"Buy Anywhere, Anytime, Anyplace" is the new mantra that US food retailers are passionately committed to providing consumers with a seamless experience. From fast deliveries to payment systems and from the sale of food to the offer of food kits, supermarket chains have been in constant competition for some time now. Industry experts believe that competition in the US food market will further intensify in the digital domain and players will need to constantly re-focus their strategy to counteract it.
Of course, either you "shape or ship". , The Kroger Co. ( KR – Free Report) has highlighted the situation and created a steadily growing niche in the burgeoning online food market. The final deal with Nuro ̵
Food industry has faced fierce competition, higher input costs, aggressive advertising environment and thin margins. The industry was shocked by the news of Amazon's acquisition of Whole Foods ( AMZN – Free Report). This merger of online market with physical stores caused a tectonic shift in the food landscape. Amazon can now leverage Whole Foods' expertise in sourcing fresh produce with its own data mining techniques.
Amazon has been trying to exploit the nooks and crannies of the online food delivery space, evidently through its free two-hour delivery of Whole Foods products to Prime customers. It goes one step further by helping small businesses or entrepreneurs build a delivery business using their Amazon Delivery Service Partner Program and using the same as a delivery tool.
Experts believe that Amazon will not do anything about the threat posed by Walmart, which has a dominant position in the US food market and has gradually built up its e-commerce muscle building.
Walmart ( WMT – Free Report) was proactive in expanding the fast-growing online grocery. The company extended the alliance with Deliv, the last-mile logistics provider, to support food delivery on the same day. In addition, the company acquired the delivery company Parcel Inc. to extend same day deliveries. The company also worked with Uber and Lyft vans to provide fast on-line grocery deliveries. The company also worked with postmates to deliver food.
Another player, Target ( TGT – Free Report), is using resources to expand omni-channel capabilities and expand delivery options on the same day. To this end, the company has streamlined the supply chain by delivering same-day purchases on a flat-rate basis, as well as technology and process improvements. In addition, the company purchased Shipt to extend the same day delivery service. In addition, the company's Target Restock program and drive-up service is worth noting when it comes to its efforts to join the online delivery train.
How Kröger wants to take over Amazon and Walmart
It is obvious that competition among grocers is far from subsiding, and Kroger understands that. The company's partnership with Nuro will definitely turn into a game changer to prove the food forwarding. Customers via the Kroger ClickList order system and the Nuro app can place delivery orders on the same day. Apart from that, the company's deal with Ocado, an online caterer, along with the acquisition of Home Chef, a food kit provider, is definitely a good step to keep up with the race.
Kroger's partnership with Ocado is in the right direction to overcome the competition. Both companies are expected to develop three automated storage facilities this year and plan to increase the number to 20 in the first three years. The discussed alliance is part of the company's "Restock Kroger" program, which is gaining momentum. In addition, Kröger plans to expand its "Scan, Bag, Pay & Go and Self-CheckOut" program in 2018 to almost 400 locations.
Kröger leaves no stone unturned to attract customers and generate additional revenue. The company remains on track to increase market share through the launch of new items, digital coupons and online orders to take the initiative in the business. We believe these strategies will support the company's performance and drive the stock further.
Over the last three months, # 3 (Hold) stocks have gained 19%, beating the industry by about 1%. , You can the complete list of today's Zacks # 1 Rank (Strong Buy) shares here .
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