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Amazon adds, expands Prime Now markets in time for holidays

BY Marianne Wilson

SEATTLE — It’s not like the holidays weren’t going to be challenging enough, but now Amazon.com is expanding its free same-day delivery service to more markets.

Amazon.com said it expanded it Prime free same-day delivery to Chicago and Orlando and new locations in the greater New York, northern New Jersey and Philadelphia area. The service, which requires an annual $99 Prime membership fee, is now available in 750 cities in 16 metropolitan areas. It launched it May.

That is not good news for operators of physical stores, many of who are still looking to optimize their omnichannel strategies and fine-tune promotional strategies designed to generate traffic to stores. Meanwhile, Amazon.com is raising the bar on shoppers’ expectations by telling customers they can order from an assortment of more than one million items as late as noon and receive same day orders over $35 before bed time, seven days a week.

“We’re focused on making Prime better and better and every day members discover how Prime Free Same-Day Delivery can make their lives easier,” said Greg Greeley, vice president of Amazon Prime.

In addition to the markets mentioned above, the free same-day delivery is available in Atlanta, Baltimore, Boston, Dallas-Ft Worth, Indianapolis, the Greater Los Angeles area, Phoenix, San Diego, the San Francisco Bay area including Oakland and San Jose, Seattle-Tacoma, the Tampa Bay area and Washington, D.C.

In the new Chicago market, coverage extends from downtown north to Evanston and Arlington Heights, west to Glen Ellyn and Downers Grove, and south to Oak Lawn. Coverage in Orlando extends north to Sanford and Deltona, south to Kissimmee, as well as eastern and western suburbs such as Clermont, Winter Garden and Winter Park. New coverage also includes additional areas in Brooklyn and Queens in New York City, Northern New Jersey stretching from Newark to Paterson and beyond, and additional locations in the downtown area of Philadelphia.

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Supervalu announces Q2 results

BY David Salazar

MINNEAPOLIS — Supervalu on Wednesday announced its earnings for Q2 of FY2016. The company’s net sales were $4.06 billion, up only slightly (0.5%) from $4.04 billion in the same quarter last year.

Despite slight trouble in its different segments, Supervalu’s gross profit was 14.4% of its net sales ($583 million), a slight increase over its 14.2% profit in the same quarter last year. The company attributes this increase to higher margins in each segment, lower logistical costs and fees earned under transition service agreements.

The company saw a 1.6% decrease in same-store sales among Save-A-Lot stores and its same-store sales, though corporate Save-A-Lot stores saw a 0.9% increase in same-store sales. Despite the drop in same-store sales, net sales for Save-A-Lot rose 3.2% as the result of new store openings.

In the Independent Business segment, net sales were $1.83 billion, a slight decrease from last year’s $1.84 billion, which the company attributes to lower sales and lost stores. Operating earnings in the Independent Business segment were $2.7 percent of net sales ($49 million), a decline over last year that the company attributed to employee costs from new businesses.

The company’s Retail Food segment dropped 3.3% in same-store sales and fell 1.2% in net sales. Earnings were 0.9% of sales ($10 million) — about half of the net sales in the same quarter last year. High employee-related costs and higher shrink expenses are the cause, according to Supervalu.

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Report: Hologram house calls may be on the horizon

BY DSN STAFF

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