Dive Brief:
- Ahold Delhaize has launched two new, fresh-focused store concepts under its Stop & Shop and Giant banners. Stop & Shop will open 21 updated stores in the Hartford, Connecticut, area on Friday, and Giant Food Stores is introducing a new brand of urban neighborhood markets called Giant Heirloom Market, beginning with a pilot store in Philadelphia.
- The Stop & Shop stores in Connecticut received a $70 million investment from Ahold Delhaize to improve the in-store experience and lower prices. The revamped locations include an expanded assortment of fresh foods, a selection of meats smoked in-house, poke bowl and taqueria stations and a “frictionless” checkout experience through the retailer's Scan It! mobile app. There will also be a pickup area for customers who purchase groceries online through Peapod. The company noted the remodels will produce a 7% increase in headcount at its stores.
- In Philadelphia, construction of the 9,500 square-foot Giant Heirloom Market is underway, and when completed it will offer products from local producers, artisanal bread, food sampling and cooking demonstrations. The market will also focus on offering seasonal, fresh foods, and will feature a Produce Chef to prepare fruits and vegetables on demand.
Dive Insight:
The news of stores upgrading, remodeling and launching new concepts is nearly constant these days. With the growth of e-commerce, fierce competition from retail giants and deeper interest from consumers in where and how their food is made, changes to the traditional grocery model are in full effect.
Both Stop & Shop and Giant are emphasizing the importance of an improved in-store experience and a wider range of fresh, local foods with these new and upgraded stores. The updates are similar to — and in some cases a response to — updates being made by other grocers, including Aldi, Southeastern Grocers and Albertsons.
It will be interesting to see each store concept play out. Stop & Shop is doing a mass reveal with 21 stores on the same day and will reach thousands of customers, while Giant is still building its first Heirloom market and will have a much smaller impact to start. This gives Giant the chance to gauge Heirloom’s success before making further investment, in contrast to Stop & Shop, which has millions of dollars on the line if the concept doesn’t generate the expected response.
Still, considering Stop & Shop has more than 400 stores across the northeast, its Hartford revamp still counts as a test. In its announcement, the company said the new stores will help inform operations across the broader chain in the months and years to come.
Ahold Delhaize has been hard at work elsewhere. In May, the company announced that 105 Food Lion stores would be remodeled in the Norfolk, Virginia area — the latest step in its chain-wide "Fresh, Easy and Affordable" remodeling campaign that began four years ago. While the Food Lion updates emphasize creation of an easier shopper experience and better customer service, they also encompasses expanded local, organic and fresh food offerings as well as unique features such as a wing bar and handmade pizza. Ahold Delhaize officials have credited the updates with improved performance at Food Lion stores.
Thanks to its large presence, Ahold Delhaize has the ability to test different features at various retail brands and utilize that insight to make successful changes throughout all of its stores. Giant Heirloom Market seems to be the next iteration of Bfresh markets, which Ahold Delhaize closed down late last year. While it’s unclear why those stores were shut down, the company has likely applied lessons learned as it prepares to open the Heirloom concept.
The new Stop & Shop and Giant concepts signify a strategic investment from Ahold Delhaize, which operates more than 2,100 stores and distribution centers in 23 states throughout the U.S. The company has a large footprint and a seasoned team of executives, but as a traditional grocery operator, it knows it needs to move fast and invest deeply in order to overcome a multitude of competitive challenges.
