Dive Brief:
- Weis Markets announced the expansion of its pickup and delivery service Weis 2 Go to 61 additional stores, according to a press release. The service is now offered in 150 stores across seven states.
- Each order is picked by the company’s personal shoppers and stored until pickup. Customers then pay for their order using PayPal or at the store during curbside checkout. Curbside pickup usually costs $4.95, but the fee is being waived for a limited time.
- Customers can also choose grocery delivery on the Weis app or online, which will be fulfilled by Shipt. Weis allows customers to use their loyalty cards to earn points, and accepts paper and digital coupons for online orders as well.
Dive Insight:
Weis' expansion of its pickup and delivery service ties directly to its plan to invest $109 million to remodel stores, improve supply chain logistics and add technology this year. These e-commerce investments have been ongoing for Weis since it announced a $101 million growth initiative in 2018, and have helped the company improve profits and boost online sales.
Grocery click-and-collect services could make up $35 billion in grocery sales by next year, according to a report from Cowen & Co. cited by Bloomberg. Jeff Sylvester, a senior analyst at Foresee, told Reuters that its popularity lies in the fact that it combines the benefits of digital shopping with the instant gratification of buying in-store.
Rapid expansion isn't uncommon among regional grocers who are trying to keep up with the big players like Walmart and Amazon. Most recently, Giant Food added pickup to locations in Washington, D.C., Maryland, Virginia and Delaware. In June, Food Lion launched a new one-hour pickup program called Food Lion To-Go in a few locations across The Carolinas and Virginia. Wegmans and Stop & Shop also recently expanded their curbside delivery offerings.
Although Weis' curbside fee is waived for now and always waived for orders over $100, the $4.95 per-order charge could eventually deter customers from using its service. If the regional grocer wants to stand out from its competitors and pickup leader Walmart, whose service is free, it may need to lower the fee or trial other incentives like a subscription program.
High prices aren’t out of the norm for Weis. The retailer faced backlash late last year from short seller Spruce Point Capital Management, which claimed the grocer's prices were too high and that the retailer was losing customers and using "aggressive accounting changes" to boost financials. Since then, Weis has drastically reduced prices across 7,000 products as a part of its new Low, Low Price program and has updated its Preferred Shopper Loyalty Program.
