Got several emails about our story last week about Wegmans' decision to close its store at the Natick Mall in Massachusetts.
MNB reader Victor Farr wrote:
Thanks for this write-up. I read your news articles on a regular basis and they are very helpful to get an informed view of what is going on in the industry. I thought this piece on Wegmans was interesting. I had no idea how large their store was in Natick, but 134k must come with a lot of fixed overhead costs that makes the economics much more challenging. Most specialty grocers are moving to smaller formats at ~23k so I suppose the announcement of the closing isn’t too much of a surprise.
And, from another reader:
In the same day’s MNB, you reported that Instacart’s grocery order volume declined in the 1st quarter and that Wegmans is closing a store attached to a mall in Massachusetts. Both events point to the rapidly changing grocery shopping environment.
The Wegmans store in Natick was shiny and new in 2018, and most likely attracted shoppers because it was unique. 2018 is very different than 2023. Now, it is simply too big and inconvenient to maintain the traffic and volume needed to make it viable.
The Instacart volume decline story is similar because their business is also very different in 2023 than it was only 2 or 3 years ago. While there is a steady segment of the shopping public that will continue to rely on home shopping and delivery, it is my opinion that in-store grocery shopping in most parts of the US is more convenient than even on-line shopping. People like going to their local supermarket. They like to shop and pick out items they want. Supermarkets are cheerful, accessible, and part of our communities. And in 2023, it gives people a reason to get out of their houses.
I think your analysis ignores the fact that inflation and a recessionary mindset have prompted a lot of folks to choose to do their own shopping and, at the same time, spend less in general. That doesn't mean the shift is permanent, and I think history suggests that e-grocery will bounce back.
As for Wegmans, the Natick store was an attempt to do something different, and when I went there years ago, I was more skeptical about the location than the Wegmans offering. But, as Jeff Bezos has said, it isn't an experiment if you know how it is going to turn out.
I did a FaceTime last week taking note of a Taste story about the death of Sir Kensington's regular and spicy ketchup, the victim of market forces and, some would say, a monopolistic and monotonous ketchup marketplace. As a big fan of Sir Kensington's - I liked the fact that it had a different look and consistency, and no high fructose corn syrup - I had some thoughts: while I respect market forces, I think it is shame that that smaller companies with unique takes on a category find it so hard to survive.
MNB reader Robert Wheatley wrote:
The brief notation in your post about Unilever acquiring the brand answers the question about “market forces” and ‘even good products’ go away. It is when Big Food acquires a smaller brand that often the doomsday clock begins to tick. Countless times we’ve seen large cap CPG buy emerging brands only to abandon them later because:
• The volumes are tiny compared to their leading portfolio brands, thus less important.
• Big companies lack the passion and commitment of founders.
• The incidents of launch and leave or straight deep-six are legendary because the long-term commitment to patience isn’t there.
Which begs the question why buy them in the first place? Might be starry-eyed forecasts of world domination for the up-and-coming brand they acquire. Or maybe a demand to look for innovations outside the walls of their own organizations -- because it is just sooo hard for unique innovations to get through the de-risking gauntlet of big publicly traded food companies.
In the end it’s a shame to see good ideas go away. Thus the “beware” or at least “aware” neon sign above the acquisition door that once the keys of the kingdom pass to the big guy, the brand’s future is often perilous at best.
Let’s hope the Sir Kensington Team got a nice check on the way out the door.
Another MNB reader wrote:
This is a bummer. I heard about Sir Kensington’s from an older cashier at my local Publix and thought I would give it a go. The lack of corn syrup was very appealing to me. It has been a staple in my fridge for years, even though my wife also prefers Heinz. This ketchup is hands down the best I have used to make a killer cocktail sauce. You will be missed Sir Kensington’s ketchup.
Regarding Albertsons' decision to consolidate its Signature Farms, Signature Care and Signature Cafe products under one master brand, Signature SELECT, one MNB reader wrote:
The only issue I have with Signature Select is that now the only thing that tells you that you're shopping at a Shaw's is the sign over the door. So every banner at Albertsons is pretty much the same in what they carry. IMO they should have kept the Shaw's name intact, much like Hannaford, which still has plenty of items with the Hannaford name on them.