A rising brand, a grocery turnaround, and the retailers that could benefit from Fred’s closing.
At Home Surging
At Home is in the midst of a significant expansion, and the results are looking incredibly strong. In-store activity kicked off strong in 2020 with visits in January and February that were up 7.7% and 13.5% year over year. The pandemic then drove a major drop in March with visits plummeting to a 56.4% year-over-year decline and bottoming out in April. However, May has been surprisingly strong with visits actually showing a 5.9% increase over the same month a year prior and hitting the highest point since 2018 apart from the normal November/December seasonal surge.
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While a skeptic would note that the growth of stores certainly contributes, there is a lot of reason to be excited about the brand. Analyzing daily traffic over the same period shows a sharp rise in visits later in May 2020. In fact, visits on Saturday, May 30th were up dramatically on the equivalent Saturday a year prior. Should the pace continue, and it appears to be doing just that based on early June numbers, the brand’s 2020 could be exceptional.
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Kroger’s Rebound
The Kroger brand had not been enjoying its greatest period pre-pandemic with mixed results throughout 2019. January 2020 continued this trend with a 1.5% year-over-year decline before things changed dramatically. February visits rose 6.0% and March visits grew by 6.9% before seeing an inevitable decline in April. The increase was driven heavily by the renewed strength that traditional grocers have experienced amid the pandemic.
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And the recovery is showing signs that this trend could last for Kroger. Visits are quickly returning to pre-pandemic levels, something that could give this chain a much needed long term boost.
Fred's - Closure Beneficiaries
With Fred’s on its way to a full closure of all stores, a remaining question is who might benefit from this process. Considering the chain’s geographic distribution, the closure is unsurprisingly likely to shift more customers into the Walmart universe. Over 96% of Fred’s visitors, also visited a Walmart since 2018 and over 42% visited a Sam’s Club.
These numbers are significantly higher than key competitors Target and Costco who have overlaps of 49.8% and 6.1% respectively. Additionally, Dollar General and Dollar Tree look to be in store for boosts considering 72.9% and 60.3% of Fred’s visitors also visited stores for those brands during the same period.
Can At Home sustain their offline surge? Will Kroger’s rebound continue? Visit Placer.ai to find out.