Despite its many advantages—good locations in dense and wealthy Northeast markets where it possesses leading share and has long been ahead of industry trends such as e-commerce, fresh and private label—it’s been a bit of puzzle that Stop & Shop has been a relative laggard in the Ahold Delhaize portfolio.
That, however, could change if the company’s new branding initiative succeeds as executives hope it will.
The strategy, rolled out last month in 21 stores in the Hartford, Conn., market, is rooted in a comprehensive response to its customers' changing needs—primarily a need for convenience, health, personalization and value along every step of the shopping journey—and is reflected in a radical new look and feel for the Hartford stores.
Mark McGowan, Stop & Shop’s president, says customers are responding strongly to the changes, and that interpretations of it would roll through all of Stop & Shop’s 416 stores over the next five years, starting with a new batch in Long Island, N.Y., next spring.
As part of the retailer’s Capital Market Day events, WGB visited newly renovated units in South Windsor and Windsor, Conn.
Addressing a deficit
“The customer absolutely associates us with fresh food, but we were well undeveloped in prepared foods,” McGowan told WGB during a store tour. “When we did our research, we saw our customers were asking for this, and we didn’t just ask our customers—we talked to customers across our trade area to really understand why the people who weren’t shopping with us weren't shopping with us. Why were they going someplace else?”
In the beer aisle, this large touchscreen helps customers find a beer to match the meal they have in mind, or perhaps the other way around. Mark Messier, Stop & Shop's EVP of merchandising, demonstrates the screen here. He said both merchants and vendors contributed input to its suggestions, which are designed around a wider variety of brands than were previously available. Craft enthusiasts can also find beer brewing equipment now.
Meal kit on a shelf
“We made price investments and departmental changes in the past,” McGowan said, “but it’s been a long time that we’ve done something new in center store. But that’s a real journey between the assortment and the layout and everything we need to do.”
Among the new twists in South Windsor was this refrigerated case in the pasta aisle containing all the ingredients for making a pizza at home. This provides ease and shopping and inspiration for shoppers whose busy lives leave them little time to plan meals. Similar displays highlight tacos and snacks.
New price investments
While the value proposition encompasses ease of shopping and quality, price matters. Officials say the renovated stores made a significant price investment along with the new look, and made that evident to shoppers in new price signs calling out the reductions.
This isn't the paper goods aisle anymore
In Windsor, about 12,000 square feet of what used to be a 60,000-square-foot store has been given over to Takeoff Technologies, which placed a mini fulfillment center to serve online orders through Peapod. Using robotic equipment licensed from Knapp, the unit autonomously stocks, receives and assembles products for online orders. It is expected to go online in January.
Speed and relibaility
Takeoff CEO Jose Aguerrevere gave a demonstration of the unit, saying items could be picked every six seconds—a rate about 20 times faster than the alternative of a store employee shopping the store. That could greatly reduce pick costs that come along with click-and-collect and delivery orders, while providing a local base for staging local deliveries, saving on the last mile.