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Peapod Ramps Up Value Offerings

Peapod has unveiled a slate of new initiatives designed to boost its value image and build larger orders, including a round of everyday retail price reductions, new offers on bundled items and stock-ups, and a less expensive delivery subscription option.

“When planning the reductions, we began with one important question: What do our customers care about the most? It sounds simple, but we wanted to ensure we are giving our customers exactly what they want at the value they expect,” said Spencer Baird, Peapod's SVP of merchandising, in a statement. “Initial feedback has shown shoppers are very happy with the new value Peapod is delivering.”

The new offerings come as Peapod fights to regain growth momentum amid a wave of online competition, including more grocers offering click-and-collect and delivery options. Though the company posted U.S. sales of around $1 billion last year, officials of parent Ahold Delhaize in late 2017 said increasing competition in the space had slowed its relative growth, and that it would reinvest in the offering this year.

Since then, Peapod has debuted a text-to-order service, a new line of meal kits and integration with meal planner Dinner Daily. Last year, it debuted voice ordering through Amazon’s Alexa device.

Peapod's competitive new pricing includes “thousands” of lower prices on products that matter most to customers such as natural and organic items, meat, fresh produce and dairy. On these everyday price changes, customers will see the old price slashed with the new lower price. On many of these items, customers will also see flags indicating additional savings via weekly promotions.

The Bundles of Savings program offers discounts on groups of products that are commonly bought together. Peapod said it mined its transaction data to understand which products are typically bought together, and then created easy-to-shop bundles such as free bananas with the purchase of cereal and milk, $4 off three healthy snacks, or deals built around multi-ingredient recipes such as tacos and pasta.

For shoppers that always stock up on certain products, Peapod has introduced Buy More Save More categories on items such as berries, eggs and frozen vegetables, offering customers discounts when buying multiple items in the category. “These types of bulk-buying discounts aren't typically offered by traditional grocers and are an opportunity for customers to create their own custom club packs,” Peapod said.

Peapod is also offering a discounted version of its PodPass delivery subscription to incentivize shoppers to receive midweek deliveries only. PodPass MidWeek is less than half the price of the regular subscription and offers a year of deliveries on Tuesday, Wednesday or Thursday for $55.

“This is just the beginning for us,” Baird said. “We'll be lowering prices and offering additional special promotions throughout 2018 based on seasonal purchasing and priority products. We want to keep delighting our customers every time they shop. Customers should know our commitment to value is permanent.”

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