Welcome to The Week in Retail, a weekly round-up for marketers from Quad Insights that covers the latest must-know news surrounding the retail space.
Walmart and other value chains report higher-than-expected growth in Q2
A sign of consumers’ growing desire for value as inflation lingers, Walmart on Thursday reported a 53% year-over-year increase in profits in Q2, for a total of $7.9 billion, according to the company’s latest earnings release. “[Walmart] said it continued to observe budget-conscious shoppers seeking relief from persistent inflation across the broader economy,” reports Financial Times’ Steve Chávez, “but indicated that its ‘value proposition’ was still resonating with customers — including high-income ones — and propelling sales.” This was further evidenced by a 2.8% increase in foot traffic and a 3.4% higher average ticket, as well as a 24% year-over-year jump in U.S. e-commerce sales, as reported by the retail giant.
As Walmart and other value chains like TJX Cos. — owner of T.J. Maxx, Marshalls and Home Goods — announced higher Q2 earnings this week, Target and Home Depot reported declines. As CNN’s Nathaniel Meyersohn notes,“Shoppers have pulled back from these chains on discretionary purchases as they face pressure from higher prices and borrowing costs.”
• “Walmart earnings smash expectations after weaker second quarter from Target” (Yahoo Finance)
• “Shoppers are spending big at T.J. Maxx, Home Goods as Target sales slide” (CNBC)
Dollar General expands fresh produce offering to 5,000 stores
Dollar General announced plans this week to expand its fresh produce offering to an additional 5,000 stores by January, with an even more aggressive goal of 10,000 stores over the next few years. The value store chain currently sells fresh fruits and vegetables at 3,900 of its more than 19,000 stores across 47 states and Mexico.
This expansion will give Dollar General more individual points of produce distribution than any other U.S. mass retailer or grocer, according to the company. As Retail Leader’s Elizabeth Christenson notes, “A meaningful number of the new stores to offer produce will be in current U.S. Department of Agriculture defined food deserts.”
• “Dollar General set to build massive distribution center in Arkansas” (Supermarket News)
Female CEOs lose ground in retail while women continue to drive purchasing decisions
At the 86 retail companies that are part of the Fortune 1000, only 13 are headed by women as of July 2023, according to executive recruiting firm Heidrick & Struggles, per an article published on Monday by The New York Times; this number is down slightly from 2022. In recent months, CEO positions at several major retailers, including Gap, Kohl’s, Stitch Fix, Victoria’s Secret and others, that had previously been filled by women have been assumed by men, while other retailers, such as Macy’s and VF Corp, have replaced men with men.
Despite an upward trend in the number of female CEOs in recent years — with the number of women-led Fortune 500 companies doubling in the past five years, according to Retail Insight Network — roughly 90% of these companies are still currently run by men. Yet, as Jordyn Holman of The New York Times notes, “Retail executives have long been quick to note that purchases are largely driven by women, who make most of the spending decisions for their households. The majority of the industry’s entry-level work force is also female.”
• “How 2023 solidified the market power of women” (The Week)
Aldi expands its footprint in the Southeast with purchase of 400 Winn-Dixie and Harvey Supermarkets
In a move designed to build on its growing presence in the Southeast, discount grocer Aldi announced plans this week to acquire 400 Winn-Dixie and Harveys Supermarkets across five states from Southeastern Grocers Inc. for an undisclosed amount. If approved by regulators, the all-cash deal between the two private companies is expected to close in the first half of 2024.
Headquartered in Batavia, Illinois, the German-based grocer plans to convert some of the newly acquired stores to Aldi brand — adding 120 stores by the end of the year, for a total of 2,400 — while others will continue to operate as-is. “Operating these stores would represent a departure from Aldi’s time-tested model,” Grocery Dive’s Sam Silverstein notes, “and its decision to enter that segment of the industry suggests it plans to leverage multiple store formats to help fuel its growth.”
• “German Supermarket Chain Aldi Buying 400 U.S. Stores — Expanding Billionaire Family’s Discount Grocery Empire” (Forbes)
• “Winn-Dixie parent company shutting down, selling stores to Aldi” (Jacksonville Business Journal)
• “July retail sales surprise to upside in latest sign of resilient consumer” (Yahoo Finance)
• “Hy-Vee will now offer delivery via Uber Eats” (Supermarket News)
• “Petco Goes On-Demand on DoorDash, Expands App Features” (Store Brands)
• “Michaels Unveils Brand Refresh, New Tagline” (Total Retail)
• “Trader Joe’s confirms its stores will never include self-checkout” (Grocery Dive)
• “Bay Area-based Babylist opens first retail location in Beverly Hills” (L.A. Business First)
• “How Save Mart Is Gamifying Loyalty, Savings” (Progressive Grocer)