STORE SPACES

Regional grocery chain operator continues rapid expansion across Florida

BY Deena M. Amato-McCoy

Southeastern Grocers is keeping up a swift pace as it opens eight new stores in the Sunshine State.

The company will open five new Fresco y Más stores in South Florida, and three new Harveys Supermarkets in West Florida. Among with the strategic conversion of Winn-Dixie stores into Fresco y Más and Harveys Supermarkets, these two brands have become the fastest growing banners in the company.

Fresco y Más and Harveys Supermarket locations emphasize the company’s multi-format approach as it continues to diversify its retail footprint. By listening to customers and evaluating key consumer insights, Southeastern Grocers is also personalizing each banner to provide the shopping experience, products and services that meet the needs of the communities they operate in.

Specifically, the company’s newest banner, Fresco y Más, caters to an ever-growing Hispanic population with amenities such as a full-service Latin Butcher, authentic prepared foods, and Latin-style cafe. Meanwhile, the new Harveys Supermarket stores will provide customers with a personalized shopping experience complete with products fit for their unique community that offer significant value and great prices every day.

“The unprecedented success we have witnessed over the past year at our Fresco y Más and Harveys Supermarket banners is a clear indicator that we are providing localized shopping experiences that resonate with our customers,” said Anthony Hucker, president and CEO of Southeastern Grocers.

“Rather than relying on one store model, we are entrenching ourselves in the communities we serve to better understand each unique landscape, and our customers’ shopping habits,” he said. “More than ever, we are committed to providing our customers with quality, service and value, and the overwhelming positive response from shoppers indicates we are earning their trust as we continue to unveil new Fresco y Más and Harveys Supermarket stores.”

The launch of five new Fresco y Más locations will expand the banner to 23 stores throughout Miami-Dade, Broward, and Palm Beach counties.

Harveys Supermarket’s three new stores in West Florida will grow the banner to a total of 80 locations in Florida, Georgia, South Carolina and North Carolina.

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FINANCE

Kroger Co. outlines new corporate mission

BY Deena M. Amato-McCoy

The nation’s largest grocery store operator is introducing a new plan that it expects will redefine the customer experience.

Kroger Co. reaffirmed its 2017 forecast sales growth of 0.5 to 1.0%, excluding fuel, for the remainder of 2017. Meanwhile, net earnings are still on track to hit between $1.74 and $1.79 per diluted share, including an estimated $.09 for the 53rd week.

This confirmation comes amid growing pressure from Amazon, especially since its recent acquisition of Whole Foods Market has given the e-retailer an even stronger foothold into the supermarket segment.

To fight back, the supermarket operator announced a new program that it expects to drive more engagement and sales.

Called Restock Kroger, the program will leverage the company’s food expertise and data analytics to create new and highly-relevant customer experiences delivered both digitally and in stores. The company will invest an estimated $9 billion in capital investments in the program over the next three years — a move that it expects will generate $400 million in incremental operating margin by 2020.

The program is also designed to generate more than $4 billion of free cash flow over the next three years – nearly double what was generated over the previous three years, according to the company.

“Our goal is to continue generating shareholder value even as we make strategic investments to grow our business,” Mike Schlotman, Kroger’s executive VP and CFO said during the company’s annual investor meeting on Wednesday in New York.

The plan is based on four drivers, from redefining the food and grocery experience and expanding partnerships to developing talent and focusing on social impact. An overarching theme however, will be Kroger’s accelerated commitment to digital and e-commerce efforts, and applying customer data and personalization expertise through its 84.51 customer insights division to even more aspects of the business, including space optimization, pricing and brand growth.

It is also planning a front-end transformation that includes redesigning its front-end, including maximizing its self-checkout presence. This includes expanding its 20-store Scan, Bag, Go pilot to 400 stores in 2018.

Another way Kroger expects to transform the customer experience is by focusing on its Internet of Things sensor network, video analytics and machine learning networks, and complementing those innovations with robotics and artificial intelligence.

In another strategic move, Kroger is also considering putting its convenience store operation on the block. Kroger’s convenience store business includes 784 convenience stores that operate under the banners KwikShop, Tom Thumb and QuickStop across 18 states. It also has 68 franchise operations.

The division has delivered 62 consecutive quarters of identical store sales growth, and generated revenue of $1.4 billion in 2016. However, the operation could experience even more growth under a new owner, according to the grocer.

“Our convenience stores are strong, successful and growing with the potential to grow even more,” said Schlotman.

“We want to look at all options to ensure this part of the business is meeting its full potential,” he added. “Considering the current premium multiples for convenience stores, we feel it is our obligation as a management team to undertake this review.”

The company has hired Goldman Sachs & Co. to identify, review and evaluate the options.

Kroger operates nearly 2,800 U.S. supermarkets. The company also operates jewelry stores, retail health clinics and pharmacies.

 

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REAL ESTATE

Hecht: New Century City is watershed moment for Westfield

BY Al Urbanski

Westfield COO Bill Hecht looks at the billion-dollar re-do of the company’s Century City Mall in Los Angeles and sees the dawning of a new era in retail.

Bill Hecht

“We believed that, with Century City, we had the opportunity to evolve it into the next generation of retailing,” said Hecht on the occasion of the re-opening of the renovated mall. “We had a fantastic customer base and location. We have tourists, a local office population, and the Beverly Hills and Bel Air crowd that have always felt that Century City was their place to shop. We were able to approach this set with a blank canvas.”

The renovation added more than 400,000 sq. ft. of retail space to Century City, bringing the destination’s total to 1.3 million sq. ft. shared among what will be a total of about 230 shops upon final completion. The tenant mix reflects a change that Westfield says it will be bringing to all its malls, a formula that blends fitness, grocery, healthcare, and dining to luxury retail to make for a sort-of high-end necessity-based center.

The new Century City boasts the West Coast’s first Eataly, a new Nordstrom and Macy’s, a renovated Bloomingdale’s, an Equinox fitness club, a Gelson’s upscale supermarket and a 15-screen AMC Theatres, Coming soon: a health-and-wellness center from UCLA focused on preventive care.

Redone common areas and interiors will be graced by art works on loan from the Annenberg Center for Photography and the Los Angeles County Museum of Art. Permanent works will also be in residence from sculptors such rounded-form master Jun Kuneko and as Stan Bitters with his ceramic work “California DNA.”

“We were really sensitive to what our customers wanted, which could be summed up in two words: California Soul,” Hecht said. “You can walk into a center and feel the warm and fuzzies or you can not feel good at all. Now you go into Century City and you feel good.”

Westfield is investing plenty in spreading those California good vibrations. Another billion-dollar re-make is underway at Westfield Valley Fair in Santa Clara and a $600 million renovation will be unveiled later this year at Westfield UTC in San Diego.

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