Smart & Final focused on e-commerce growth
Smart & Final is evolving its value proposition by rebranding some of its banners and focusing more on e-commerce.
In its first quarter earnings report, Smart & Final Stores reported 5.1 percent growth in net sales during the period, which ended March 25, reaching $1,016.2 million. Net sales growth was driven by a 1.2 percent increase in comps and by the net sales contribution of new stores. The comps growth was composed of a 2.9 percent rise in comparable average transaction size, partly offset by a 1.7 drop in comparable transaction count.
Banner-wise, Smart & Final’s net sales were $795.2 million, a 4 percent rise from the $765 million in sales logged during the same period a year prior. Comps were flat.
Meanwhile, Cash&Carry Smart Foodservice stores enjoyed a 9.4 percent rise in net sales, to $221 million, compared with $202 million in Q1 2017. Comps grew 5.8 percent.
"Despite continuing promotional activity within the grocery landscape, we were able to improve our gross-margin rate driven by maturing new stores, merchandising initiatives aimed at both household and business customers, and the expansion of our marketing channels," said Smart & Final Stores President and CEO David Hirz. "We've also been successfully growing our business customer sales, a key differentiator for us in the market."
No new stores opened during the quarter, with openings planned for the latter half of the year, similar to 2017.
During the first quarter, Smart & Final grew e-commerce sales by more than 85 percent. The retailer revealed plans to continue growing e-comm in 2018, including the recent launch of its mobile app.
As reported last week, the e-commerce app, which is powered by Instacart, lets households, nonprofits and business customers order products online and have them delivered in two hours or less. The neighborhood warehouse grocery store’s app provides real-time order-fulfillment updates and connects customers directly with their personal shoppers.
“We expect the development of our ecommerce and related offerings will support customer traffic, through both customer acquisition and retention, as adoption of this channel accelerates," Hirz said.
Moreover, Cash&Carry Smart Foodservice banner will rebrand as Smart Foodservice Warehouse Stores to reflect six decades of evolution serving the foodservice industry. Such a focus allows the retailer to better communicate its mission of selling quality ingredients and restaurant supplies in a simple, convenient warehouse format.
"The updated name better reflects our mission and provides a much clearer message to current and future customers about the products and services we offer. This new name is a much more accurate reflection of who we are and what we do," noted Derek Jones, president of Smart Foodservice Warehouse Stores and EVP, Smart & Final.
The division currently operates 63 wholesale stores in Washington, Oregon, California, Idaho, Montana, Nevada and Utah.
Smart & Final, a consumer- and business-focused banner, operates 66 namesake stores and 194 Smart & Final Extra stores.