Walmart to acquire grocery delivery platform in Mexico, Chile
Walmart is enhancing its online grocery delivery capabilities south of the border.
The purchase is intended to ramp up multi-platform capabilities in the region, and follows similar investments in China and Japan.
The discounter has entered into a definitive agreement to acquire Cornershop, an online marketplace for on-demand delivery of food, health & wellness and packaged goods from supermarkets, pharmacies and specialty food retailers in Mexico and Chile, for $225 million.
Under the terms of the agreement, Cornershop will remain an open platform that will continue to deliver from a variety of retailers. Its three founders — Oskar Hjertonsson, CEO; Daniel Undurraga, COO; and Juan Pablo Cuevas, chief technology officer, and their teams — will continue to lead the business.
“Cornershop’s digital expertise, technology and capabilities will strengthen our successful businesses in Mexico and Chile and provide learning for other markets in which we operate,” said Judith McKenna, president and CEO of Walmart International. “Combining Cornershop’s innovative, crowdsourced delivery platform with Walmart’s unique assets will allow us to accelerate growth for both companies, delighting our customers by saving them both time and money.”
Closing of the transaction is subject to regulatory approval and is expected by the end of the year.
Kroger tops profit estimates in Q2 results
Kroger’s second-quarter profit topped estimates, but its sales came in below estimates amid ongoing intense competition in the grocery sector.
Net income rose 43.9% to $508 million, or $0.62 per share, from $353 million, or $0.39 per share, in the same period a year ago. Excluding non-recurring items, adjusted earnings per share came in at 41 cents, above estimates of 38 cents.
Sales increased to $27.87 billion from $27.60 billion, below estimates of $27.93 billion. Same-store sales rose 1.6%, below expectations.
On its quarterly earnings call, Kroger management said that its ongoing efforts to adjust store layouts and rearrange brands on the shelves, with an emphasis on its own labels, impacted same-store sales.
“This effect is not a surprise to us,” said CEO Rod McMullen on the call. “We expect the headwinds from space optimization during the first half of 2018 to become a tailwind late in the third quarter.”
Looking ahead, the company raised its net EPS guidance range to $3.88 to $4.03 from $3.64 to $3.79, but affirmed its adjusted EPS outlook of $2.00 to $2.15.
Kroger has been investing in a slew of initiatives to grow its online business as it faces fierce competition in the space from Amazon and Walmart.
“We are only two quarters into our three-year Restock Kroger plan, and we are making solid progress,” McMullen stated in a release. “Kroger customers have more ways than ever to engage with us seamlessly through our recently-launched Kroger Ship, expanded the availability of Instacart, successful ClickList offering, and selling Simple Truth in China through Alibaba’s Tmall.”
Albertsons names Jim Donald president, CEO
Albertsons has named Jim Donald, its current president and COO, to the roles of president and CEO, effective immediately. Alongside Donald’s new position, the company announced that its Robert Miller, its chairman and CEO, would continue as chairman of the board.
Miller’s 57-year retail career that started when he was in high school at his neighborhood supermarket. He eventually worked his way up to the role of executive vice president of operations for Albertsons. He left the company in 1991, serving as CEO of Fred Meyer, COO and vice chairman of Kroger and CEO of Rite Aid, all before returning to Albertsons in 2006 as CEO.
“Jim is an exceptional retailer. In the seven months since he joined Albertsons Companies, he’s flown tens of thousands of miles and met personally with thousands of employees in hundreds of our stores, distribution centers, manufacturing plants, and offices around the country,” Miller said. “His expertise in listening to front-line employees and customers, facilitating employee engagement and generating sales is unmatched, and there is no better leader for Albertsons Companies at this state in our evolution.”
Donald began his career at Publix. He joined Albertsons in 1976, eventually being named vice president of operations in Arizona. Sam Walton recruited him to develop Walmart’s grocery business and Superstore concept in 1991. He joined Safeway in 1994 to become senior vice president of its 130-store Eastern region. From 1996 to 2002, he was CEO of Pathmark, after which he became CEO of Starbucks. Before joining Albertsons in March 2018 as president and COO, Donald was CEO at Haggen, then Extended Stay America, where he led its $565 million initial public offering.
“Albertsons Companies is uniquely positioned to operate in both a ‘four walls’ traditional environment and the ‘no walls’ world of technology,” Donald said. “We serve 34 million customers each week across our 2,300-plus stores and serve 5.5 million patients in our 1,700-plus pharmacies. That’s a significant food, health, and wellness footprint. We’re well positioned to serve the evolving needs of today’s customer, wherever and whenever they choose to shop with us. I am looking forward to leading this dynamic company as we focus on innovation and customer-centric retailing in all its forms.”