BrainTrust Predictions 2016: Broadlines/Grocers
Among broadline chains, Target is expected to see further recovery this year through its efforts to further distance itself from Walmart and recapture some of its cheap-chic reputation, according to a poll of RetailWire BrainTrust panelists exploring 2016 prospects.
Wrote Paula Rosenblum, managing partner, RSR Research, “So far, I think Brian Cornell has made all the right moves, and everything from product to marketing are back in the groove.”
Added Arie Shpanya, executive chairman, Wiser, “Target has improved their brand value by offering stylish items at competitive prices. They’ve mastered omnichannel retail with their Cartwheel app, and they understand that e-commerce’s share of the retail market is growing quickly.”
Mr. Shpanya also felt Walmart would recoup its investments in e-commerce and employee wages. He added, “They’ve also announced their own payment platform to rival Apple Pay, so they’re not losing focus of their brick and mortar channels either.”
Ms. Rosenblum was more cautious on Walmart, believing its target market is largely saturated and that the company is facing newer competition from dollar stores, fast-fashion chains and a resurgent J.C. Penney. She said, “I think the company’s best bet would be to stop opening stores and focus on keeping its core customers and solidifying its basket sizes, but management doesn’t seem have the will to do so.”
In the grocery space, Kroger, H-E-B and Aldi were highlighted as likely outperformers in 2016.
Keith Anderson, VP, strategy & insight, Profitero, said Kroger and H-E-B have both “been disciplined in following the strategies that have carried them over the last 20 years and show signs of careful openness to new ideas to position them for the next generation of shoppers.”
Ben Ball, SVP, Dechert-Hampe, believes Kroger will continue to benefit from continued smart acquisition selection and steady management as well as good fundamentals. He also thinks Aldi’s geographic expansion and tests of their expanded category format will both be winners. Ball is less certain about Albertsons, believing their merger integration “will be an ongoing headache.”
Ron Margulis, managing director, RAM Communications, sees ShopRite/Wakefern “already winning customers from the A&P/Pathmark debacle and will likely keep them in 2016 and beyond, proving it’s important to be good and better to be lucky, but best to be both.”
Which grocers and broadline retailers do you expect to outperform their segment in 2016? Why? What factors will be most critical to achieving success?