TABS Analytics Gives Online Grocery Reality Check

Dear Client:

Most big grocers are focusing their efforts on building out e-commerce and delivery. But online grocery is still a small piece of the pie (about 5%) thanks to supply and demand issues.

In fact, “Online grocery will never be profitable with the current business model,” said TABS Analytics ceo and founder Kurt Jetta during a webinar yesterday.

WHERE CONSUMERS SHOP REGULARLY. First, let’s take a look at where consumers are shopping regularly. Note, TABS defines ‘regularly’ modestly at 6+ times annually.

The two largest outlets are traditional grocery (75% are regular shoppers) and Wal-mart Supercenter (57% regular shoppers). In 2018, both outlets reported modest declines in purchasing.

Meanwhile, online grocery is making “meaningful gains” but is still “well below” other brick and mortar formats.

The biggest gains in grocery are actually coming from small format brick and mortar, according to TABS data.

NOT MEETING MIN. THRESHOLD FOR SUCCESS. 38% of consumers said they purchased groceries online in 2018 and just 17% said they purchase regularly, which brings loyal shoppers to 44% (purchased reg./ purchased any). But that’s “way short” of the 75% needed to ensure “sustainable success,” according to Kurt.

On a positive note, what that does mean is there’s still a lot of runway for the format to continue its growth trajectory, he said.

THE EVIDENCE. Kurt cited Trader Joe’s recent pull out of grocery deliver in Manhattan, and Amazon’s plans to strengthen its physical presence, as signs of the times. Kurt added that it’s “not clear why [Amazon] would feel compelled to get into brick and mortar grocery, maybe to prop up their e-commerce,” though they “haven’t shown expertise in doing it.”

For brick and mortar, consumers take care of the entire order fulfillment process by just driving to the store and walking the shelves themselves. For e-commerce, “retailers have to pick up that slack,” and that hurts margins/profits, said Kurt.

CONSUMERS LIKE SHOPPING IN-STORE. Turns out, most consumers actually like shopping in their local grocery store. At an average of 40+ trips per year, Kurt said that “doesn’t suggest a resounding dissatisfaction with the shopping experience.”


In case you missed this news this morning, Stoli Group confirmed that Hugues Pietrini has stepped down from his role as global president and ceo [see WSD 04-25-2019].

Rudy Costello will continue on as Stoli Group USA president and ceo, responsible for the US and Canada operations. Andreas Ioannides, current managing director of international distribution for Stoli Group, will be responsible for managing the rest-of-world markets.

No word on who, if anyone, will replace Hugues.


SMWE PERFORMANCE IMPROVES IN 2019. After ending 2018 in the red, Ste. Michelle Wine Estates net sales were up 6.3% in Q1 2019, thanks to higher shipment volume and just slightly offset by higher promotional investments, according to parent company Altria’s earnings. Wine shipment volumes were up 8% for the quarter to about 1.9 million cases.

CAMPARI LAUNCHES SKYY INFUSIONS COLD BREW. Skyy Infusions Cold Brew Coffee is infused with Arabica coffee beans and bottled at 70 proof. The Infusions line also includes Sun-Ripened Watermelon, Citrus, Blood Orange, Pineapple, Bartlett Pear, Honeycrisp Apple, Tropical Mango, Texas Grapefruit, Pacific Blueberry, Georgia Peach, Vanilla Bean, Wild Strawberry, Cherry and Raspberry. Cold Brew Coffee will be available for a limited time in select retailers nationwide at a suggested retail price of $14 a 750 ml and $17 a 1L.

ROUND BARN WINERY IS ENTERING THE RETAIL CHANNEL. After 22 years of selling exclusively from its family of properties, Michigan-based Round Barn Winery is entering the retail channel with canned Red Sangria and Crantini. They will be initially distributed at more than 150 Meijer’s stores and other regional grocers in Michigan, Illinois, Indiana, Ohio and Wisconsin.

REBEL YELL LAUNCHES NEW BRAND LOOK. Rebel Yell Kentucky Straight Bourbon has a new look for its brand lineup. The new bottle was designed by David Cole and features an embossed rounded shoulder in addition to a revised front and back label. In addition to the new packaging, the brand is launching a new variant this year, Rebel Yell Kentucky Straight Bourbon 100 proof. It will feature the new packaging and will be available at a suggested retail price of $20.

Until tomorrow,

“Instant gratification takes too long.” – Carrie Fisher

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