Despite the inflationary pressures, supply chain snags and labor shortages that plagued the retail industry in 2022, Wakefern Food Corp., the largest retailer-owned grocery cooperative in the United States, pulled through with a win.
At its most recent shareholder meeting, the Keasbey-based company reported record retail sales of $18.6 billion for the fiscal year ending Oct. 1, a 4.69% increase from the prior year.
Karen O’Shea, a Wakefern spokesperson, cited several factors in 2022’s sales rebound, including the cooperative’s “continued rollout of on-trend, quality and low-priced store brands,” as well as its “focus on savings and promotions.”
“Popular new promotions include programs like ‘Don’t Miss Deals,’ which reduce the sales price of six to eight products each week. We also piloted a new personalized offer called PricePlus Perks, which uses our loyalty card to deliver personalized offers to customers on the brands they buy most often” O’Shea said. “Saving money is so important to shoppers today and they are looking for the best in-store brands and promotions. We offer a value proposition that resonates with customers.”
The 70,000 associates employed across Wakefern’s six supermarket banners also helped drive success, said O’Shea, who added, “We are thankful for all the work they do in stores to help customers and provide the best possible shopping experience.”
For Wakefern, the latest financial results build upon a multiyear trend of revenue growth at the companies in its fold: ShopRite, Price Rite Marketplace, The Fresh Grocer, Dearborn Market, Gourmet Garage and Fairway Market.
As a privately owned company, Wakefern does not publicly release its financial results. However, according to information provided by the company, in 2021, Wakefern posted retail sales of $17.8 billion for the fiscal year ending Oct. 2, a 2.7% decline from the prior year’s pandemic-fueled $18.3 billion.
In 2019, Wakefern reported $16.6 billion in retail sales, up slightly from $16.5 billion the prior year.
Wakefern Chairman and Chief Executive Officer Joseph Colalillo believes the relatively steady increase shows that shoppers know they can count on the cooperative for value, quality and a great shopping experience.
It has also demonstrated how well the cooperative has reshaped itself to adapt to the COVID era, he said.
After the onset of the public health emergency in March 2020, Wakefern took steps to ensure the cooperative survived in the highly competitive “essential retailer” landscape and thrived during the ups-and-downs of the pandemic.
Colalillo highlighted the company’s advances in e-commerce, procurement and technology, as well as the “unwavering commitment” that its member supermarkets have maintained when it comes to “elevating the customer experience.”
Between October 2021 and October 2022, the 76-year-old cooperative opened three new ShopRite stores (Wayne Hills, N.J.; Poughkeepsie, N.Y. and Westfall Township, Pa.) and a Gourmet Garage, as well as welcomed a new member company, Gerrity’s Supermarkets, a family-owned, Scranton-based chain that operates 10 Fresh Grocer supermarkets in northeastern Pennsylvania.
Heading into fiscal year 2023, Wakefern is optimistic about growth opportunities for the 48 member companies that own and operate 365 stores across New Jersey, New York, Connecticut, Pennsylvania, Maryland, Delaware, Massachusetts, New Hampshire and Rhode Island.
Wakefern expects to continue sharpening pricing and promotions, as well as expanding its store brands Bowl & Basket, Wholesome Pantry and Paperbird, which have become popular with shoppers looking for ways to stretch tight food budgets.
“There’s no doubt that the supermarket industry has faced challenges in recent years,” Colaillo said. “But as we’ve always done, Wakefern Members will succeed thanks to their own expertise as grocers and their dedicated teams of retail associates. We are committed to providing our customers with the best possible shopping experience at every touchpoint.”
Despite a year marked by historic inflation, supply chain bottlenecks and worker shortages, the grocery industry has kept innovating.
A recently released survey by trade group The Food Industry Association (FMI) found that food retailers are investing in ways to expand their omnichannel business, as well as improve the customer experience.
Overall, the industry is counting on online sales, curbside pickup and delivery options for future growth. According to the report, 73% are investing in foodservice ordering and delivery, dynamic pricing and mobile checkout. Fifty-two percent said they were increasing labor allocation for online purchase fulfilment, while 48% are assigning associates to handle in-store/curbside pick-up orders.
Retailers are also increasing the space set aside for grab-and-go products, as well as offering more options for fresh-prepared nutritious meals. According to the survey, supermarkets also expect to add more items that are locally sourced (72%), organic (62%), plant-based/animal protein alternatives (64%), allergen-free (38%) and gluten-free (35%).
“A major trend that has emerged from the pandemic is shoppers are looking for fresher, healthier, more convenient options at their grocery store,” said Leslie Sarasin, president and chief executive officer, The Food Industry Association. “Food retailers have absorbed this feedback and are making great strides to create both online and in-person shopping destinations that cater to shoppers’ evolving tastes.”
According to the survey, despite the ongoing period of economic volatility, 61% of food retailers reported a positive impact on business sales and profits in 2021. On the other hand, food suppliers were less upbeat (50% positive, 36% negative).
Going forward, 85% of retailers and 86% of suppliers expect inflation to pressure margins. As for supply chain issues, 70% of retailers said supply chain disruptions are negatively impacting their business—up from 42% from last year, according to the report.
In response to high turnover, the report said that labor presented hurdles toward growth, with 87% of retailers and 86% of suppliers saying finding workers and retaining talent are both impacting their businesses in a negative way.
Given the macroeconomic challenges, FMI said its retailer members are closely watching the ever-shifting behaviors of consumers and trends in an effort to align its strategies with shoppers’ needs.
“While inflation is a cause for concern for the food industry, it is much more concerning for American families who work hard to put food on their tables,” said Sarasin. “The food industry is committed to addressing these challenges so we can support families in the communities in which we operate by providing access to healthy and affordable foods.”
The survey was conducted during the second quarter of 2022 and includes representation from just over 38,000 grocery stores across the U.S., according to FMI.