Grocery industry braces for change
Even before Amazon’s announcement, Dayton region options grew.
Amazon’s pending purchase of Whole Foods has waged a full-out war between grocers — signifying an upcoming transformation of the grocery shopping game in major markets across the U.S., including southwest Ohio.
With Amazon.com’s pending $13.7 billion purchase of Austin-based Whole Foods Market,
consumers in Southwest Ohio are seeing a deluge of new online grocery offerings pop up from chains like Kroger, Meijer, Walmart and Dorothy Lane Market. In just the past year, service options like Amazon Fresh, Shipt, Instacart and Kroger Clicklist have launched in most ZIP codes in the Dayton, Cincinnati and Springfield regions.
“I think Amazon is providing us with some stiff competition in this area, and other traditional online shopping,” said Kristin Mullins, president and CEO of the Ohio Grocers Association. “The grocers are really trying to move to more convenient ways
to shop. They are trying to think about how consumers want to get their groceries these days, and what’s the best and most effective way for them to get it to them.”
What’s driving the fastpaced shift to online shopping in the grocery industry? Consumer studies show consumer trends that are dismantling the retail industry are now seeping through to the way people want to buy their groceries — shoppers want convenience, quickness and quality above all else.
Online grocery shopping is making major gains, according to the Food Marketing Institute’s U.S. Grocery Shopper Trends 2017 report. The number of shoppers buying some of their groceries online jumped to 11 percent in the first quarter compared to 5 percent in 2016, according to the report.
The supermarkets and grocery industry have a major impact on local economies, and brought in $612 billion in revenue nationwide last year. More than 2.6 million people were employed by the industry in 2016 as well.
Once the acquisition is complete, online retail giant Amazon will own all 466 Whole Foods stores, poising a potential threat for locally owned mom-and-pop shops. Whole Foods has one location in Centerville located at 1050 Miamisburg-Centerville Road, and another store in Mason at 5805 Deerfield Blvd. Whole Foods also has several locations in Columbus, and surrounding suburban areas.
“This partnership presents an opportunity to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers,” John Mackey, Whole Foods Market co-founder and CEO, said in a statement.
A spokeswoman for Whole Foods told this newspaper it was too early to predict how Amazon’s purchase of Whole Foods would impact local stores and its services to customers in Ohio. Still, the grocery chain’s commitment to healthy and organic options will remain the same.
“We believe that many people in Dayton care about where their food comes from, what’s in it, how it was raised, who raised it, how workers were treated and its impact on the planet, so they feel good about shopping with us because they know we are committed to offering the highest quality products that are ethically sourced. They value our transparency,” a spokeswoman said in an email.
Whole Foods isn’t the only chain transforming shopping for local customers. Meijer introduced home delivery services in Dayton and Cincinnati back in April, resulting in the creation of 1,000 jobs for the area. Michigan-based Meijer partnered with Shipt, an app and website that offers grocery delivery services. It allows customers the ability to shop for items online or using its mobile app, and then a personal shopper brings the shopping order right to the customers door.
“Now customers can shop a complete grocery list online, having access to our world class assortment of fresh produce, meat, dairy and a number of other essentials that Shipt will hand select from a local Meijer store and deliver to a customer’s doorstep,” said Rick Keyes, president and CEO, in a statement.
Instacart, an online grocery shopping service, launched in the Dayton region back in May — offering unlimited delivery, where customers can get their groceries delivered to their door within an hour. The services range from $99 annually, or $14.99 per month.
Kroger, which employs at least 8,100 associates in the Dayton region, just opened its newest store at the Cornerstone of Centerville development. The 115,000-squarefoot store was built with today’s consumer in mind — a “destination” experience for consumers. Shoppers can stop and relax for a glass of wine or pint of beer, grab a slice of hot pizza or a plate of sushi, and continue on with their shopping.
“It’s got everything from groceries to Murray’s Cheese. We’ve got Starbucks, a bistro, Asian fusian food, street Thai, a taco bar,” said Steve Weyrich, Kroger’s store manager. “It’s a great place to shop. I think they’re going to enjoy it. I’m also a member of this community, so I know a lot of customers and we’re just proud to be here.”
Kroger also expanded ClickList, its online shopping service, to nearly all locations in the region. Customers have the ability to go online and order from more than 40,000 items. With reserved pickup parking, Kroger associates bring the grocery order to the car.
Though it’s unclear now how Amazon’s purchase of Whole Foods will impact the competition between other grocers, Kroger CEO Rodney McMullen isn’t afraid of the rapidly changing industry — calling Amazon’s purchase a “good fit.”
“The [Amazon-Whole Foods] deal didn’t surprise me,” McMullen said in an interview with CNBC. “I think the retail industry is in constant change. We’ve been saying that for years.”