoes shifts every 12 to 15 years. It often takes three to four years to work through those changes, and Kroger is simply in the middle of that work.
But the shift to e-commerce is not like the other marketplace ebbs and flows Kroger has weathered over the years. It is a dramatically different business model, with a new set of competitors, logistical hurdles and profitability impediments.
If Kroger canít even recognize that challenge, then I struggle to see how it will work its way out of it.
Other aspects of the presentation, too, gave me pause about how well-equipped Kroger is to win the food fight. Executives spent a good bit of time talking about how they were going unlock the power of data science to build personalized recommendations and experiences for shoppers.
As Iíve noted before, personalization is a genuinely good idea for retailers. But the industry has really struggled to implement it in a way that lives up to its promises. Nothing Kroger said on Wednesday gave me confidence it will be among the first to break that pattern.
When executives proudly discussed achievements like knowing their shoppersí hobbies or whether they use an iPhone or an Android device, all I could think was: Isnít this simply the standard now that weíre many years into the era of Big Data? What retailer isnít doing something like this, or at least trying to?
Amazon's grocery grab squeezes debt-laden supermarket chains
Jodi Xu Klein, Craig Giammona and Eliza Ronalds-Hannon, Bloomberg
via Chicago Tribune - Oct 11, 2017
Just over a month after Amazon.com ate Whole Foods, the shakeout in the American grocery aisle keeps getting uglier.
The latest sign of trouble: Private-equity giant Apollo Global Management recently tossed a $50 million lifeline to Fresh Market, the struggling high-end chain it took private only 17 months ago.
It will only get worse from here, analysts say. Under Amazon, Whole Foods has been cutting prices of marquee products including organic kale and avocados -- a harbinger of the price wars to come. Among the most vulnerable are small regional chains that were facing fierce competition even before Amazon showed up.
"The amount of pressure the Amazon and Whole Foods deal puts on the grocery sector is going to be very significant, and the full ramifications will only be seen over time," said Antony Karabus, chief executive officer at HRC Retail Advisory, a retail turnaround and performance-improvement consulting firm.
That's because Amazon founder Jeff Bezos has never really cared much about profit margins, while old-school grocery stores live or die by them. Expect Amazon to keep squeezing and squeezing.
Fresh Market looks like a case study in the troubled economics of the grocery business. When Apollo bought the chain, for about $1.4 billion, the private-equity firm was coming off successes in the industry. Apollo made about $2 billion turning around Sprouts Farmers Market, and before that, made a profit on its stake in Smart & Final Stores Inc., a warehouse grocery chain.
That was then. Nowadays the business confronts the deepest round of food-price deflation in 60 years...
How Kroger Is Gearing Up to Fight Amazon
By Chris Lange, 24/7 Wall St
October 11, 2017
Kroger Co. (NYSE: KR) shares saw a nice uptick early Wednesday after the grocer came out and said at its annual investor conference that it plans to redefine the food and grocery experience. Kroger is calling this new direction the Restock Kroger Plan. Not to mention, the company also reaffirmed its 2017 guidance.
The Restock Kroger Plan will be fueled by capital investments, cost savings and free cash flow. The plan has four main drivers.
First, the company is looking to redefine the food and grocery customer experience by accelerating its digital and e-commerce efforts, applying its customer data and personalization expertise.
Kroger also will expand partnerships to create customer value by using more of its capital to fund technology and infrastructure upgrades, and to create alternative revenue streams. In part, the firm intends to redesign the front-end to maximize stores for self-checkout. At the same time, Kroger might explore the sale of some of its businesses.
Kroger plans to further develop talent by investing...