Kroger reportedly among Boxed suitors
Kroger could be the latest retailer to acquire an e-commerce company, with Forbes reporting that the Cincinnati-based company is among the companies looking to acquire online wholesaler Boxed. The report, citing sources close to the talks, said that Kroger’s initial offer could value Boxed for between $325 million and $500 million.
Forbes also reported that some of Kroger’s grocery competitors are also interested, though they hadn’t made formal offers as of Friday. Boxed was launched in 2013 and has been seen as an e-commerce version of such wholesale stores as Sam’s Club and Costco.
Kroger’s move would mean it would be following a similar tack as Target, which recently acquired online grocery company Shipt, and Walmart, which acquired Jet.com in late 2016.
To read the full Forbes report, click here.
Analyst: Above average retail growth during 2018 predicted
At total level, year-over-year growth of 4% in December does not seem all that impressive. Indeed, it is a little way below the average monthly rate for 2017 and quite a bit below the 6.6% uplift recorded in November.
However, the figure is affected by weak sales of autos which were up by only 0.4% over the prior year. When this, and other non-core categories are removed, pure retail sales increased by 4.6%. This represents a significant increase over the average monthly 3.8% uplift for 2017 and puts December as the third best month for retail growth of the year.
Growth within retail was broad-based with most categories performing well. Home and furniture stores led the way with 7.5% growth over the prior year. Some of this is a consequence of a robust housing market, which continues to spur home spending, but some is also the result of more gifting of home products. Our consumer data showed that small home-related items like decor and accessories were one of the most popular gifting categories this holiday season.
Electronics, which has been relatively flat for most of 2017, ended the year with a flourish. The 5.7% growth rate the category enjoyed is largely thanks to a much better line up of consumer electronics products, including the latest iPhones and a host of new Amazon devices. Strong promotional activity, especially on products like home speakers, stimulated consumer interest and drove volume across many retailers.
Notably, both home and electronics are categories where individual items can be expensive. That they did well underlines the fact that consumer confidence across the period was very strong. Our weekly tracker shows consumers ended the year on a high for sentiment about their household finances and the economy in general. This was extremely helpful in driving trade over the holiday period.
Smaller ticket sectors like clothing did reasonably well, although growth of 1.1% puts the sector near the bottom of the holiday league table. Given that the cold weather was mostly helpful to retailers over December, the issue in apparel is that consumers are bored with offers that appear same and undifferentiated and so they are not driven to buy. This, in turn, leads to excessive discounting which reduces sales values and growth.
In keeping with its status across most of 2017, sporting goods remained a challenged part of the market with sales declining by 1.5% on a year-over-year basis. Except for Lululemon and a few other players, there was a lack of inspiration and excitement in the segment this holiday which made it easy for consumers already saturated with sports apparel and footwear to either shun making purchases or to do so at generalist players like department stores.
After a strong end to the year, all eyes now turn to 2018. From a confidence point of view, the year has started well with consumer optimism rising further. In our opinion, bonuses and raises which have come off the back of the tax cuts will likely support spending through the early months of the year. Growth may drop back from holiday levels but will remain above average.
Albertsons’ O Organics brand passes $1B mark
Albertsons has a successful own brand on its hands. The Boise, Idaho-based company this week announced that its O Organics brand of USDA-certified organic products had surpassed $1 billion in sales.
The product line includes more than 1,000 products, the company said, noting that in the past year, Albertsons has added roughly 200 new products and seen the line’s sales grow more than 15%. This year, Albertsons said it plans to add 500 or more products to the O Organics line, spanning such categories as snacks, deli and baby.
“We are passionate about offering great-tasting and high-quality products to the neighborhoods we serve,” Albertsons president of own brands Geoff White said. “Introducing new and certified organic products for every eating occasion is a great example of how we are constantly delivering and staying ahead of consumer trends.”
Albertsons launched the O Organics own brand in 2005, and it manufactures many of the line’s products, including yogurt, salsa, ice cream, milk, pasta sauce and sandwich bread. The line is just one of the company’s billion-dollar brands, with Albertsons reporting thtat its Signature Select, Signature Cafe and Lucerne own brands have all passed the $1 billion mark. The O Organics brand is the company’s top-selling organic brand.
“Everyone should have the opportunity to go organic – whether you are selectively choosing a few organic products or you have fully embraced eating organics,” White said. “That’s why we offer such a wide assortment of O Organics products, from fresh fruits and vegetables to wholesome dairy and meats, cereals, snacks and more. We are honored that customers love our O Organics, and have made it not only the top-selling organic brand in our stores, but also a $1 billion brand.”