business news in context, analysis with attitude

Yesterday, MNB took note of a Philadelphia Inquirer report that Ahold Delhaize “is suspending its Bfresh brand of smaller-format, urban-focused grocery stores, which it had planned to open in Philadelphia as part of a larger national rollout.” The story also notes that the “Bfresh store in Brighton, Mass., is also set to close this weekend. The Brighton shop is one of three existing Bfresh locations, all of which are in the Boston area.”

The move - which includes the closure of an Everything Fresh small-store format in Philadelphia that was a parallel attempt at creating a new concept - is said to be part of a broader reversion to its established Stop & Shop brand because of time, expense and effort required to establish a new retail brand.

I wrote the following about Bfresh:

I’ve seen several of the stores, and I liked the approach … they weren’t perfect, they needed refinement and time to marinate, but the concept was intriguing and certainly worth investment. However, what I thought was most important about Bfresh was that the concept was created by a skunkworks team that was operating outside company headquarters, with smart and committed people empowered to try new things and emboldened by the reality that as consumers change, traditional retailers need to make fundamental changes. Bfresh never would’ve been created within the physical walls of company headquarters and the metaphysical walls of traditional thinking that has focused relentlessly on the Super Stop & Shop format for so many years.

I don’t know the numbers. Maybe they were hemorrhaging money. But the mindset that created Bfresh was necessary for any traditional retailer trying to be both relevant and resonant for a new competitive reality. It seems to me that for every traditional retailer, going back to the old way of doing business is beyond unacceptable. It is a kind of retail malpractice.

MNB reader Andy Casey responded:

The articles about Ahold and Amazon ending various retail experiments illustrates a rather stark reality; certainly you cant be afraid to fail but seems to me the real question is determining whether an experiment has actually failed or just hasn’t been given the time / resources it needs to succeed.  Knowing the difference may be as much art as science.

Totally agree.

On the same subject MNB reader Dean Balsamo wrote:

That’s too bad about Bfresh and the Fresh format in Philly.
It was that the latter store that first got me to reach out to the Ahold people on behalf of the magazine distributor I was working with.  I loved the feel of it. Busy. Good energy. Homespun with the wood floors and store front downtown but filled with a great selection for the changing demographics-organics, lots of fresh items, even hardware. They nailed it.

This is great, I thought. The manager who came from Whole Foods gave me the name of someone at Ahold and eventually I got in there and met with Jody, the head of the project -in the Harrisburg, PA offices.
She was great. Sharp. Enthusiastic  as were all the people I met focused on Bfresh.  We began to serve them and I was going into  the stores – I really wanted them to work. And also see if one of these big corporate entities could pull off a separate format.   .
(By the way has Kroger opened anymore of those stores like the one in Washington state? Maybe the Lucky is proving to be a better way for them to approach a different kind of format.)
So Bfresh gets some stores open.  Their team begins to evaluate.  My impression was there was some desire to work with the space. Try a different cash wrap approach, different merchandising. But from the conversations I had in the stores with people involved in setting them,  all the shots were being called by the  design company – Dutch I believe. So the space dictates stayed the same.
It seemed like over the time I worked with  them –  a new CEO coming on board at this time as well  (he saw the store and I don’t’ think he liked the layout.)  the energy must have taken a hit.
Ahold isn’t  H.E.B. they just don’t  the nimbleness and maybe the same kind of trust in their employees.

From another reader:

You hit the nail on the head with your opinion.

Just to add another piece in the Ahold saga…

I found it very interesting and almost comical (though it is not) that Ahold/Delhaize was ranked as one of the most friendly work environments for its employees.

I wonder how they could even print such a rose colored view point.

Everyone, to a person that I have talked to, is very unhappy with their work place in the Ahold office.  Jobs are being cut.  Responsibilities are being dramatically increased and pay scales are being lowered.  The experienced talent is being moved out, and replaced with unproven personnel.  This is in very key positions. 

Plus with the decentralization, there are just turning up the heat on an already boiling pot. 
Their future, in my eyes, is going to be very rocky. Market Basket and Wegmans send their best wishes.

I did get one email that challenged my thinking, from an MNB reader who quoted a line from Tom Furphy that had been quoted by Michael Sansolo in his regular Tuesday column:

Regarding Bfresh…

Why can’t Ahold be viewed as “never being afraid to end or alter experiments that aren’t working” instead of being accused of “retail malpractice”?

A fair point, but I think the first few emails offer a response … that a change from the skunkworks approach that launched the concept to a more corporate management may actually have doomed it. The issue isn’t length of commitment, but depth of commitment.

I also think my point of view regarding Stop & Shop is colored by the fact that where I live, the company has two of the lesser stores in the fleet. Not a lot of innovation going on there - it is the very essence of a late 20th century supermarket. Which in 2017, is disappointing, and not a good sign for the ability to adjust to a changing and highly competitive future.
KC's View: