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Egrocery sales down 1.2% to start 2023, repeat intent raises 'red flag'
Brick Meets Click found a big gap between ecommerce sales at mass retailers and grocery stores.
U.S. egrocery sales ticked down slightly to start the year.
Brick Meets Click and Mercatus provided the following data for January 2023:
Total egrocery sales were $8.4 billion, down 1.2% year-over-year.
Total user base for egrocery sales declined 1.6% for the year, as the number of 30-44-year-olds dropped 5%.
Order frequency also declined, continuing a long-term trend since May 2020.
Ship-to-home sales dropped 15%, driving the drop.
Pickup increased 3%, showing strong gains.
Online grocery sales totaled 12% of overall grocery sales.
US egrocery sales for January (Courtesy of Brick Meets Click/Mercatus)
Mass vs. grocery
In egrocery, the story continues to be the dichotomy between mass retailers such as Walmart and Kroger, and grocery stores such as Kroger.
In January, the mass category saw a 20% increase in monthly active users. Meanwhile, the grocery MAUs shrank by 6%.
Mass retailers offering price breaks are continuing to be an attractive option, especially as prices remain high amid inflation. Still, there is crossover, as about 3 in 10 households that shop at a mass retailer also shop at a grocery store.
Repeat intent rates were also down. The likelihood that a customer will use the same service within the next 30 days dipped by about two percentage points over the year to 60%. In a “troubling sign” BMC said that this was driven by frequent customers who typically spend more per order.
Grocery also trailed in this measure, recording the largest gap in repeat intent with mass since measurement began at 14%.
“This large gap in repeat intent is concerning and should raise a red flag for conventional grocers,” said David Bishop, partner at Brick Meets Click, in a statement. “While our monthly research didn’t examine the causes for the variations between Grocery and Mass, it could be associated with a number of variables, including product pricing, service-related costs, or differences in customer experience, so grocers may want to analyze what are the main culprits driving their respective rates lower.”
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Kellogg's takes inspiration from employees, Latin in snacks rebrand
Kellanova is now the parent of Pringles, Cheez-Its and Pop Tarts.
Kellogg Company's snacks business is now Kellanova. Here are a few finer points about how the forthcoming parent of Cheez-Its and and Pop-Tarts arrived at the new name.
Last year, Kellogg announced plans to split its business into multiple companies.
Now, one company will have North American cereals like Frosted Flakes, Froot Loops and Rice Krispies under the WK Kellogg Co banner.
Another will have snacks like Pringles, North American frozen foods such as Eggo and plant-based brands like MorningStar Farms.
This week, Kellogg announced that the snacks business has a new name: Kellanova.
Here are the strategies that Kellogg employed that led to this name:
- Ask the employees: Kellogg Company asked employees for input on the name, and received 4,000 suggestions from 1,000 employees.
- Listen to the results: 20% of the employees suggested a variation of the W.K. Kellogg name, while other employees suggested that the name include "nova."
- Go to the root: "Nova" comes from the Latin word for new. CEO Steve Cahillane said it "signals our ambition to continuously evolve as an innovative, next generation, global snacking powerhouse."
As The Wall Street Journal reports, this is just the latest new company name to take a Latin root in recent years, as Kellanova joins GE Vernova, Mondelez and Altria. It's also among a number of spinouts being completed by corporations, joining GSK spinoff Haleon, J&J's Kenvue and a forthcoming company that will spin out of 3M.
Even with a name that emphasizes moving forward, Kellanova is keeping one element that is familiar: The logo still has the iconic cursive K. It will even get the boldly simple stock ticker symbol "K" to go along with it.
Even the WK Kellogg Co is combining the past and future. The company is seeking to position itself as a "117-year-old startup," even as it draws on the name and signature of the Kellogg's founder. There's even a more subtle hint about an unwritten chapter: The "Co" doesn't have a period.
To get to the future, you need to bring along a bit of the past.