MMR: Mass Market Retailers, June 24, 2019

VOLUME 36 NO 7 WWW MASSMARKETRETAILERS COM JUNE 24 2019 INDUSTRY NEWS Walmart hires two tech executives page 16 Mass retailings most influential women page 17 Insurgent brands create unique offerings page 70 Challenges of winning with on shelf availability IRI report page 94 DOLLAR GENERAL SALES Dollar General Corp said net sales increased 83 to 66 billion in its first quarter Samestore sales increased 38 in the 13 weeks ended May 3 as shoppers spent more on seasonal products home goods and food items Operating profit rose 45 to 5122 million The company opened 240 new stores in the quarter and updated 330 stores Dollar General ended its fiscal first quarter with 15597 stores in 44 states BIG Y TOBACCO ITEMS Big Y Foods Inc has said customers under the age of 21 will no longer be able to buy tobacco products at any Big Y World Class Market or supermarket Fresh Acres Market Table Vine or Big Y Express Fuel Convenience locations Big Y said it will be raising the minimum age to buy any tobacco products in all of its 80 locations Currently e cigarettes and vaping products are only sold in Big Ys convenience stores and not in any supermarkets NACDS TSE SPEAKER Attendees at the 2019 NACDS Total Store Expo will hear from former Secretary of State and five term U S Senator John Kerry at the Sunday Business Program In his more than three decades of public service Kerry is one of the most iconic political figures from Massachusetts which will host the NACDS TSE this year He will speak on Sunday August 25 The NACDS TSE will run from August 24 through August 26 in Boston LOOP PILOT PROGRAM Kroger Co and Walgreens are the latest companies to join in an experimental shopping system named Loop that aims to lessen the worlds reliance on single use packaging In the pilot program shoppers purchase a variety of commonly used products from leading consumer brands in customized brand specific durable packaging that is delivered in a specially designed reusable shipping tote Once the product is consumed the packaging is collected cleaned refilled and reused creating a circular shopping system that cuts down on waste The content if recoverable also will be either recycled or reused Dollar Tree Tests Change In Strategy CHESAPEAKE Va Dollar Tree Inc last month began adding items costing more than a dollar at select Dollar Tree stores as it weighs whether to revise its commitment to a single price point The multi price point merchandise is being displayed in sections branded as Dollar Tree Plus to clearly differentiate it from the stores 1 assortment This carefully considered test leveraging the merchandising strength and purchasing power of Family Dollar is designed to understand how Dollar Trees deeply loyal customers respond to the addition of merchandise at values greater than 1 the company said last month in a news release summarizing financial results for the first quarter of fiscal 2019 With its Everythings a Dollar model Dollar Tree has remained one of the most unique differentiated and defensible brand concepts in all of value retail commented Dollar Tree president and chief executive officer Gary Philbin in the release However we have always been a test and learn organization that is committed to evaluating all opportunities to deliver great value for our customers while driving long term value creation During this test we look forward to measuring and assessing the initial results and understanding if the introduction of multiple price points across a broader set of stores is in the best interests of our customers company and shareholders Dollar Tree executives said the initial test phase will be ex CVS Builds New Health Care Model WOONSOCKET R I The executive team of CVS Health outlined a series of transformation initiatives at its 2019 Investor Day event earlier this month showing how the company plans to accelerate enterprise growth simplify a consumer health system that is confusing and inconvenient and position the company for longterm growth and increased shareholder value The company also provided greater insight into nearand long term earnings potential Our goal is to fundamentally transform the consumer health experience for the millions of Americans we interact with every day while creating value for our patients members partners and shareholders said CVS Health president and chief executive officer Larry Merlo We have combined with Aetna to build a powerful and unique business model that will guide our journey to becoming the most consumercentric health company Merlo added that CVS Health is dedicated to putting consumers at the center of its strategy and helping them achieve their best health by strengthening health care locally and making it simpler to use and understand The CVS Health management team said that it is focused on growing and differentiating CVS Healths businesses with a focus on driving engagement through personalization winning in highgrowth products and services and delivering new and innovative benefit designs and reimbursement models One of the major announcements the drug chain made was that it will open 1500 HealthHUB stores by the end of 2021 CVS opened its first three HealthHUB locations in Houston in February It said it plans to open more in Houston Atlanta Philadelphia southern New Jersey and Tampa Fla by the end of the year Were pleased with the customer feedback weve received on the HealthHUBs said CVS Pharmacy president Kevin Hourican He pointed out that these stores have seen higher traffic in the MinuteClinics increased sales in the front of the store and more prescription volume Hourican explained that the Walmart Innovates FAYETTEVILLE Ark Walmart is launching a new service this fall that will allow customers to get groceries delivered right into their refrigerators Walmart p r e s i d e n t and chief executive officer Doug McMillon announced the service called InHome Delivery during the companys annual shareholders meeting here Whats the one thing busy families cant buy at Walmart McMillon asked Time Or is it Lately our associates have been solving problems that enable our customers to kind of buy time by shopping with us A great example is our grocery pickup and delivery capabilities and today we announced the next phase in that journey We asked ourselves What if we cover not only the last mile to customers homes but even the last few steps What if we put their groceries away inside their kitchens or garages And a step beyond that what if they let us keep them replenished keep them in stock on the items they use all the time The way the new service will work is that customers will place their grocery orders online and then select InHome Delivery and a delivery day during the checkout process Delivery will be made by an associate wearing a proprietary wearable camera who will use smart entry technology to get access to the customers home The customer is notified when we arrive at their home McMillon said Customers can watch a live first person view of their delivery or a recording of it later The InHome Delivery service will be available this fall to nearly one million customers across three cities Kansas City Pittsburgh and Vero Beach Fla McMillon cited InHome Delivery as the kind of innovation that will help Walmart win with customers in the future If I oversimplify our ability to thrive in the future it comes down to one thing our ability to solve problems together well enough and fast enough he said Another theme of the annual shareholders meeting was a celebration of the companys Retail Sales Reflect Robust Economy WASHINGTON U S retail sales increased 05 in May seasonally adjusted from April and were up 32 unadjusted year over year according to the National Retail Federation Mays retail sales increases were broad based with every category except food and beverage stores showing a gain from April NRF said The numbers exclude sales at automobile dealers gasoline stations and restaurants Revisions to April monthly data were significant NRF said with retail sales reversing a loss of 02 to a gain of 03 Todays retail numbers and upward revisions to prior months reinforce the ongoing strength of the consumer and are consistent with a pick up in the pace of the economy in the coming months said Jack Kleinhenz chief economist at NRF The strong job market recent income gains and elevated confidence translates into ongoing support for spending Households in the aggregate are in solid financial condition but an escalation in trade tariffs will undoubtedly create a considerable downdraft to confidence and spending or lead to a pullback in spending NRF characterized recent retail sales data as unusually SPOTLIGHT To page 2 To page 4 To page 4 To page 4 McMillon Today we announced the next phase in that journey MMR IRI HBC Category Performance Review Page 73