The 5 hottest grocery trends in 2018
Food retailers should be leveraging five key trends in 2018, according to a new study by commercial real estate brokerage firm JLL.
According to JLL’s Grocery Tracker 2018 report, grocery store openings were off 29% last year from 2016, as merchants “took a step back to examine existing footprints and re-evaluate company strategies.”
JLL adds that grocers are focused more than ever on five key trends for 2018:
Smaller and more focused stores: Smaller footprints have more opportunities in urban locations and in mixed use projects. Grocers like Aldi and Trader Joe’s benefit from the flexibility to take smaller spaces in vertically integrated projects. HyVee recently announced that while traditional-sized stores will still be rolled out, smaller format stores of 10,000 s.f. will be a focus. Some brands will continue expanding footprints, but traditional and legacy grocers may begin focusing on existing inventory and investing in improving the shopper experience
Data driven technology: As shoppers demand more digital integration, retailers have new access to unprecedented amounts of data. Restock Kroger, Kroger’s most recent innovation strategy, will tailor stores to the shoppers that frequent it, customizing shelf displays, store layouts, offered products and operations based on the preferences of local shoppers.
Blockchain: Blockchain is a digital technology that has been talked about at length in the media, but also tough to easily explain. For the grocery industry, blockchain has the capability of improving food safety, allowing products to be recalled more quickly, and improving inventory management. With blockchain’s ability to improve data management between stakeholders in the supply chain, the grocery industry is prime for integration.
Partnerships and consolidations: Kroger is not only looking to acquire Boxed but has been reportedly in discussions with Ace Hardware to allow the hardware supplier to have pop-up kiosks in Kroger stores. The acquisitions with the greatest implications will occur between grocers and non-grocery companies that focus on innovation and technology that can build upon digital networks, logistics, delivery, and customer engagement.
Rapid checkout: Expect grocers with existing rapid checkout technologies to continue to roll out programs across the country and for others to join the ranks of Kroger, Walmart and Amazon who have been testing checkout free concepts. Walmart is expanding Scan & Go mobile checkout to 100 more stores and Kroger’s Scan, Bag and Go will be in 400 stores in 2018, and to much fanfare, AmazonGo opened to the public in the beginning of 2018.
The brokerage firm adds that grocers are focused more than ever on fresh and healthy foods — amid a 9.8% surge in organic sales — affordability, accentuating private label offerings and improving their digital platforms to enhance customer convenience.
JLL contends, along with other analysts, that Amazon’s $13.7 billion acquisition of Whole Foods Market last year could fundamentally change the industry and the way groceries are sold.
“This acquisition will give Whole Foods the ability to test new ideas and concepts within the grocery industry with more frequency and speed, forcing competition and innovation in an industry that until recently has not seen much change,” JLL wrote.
To see more keys to grocer success, read JLL’s Grocery Tracker 2018 report.