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Hy-Vee builds out infrastructure as it adapts to customer needs

BY David Salazar

Hy-Vee has outlined its plans to bolster its in-store and fulfillment offerings, announcing renovations and new facilities across the retailer’s eight-state footprint. The West Des Moines, Iowa-based company said that its efforts are aimed at adapting its offerings to meet customers’ changing lifestyle needs.

“This fiscal year, we have approved one of our largest capital expenditure budgets in our company’s history to make sure we are not only meeting our customers’ needs, but fulfilling their wants, now and in the future,” Hy-Vee chairman, president and CEO Randy Edeker said. “We’ve studied customer habits and lifestyles and know that fewer people are cooking meals at home than ever before. We want our offerings to help individuals who are looking for something healthy to eat on the go as well as families who want to enjoy a sit-down meal that they can easily claim as their own.”

Among the projects currently taking place is the construction of a 240,000-sq.-ft. production facility in Ankeny, Iowa that will serve as the company’s central bakery as the company moves to offer more meal kits and fresh prepared options. The Ankeny expansion also will see the expansion of Hy-Vee’s PDI distribution subsidiary, the company said. In Chariton, Iowa, Hy-Vee is building a 48,000-sq.-ft. production facility adjacent to its current distribution center there, with plans for the new facility to support its Short Cuts produce brand that will launch in 2018. Hy-Vee also is constructing its new Fast & Fresh convenience and meal solutions banner in Des Moines and Davenport, Iowa, with West Des Moines set to see another small-concept store in 2018, according to the company.

Hy-Vee also said that it plans to open three new e-commerce fulfillment centers in Kansas City, the Twin Cities and Omaha, Neb., which the company said would allow it to meet the growing online ordering needs of its consumer base.

As it builds out its distribution, production and fulfillment, Hy-Vee said it would be revamping its Hy-Vee Market Grille Restaurants, turning them into Market Grille Express locations, which is aimed at catering to on-the-go consumers. Each Market Grille Express location also will include a full-service bar. The company said that it would soon make an announcement about the first of 26 planned Wahlburgers restaurants, and that it would be communicating with its shoppers via direct mail more.

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Albertsons expands with El Rancho Supermercado investment

BY Gisselle Gaitan

Grocery retail chain Albertsons has announced plans to invest in a Texas-based supermarket named, El Rancho Supermercado. The retailer focuses on stores for Latino customers, and will continue to operate as an independent company as part of the deal.

“El Rancho has built a great business with its 16 Texas stores, and we’re confident that we’ll be able to leverage our combined expertise to better serve customers across the existing Albertsons Companies’ and El Rancho store bases,” Bob Miller, chairman & CEO of Albertsons said. “With El Rancho’s own distribution and manufacturing facilities serving their Texas stores, we can share best practices that will reduce costs and benefit our customers.”

This investment will allow Albertsons to invest in the fast-growing Latino grocery sector, and together the two companies believe they will be able to leverage their strengths to better serve customers. The Idaho-based retailer already operates stores across 35 states under 20 well-known banners.

“The transaction announced today will allow El Rancho to accelerate growth and expand into new markets throughout Texas, while finding operational efficiencies in all aspects of our business. We are aligned with Albertsons Companies’ vision for the future, strategic initiatives and culture of innovation. We are excited to work together with the Albertsons Companies’ management team to continue to serve families in the rapidly-growing Latino market,” Salah Nafal, president of El Rancho, said.

Peter J. Solomon served as financial advisor, Simpson Thacher & Bartlett served as legal advisor to El Rancho and Schulte Roth & Zabel served as legal advisor to Albertsons.

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Rite Aid brings Plenti to table with new loyalty program

BY Michael Johnsen

 

NEW YORK — Rite Aid is one of the key retail partners in a first for the U.S. market: a coalition loyalty program called Plenti that includes the likes of American Express, AT&T, Direct Energy, Exxon/Mobil, Hulu, Macy’s and Nationwide. The program, to be managed by American Express, will officially launch this spring and is expected to include more iconic brands in additional categories.
“We are excited to join Plenti and add this compelling customer value proposition to our already successful wellness+ loyalty program,” said John Learish, SVP marketing for Rite Aid. “Our customers told us that adding the ability to earn and use points for savings in our stores and at eligible Plenti partner locations, while saving up to 20% every day in our stores, significantly increases the appeal of our program and creates more reasons for them to shop at Rite Aid more often.”
And it will be a true addition, Learish explained to Drug Store News. Members of Rite Aid’s wellness+ loyalty program won’t lose any of their benefits. In fact, Plenti loyalty members shopping at Rite Aid for the first time will be prompted to join wellness+, after which they will immediately reap benefits like a 10% discount of Rite Aid purchases with the accrual of 500 points. “These are really, really valuable long-term rewards,” Learish said.
Rite Aid will be rebranding its loyalty program wellness+Plenti. The Pennsylvania-based retail pharmacy operator is contributing 25 million established loyalty shoppers to the coalition, and the returns for all parties, from the loyal customer to each of the businesses participating in the program, are expected to be immense. The coalition represents an efficient way to feed the respective customer bases of each partner with personalized offers.
“Three-quarters of the U.S. is within five miles of at least two of these brands,” Jed Scala, head of marketing for Plenti, told Drug Store News. The loyalty coalition represents a “revolution” in the loyalty space, Scala added, noting that one-card-one-retailer programs may become obsolete.
All told, the Plenti loyalty program will be offered through more than 25,000 retail locations. “The reach is going to be pretty significant,” Learish added. “We think it’s going to be a tremendous driver of new business for us.”
For consumers, the coalition of loyalty partners represents greater value — the more business they do with more coalition partners will quickly generate loyalty rewards. And those rewards can be redeemed across any of the coalition partners, which makes the program more manageable and flexible.
Recent research indicates that 72% of Americans say they would prefer a rewards program that allows them to shop at many stores versus a single brand, Rite Aid stated. Plenti is designed to address that need, giving consumers opportunities to earn points at just about every turn — at the gas pump, using their cell phones, watching their favorite television programs, buying insurance, managing their health conditions or going on a clothing shopping spree.
“Plenti will offer customers everyday opportunity to earn and to redeem [their] points with much more choice – so shoppers can choose to reward themselves on routine purchases, or they can save up points to buy great gifts or treat themselves to larger purchases,” noted Martine Reardon, Macy’s chief marketing officer.
Every 1,000 points will translate to at least $10 in savings, and Plenti members can earn points faster by activating special promotional offers across participating brands or through Plentiís online offer center and online marketplace. Another bonus: members who make use of Plenti’s app will be able to redeem any personalized offers in real time.
What’s more, Plenti points will retain their value for two years before expiring.
“This is a perfect time for a coalition loyalty program in the U.S., as online marketing becomes more efficient and American consumers become more accustomed to rewards programs, special offers and discounts,” said Ed Gilligan, president at American Express.
US Loyalty is a division of American Express that will serve as the operator of Plenti, and will issue the rewards and oversee the centralized marketing activities for the program in collaboration with the founding companies. In addition, US Loyalty will be responsible for securely managing consumer data collected through Plenti.
In 2011, American Express acquired Loyalty Partner. The company operates three subsidiaries including: Payback, a leading multi-partner loyalty program designed to deliver value to consumers and generate additional revenue for participating companies. Today, Payback manages coalition loyalty programs in Germany, Italy, Poland, India and Mexico and has more than 60 million active customers.

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