Hello GrocerTalk listeners,
Well, Chris Walton is back a little earlier than expected.
Our scheduled guest unfortunately fell ill, so Chris stepped in at the last minute, fresh off life on the road and with some admittedly tough shoes to fill after Jordan Berke joined us last week. But we put him straight to work.
And there was plenty to talk about. Costco keeps growing, Morrisons is experimenting with Click & Collect lockers, Kroger gave us a loyalty story and a 24-hour store story, and TCC Global’s Seb Hill joins us from Groceryshop for Five Insightful Minutes.
Through all of it, one question kept coming up: what does real grocery loyalty look like now, and how might that change when AI agents start making more of the shopping decisions?
Here’s what caught my attention this week.
Costco’s Growth Machine Keeps Going
We started with Costco’s Q4 results, where comparable sales excluding fuel jumped 7.2%, while fresh food continued to perform well, led by bakery and meat. (Source)
The numbers are impressive, but Costco is particularly interesting through the lens of loyalty. This is a retailer where shoppers pay for the right to shop, and renewal rates remain incredibly strong. At the same time, membership growth has slowed, giving us at least one number worth watching.
Chris also pointed to where Costco is gaining share. New households are increasingly coming from Gen Z and lower-income shoppers, two groups that haven’t traditionally been Costco’s sweet spot. When consumers are under pressure, Costco’s combination of value, gas savings and membership economics becomes pretty hard to ignore.
Can Lockers Take Some Pressure Off Morrisons Stores?
Next up, Morrisons is piloting StrongPoint’s multi-temperature Click & Collect lockers at its Skipton store, allowing customers to pick up ambient, chilled and frozen orders using a six-digit code. (Source)
This one builds directly on our conversation last week about the operational pressure ecommerce can put on stores. Chris likes the model because it creates more slack for store teams, giving them wider windows to pick and stage orders rather than having everything dictated by the exact moment a customer arrives.
For me, delivery drivers could be another particularly interesting use case. The more ecommerce volume flowing through stores, the more important it becomes to find ways to protect the everyday store operation.
What Happens to Loyalty When AI Agents Start Shopping?
That brought us back to the Groceryshop show floor, where TCC Global Chief Marketing Officer Seb Hill joined me for Five Insightful Minutes.
TCC Global has been researching what agentic AI could mean for grocery, and Seb raised a pretty fundamental question: what happens to loyalty when the shopper isn’t necessarily the one making every shopping decision? (Source)
Retailers have spent years building loyalty programs around points, apps, offers and purchase behavior. But if AI agents increasingly optimize decisions around things like price and convenience, retailers may need to think much harder about what makes a shopper genuinely loyal and how they measure the strength of that relationship.
Kroger Is Also Going Back to 24/7
And because one Kroger story apparently wasn’t enough, the retailer is also testing a return to 24-hour operations at six stores, including one Cincinnati location and five in Indiana. (Source)
Chris sees a pretty straightforward reason for the test: comp growth. If Kroger has locations where historical shopping patterns suggest overnight demand can be served profitably, it makes sense to test it.
But running a store around the clock adds complexity. Staffing gets harder, security becomes a bigger consideration, and stores lose some of the downtime used to reset and replenish. The test is whether the additional traffic can outweigh those challenges.
Then We Got to GrocerTalk Grab & Go
Chris somehow managed to complete a Kroger hat trick, highlighting new work around predictive creative scoring that found ecommerce conversion could be forecast with 81% accuracy before campaigns go live. He also highlighted Walmart’s continued drone expansion, with 30-minute delivery coming to the Seattle and Denver metro areas.
I went back to Walmart and its plans to take Shop to Light nationwide before the holidays. And, because we can’t spend an entire episode talking about AI agents, loyalty and store operations, I wrapped things up with the return of Trader Joe’s Trick-or-Treat mini canvas totes.
Yes, the tote bag mania is back.
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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.