THE FRIDAY 5: A Deeper Look at ALDI’s Success; Latest E. Coli Outbreak Linked to Carrots

1. ALDI’s Big Week

It was a big week for ALDI in the Progressive Grocer universe. First, the fast-growing discount grocer announced that it is expanding and renovating its U.S. corporate campus in Batavia, Ill. The project will include the complete refurbishment of the interiors of three existing office buildings on the 60-acre campus and the design and construction of a fourth structure. ALDI’s goals for the project are centered around operational efficiency, sustainability and employee retention. 

“We aimed to design a workplace for our employees that fosters creativity and productivity,” said Brian Holcombe, director of national services facilities, ALDI U.S. “This new building is intended to invite collaboration through its open spaces, encouraging employees to connect and work together effectively. We believe these enhanced amenities will help our team feel right at home.”

ALDI’s one-of-a-kind sampling experience also grabbed reader attention this week. The discount grocer will debut its Charcuterie Chalet in Chicago Dec. 4-5, bringing together 90-plus cheeses, charcuterie and wines to create a holiday wonderland event. Amid a ski lodge ambiance, consumers can explore a curated selection of food and beverage offerings that they can recreate at home for holiday celebrations at a reasonable price. 

Finally, a conversation with ALDI U.S. President Dave Rinaldo also made news this week. The executive talked with PG Senior Editor Lynn Petrak about the company’s guiding principles, its remarkable inroads and how retailers can partner with manufacturers to keep the private label momentum going. Read on for the full interview. 

2. Another E. Coli Outbreak Hits Food Industry

Following several recent food recalls and outbreaks, news broke this week that Grimmway Farms, of Bakersfield, Calif., issued a recall on Nov. 16 of select organic whole carrots and organic baby carrots due to potential E. coli contamination. The carrots were shipped directly to retail distribution centers nationwide in the United States, Puerto Rico and Canada, and affected grocers include Trader Joe's, Wegmans, Sprouts Farmers Market, Whole Foods Market, Target, Walmart, Publix and Kroger. 

The FDA and CDC, in collaboration with state and local partners, are currently investigating illnesses in a multistate outbreak of Shiga toxin-producing E. coli O121:H19 infections linked to Grimmway's carrots. As of Nov. 21, 39 illnesses, 15 hospitalizations and one death have been linked to this outbreak.

“We take our role in ensuring the safety and quality of our products seriously,” said Grimmway Farms President and CEO Jeff Huckaby. “The health of our customers and the integrity of our products are our highest priorities, and we are conducting a thorough review of our growing, harvest and processing practices. Our food safety team is working with our suppliers and health authorities.”

3. Grocery Outlet Cuts Ribbon on New Ohio Store

Progressive Grocer was on the ground this week as California-based Grocery Outlet opened its latest outpost in the state of Ohio. The store, located in the city of Ontario marks the third Grocery Outlet location in the Buckeye State and the first in the Greater Cleveland region.

In addition to stores in Boardman and Cincinnati, Ohio, Grocery Outlet is also planning two new outposts near Dayton, according to reports. 

Grocery Outlet has been on a roll with a strong third quarter, which saw net sales increase 10.4% to $1.11 billion, due to new store sales and a 1.2% increase in comparable-store sales. Comp transaction growth of 2% was partly offset by a 0.7% decline in average basket. Comps during the summer were challenging but accelerated in September to 3.8%.

“Our double-digit third quarter net sales growth reflects the strong positioning of our consumer offering – value continues to win in the market and we continue to grow our share of consumer nondiscretionary spending,” said Eric Lindberg, chairman and interim president and CEO of the discount grocer.

4. Walmart Captures Massive Grocery Share…

Following Walmart’s latest quarterly earnings report, which revealed food categories were especially strong during Q3, Numerator revealed that Walmart has captured 21.2% of grocery market share over the past year. This far exceeds such grocery retailers as The Kroger Co., at 9.3%; Costco Wholesale, at 8.5%; Albertsons Cos., at 5.1%; and Publix Super Markets, at 4.2%

One of the reasons for this growth is Walmart’s budget-friendly prices, especially as inflation-weary consumers are spending their money where the best deals are, and lately that’s been at Walmart.

“Providing everyday low prices for our customers and members remains a priority, and we continue to lower prices in the U.S. across our assortment of national brands and private brands,” said John David Rainey, Walmart’s EVP, CFO during the company's earnings call. “During the quarter, we had price rollbacks on approximately 6,000 items across our assortment, including around 3,000 items in grocery.”

5. …But Amazon Remains Lowest-Priced Online Retailer

While Walmart is popular, an independent study from Profitero has once again found that Amazon offers the lowest online prices compared with all major U.S. retailers. The annual “Price Wars” study, which compares online prices for more than 13,000 products across 22 major U.S. online retailers, proved that Amazon once again was the leader, with an average price advantage of 14% over its rivals. However, competitors have closed the gap compared with last year, when Amazon had a 16% price advantage.

Amazon was found to deliver the lowest prices across all 15 product categories that the study analyzes, including baby, beauty, packaged food and beverage, health and personal care, household supplies, pet supplies, and vitamins and supplements.