Online grocery (KR)
Consumers now spend an average of $6.7B on online groceries each month, more than double prior to the pandemic. In 2021 online grocery spending grew 7.2% to $79.2B. According to Adobe online grocery prices increased 7.6% in February. According to Brick Meets Click/Mercatus online grocery sales grew 8.5% in February. Pickup sales grew 6%, accounting for 47% of total digital sales. Delivery sales grew 37%, accounting for 37% share. Ship-to-home sales decreased 24% YOY, accounting for 16% of digital sales.
Monthly active users (MAU) of Kroger’s app decreased 15% YOY in February, similar to the decline in January. Since February 2021 Kroger’s MAUs have decreased double-digits. Kroger continues to invest significant amounts in online grocery. In order for the digital channel to be profitable for the grocers, the volumes and local scale will have to grow significantly from here. The current inflationary environment does not benefit online grocery’s additional fees.
On-premise reopening (BUD)
According to BeerBoard, an on-premise draft tracking firm, the open rate for restaurants, bars, and breweries reached 94% for the weekend of March 10-13. The open rate increased 1% from the period two weeks prior and represents the highest level since May 2020. Sales velocity increased 1.4% from the period two weeks prior and 45.5% YOY. St. Patrick’s day and the NCAA men’s college basketball tournament are expected to provide a boost to the on-premise channel compared to restrictions and a 25% limit on fans in attendance in the prior year. Draft beer had an 8% share of beer volumes for St. Patrick’s Day this year. It was the first time in more than 105 weeks for draft to reach 8% of volumes according to the National Beer Wholesalers Association.
Chick-fil-A’s lines are a public nuisance (LANC)
A Chick-fil-A restaurant in Santa Barbara could soon be designated as a “public nuisance.” The restaurant is so popular that the line for the drive-thru extends into the roadway causing traffic jams. Santa Barbara estimates that traffic is delayed by 70 to 91 minutes a day and on weekends the restaurant leads to delays of 92 to 155 minutes. The restaurant has tried to fix the traffic issues by hiring additional staff and third-party traffic control. The City Council meeting will be held on June 7 to vote on the public nuisance designation which would close the drive-thru. Long lines are not atypical, management said last year 30% of drive-thru customers drive away due to the long lines. Lancaster Colony makes the sauces for Chick-fil-A and many restaurant chains. Lancaster Colony could be the best way for public investors to participate in the growth of Chick-fil-A, as it represents 21% of sales.
