Developing a strong e-commerce offering and optimizing a small format may be among the opportunities for Wegmans in the coming years.
Kantar Consulting, which recently ranked the top 50 U.S. retailers by 2018 sales, forecasts that Wegmans will have a sales compound annual growth rate of 4% for 2018-2023 after having a 5% growth rate for 2013-2018.
Elley Symmes, a senior analyst for Kantar, described Wegmans as a best-in-class operator in terms of store experience and customer relationships but noted some areas where evolution may need to occur.
“Their suburban stores are stores right outside of a big city center are incredible, they do super well, these are 100,000-sqare foot stores or 70,000-square foot stores, but the ones that kind of have to be condensed down to like a 40,000-50,000-sqare foot box, that’s where Wegmans kind of has a tough time,” Symmes said. “As they look to maybe start having more of these stores — not that they’ve announced anything major, but I’m just thinking in terms of new organic capacities they could grow and new shopper segments they could target — they’re going to have to figure out ways to really create that same type of store experience that they’re able to do in that bigger box in that smaller capacity.”
E-commerce is another area of opportunity.
“Their partnership with Instacart this year was really productive because it brought that delivery overnight to some of their stores, but they have also been really slow to launch that online grocery capability, and that could end up being a barrier for them as shoppers just increasingly expect that, and so that’s going to be again kind of a question mark,” Symmes said. “They’re going to have to make some tough investments that I think go away from that core Wegmans strategy ... (in order) to really set themselves up for how the shopper’s evolving going forward.
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