Hello GrocerTalk listeners,
Some weeks there’s one big story that dominates the conversation.
And then there are weeks like this one.
A few seemingly unrelated headlines start to add up. Strong results from Dollar Tree and Dollar General. More Americans struggling to afford food. Signs that lower-income shoppers may be changing how they spend, even at Walmart.
On their own, each story is interesting. Put them together, though, and you start to wonder whether they are telling us something bigger about the state of the US consumer.
That was where we started this week’s GrocerTalk.
To help me unpack that question, along with everything else happening across global grocery retail, I was joined by Stewart Samuel, Director of Retail Futures at IGD and one of the sharpest grocery retail analysts in the business.
Stewart was at the very top of my list when I started thinking about potential GrocerTalk co-hosts. I’ve known and worked with him for a long time, and not only is he an exceptional analyst, he’s also one of the nicest people in our industry.
Together, we unpacked everything from the increasingly polarized US consumer and BJ’s plans to cut 20% of its SKUs to Target’s beauty ambitions, Aldi’s e-commerce economics and what Sam’s Club can learn from Walmart.
Here’s what caught our attention.
Is the US Consumer Finally Starting to Feel It?
We started with a collection of stories that seemed to point toward a bigger shift in grocery behavior. Dollar Tree and Dollar General are reporting strong numbers, more Americans are struggling to afford food, and there are signs that lower-income shoppers may be changing how they spend, even at Walmart. But Stewart’s first point was an important one: it’s becoming increasingly difficult to talk about the US consumer as though there is only one.
What we’re seeing instead is growing polarization. Lower-income households are under pressure, but Stewart also warned against confusing store weakness with consumer weakness. Some of those shoppers may simply be moving online rather than disappearing altogether. For retailers, the challenge is understanding exactly which consumer they’re trying to serve and remembering that value today means much more than simply price.
BJ’s Can Cut the SKUs. But What Can’t It Afford to Lose?
Next up was BJ’s Wholesale Club and its plans to reduce its SKU count by around 20%. On paper, it makes perfect sense. Fewer SKUs can mean less duplication, better availability and stronger buying power. But there is a fine line between becoming more efficient and cutting away what makes your proposition different.
BJ’s has historically offered a broader assortment and more supermarket-style pack sizes than some of its competitors, and that differentiation matters, particularly as it expands into Texas and goes head-to-head with Costco and Sam’s Club. The challenge isn’t simply deciding what to cut. It’s making sure you don’t rationalize away the reason customers choose you in the first place.
Target’s Next Big Test Is the Merchants
Target’s new Beauty Studio concept gave us a chance to talk about what happens now that its partnership with Ulta has come to an end. Target may have more control over the category, but that also means the responsibility now sits squarely with its own merchants. Beauty moves quickly, trends emerge overnight and social media can turn an unknown product into the next must-have item.
That led to one of my favorite observations from Stewart: you could replace the word beauty with grocery. The challenge for Target in both categories is creating an experience built around discovery, newness and excitement. Target isn’t simply competing with other retailers. It’s competing with the speed of culture.
Aldi and the Cost of Doing Everything Yourself
We then turned to Aldi’s decision to shut down its grocery delivery business in Switzerland, and Stewart summed up the challenge perfectly. Aldi has one of the most efficient retail models in the world, while grocery delivery is one of the least efficient activities you can attach to it.
Aldi’s entire model is designed to remove costs, while delivery adds labor, fulfilment, vehicles and the last mile back into the equation. That doesn’t mean delivery doesn’t matter. It means retailers need to think carefully about which capabilities they should own and which they can leave to partners. The right answer isn’t necessarily the same in every market.
Can Walmart Help Sam’s Club Become More Sam’s Club?
Our final headline took us to Sam’s Club and Walmart’s Scintilla commerce intelligence platform. At first glance, bringing more Walmart technology into Sam’s Club might seem like another step toward making the two businesses more alike. Stewart saw it differently.
Sam’s Club doesn’t necessarily need to be different behind the scenes. It needs to be different where the member sees and experiences the proposition. Sharing technology and infrastructure could actually give Sam’s Club more room to focus on what makes the membership experience unique. As Stewart put it, this could make Sam’s Club more like Sam’s Club and less like Walmart.
Then We Got to Grab & Go
Before wrapping up, Stewart brought Tesco’s expanded work with Simbe Robotics to the table. But the bigger opportunity isn’t just the robot. It’s what happens when Tesco starts connecting robotics with electronic shelf labels, automation and the rest of its technology investments. The individual pieces are interesting. The ecosystem is where things could become much more powerful.
I then brought the conversation back to the consumer with Erewhon’s continued expansion, providing a very different perspective from where we started the show. At the beginning, we were talking about consumers under financial pressure. By the end, we were talking about a premium grocer continuing to grow. The K-shaped economy is clearly still with us.
And finally, Stewart took us to Vancouver, where Safeway is experimenting with a concept designed around the local multicultural community. The store is still recognizably Safeway, but the assortment is tailored to the people who actually live there. Which might be the perfect way to end this week’s episode: the best retailers don’t necessarily need to do everything differently. They just need to understand what makes them different and who they’re doing it for.
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Be careful out there,
Ben and the entire Omni Talk Team
Music by hooksounds.com.
Omni Talk® is the retail blog for retailers, written by retailers. Chris Walton founded Omni Talk® in 2017 and have quickly turned it into one of the fastest growing blogs in retail.