Thematic Research
Grocery Wars: Rise of the Machines
Published March 18, 2021
Key Takeaways
Grocery chains are on the cusp of a global grocery war, played out with automation and robotics. Increasing automation in grocery fulfilment and delivery is here to stay. Traditional grocery chains have reached a tipping point: to adapt and prosper in the new normal, or be disrupted and left behind.
The search for scale will see increasing U.S. grocery store consolidation as automation makes scale even more critical. The benefits will accrue to the large with the deepest investment budgets, companies like WMT, KR, ACI, and TSCO. Smaller players will increasingly need to merge to access the scale benefits offered by automation.
OCDO remains a key beneficiary given its evolution to a global grocery fulfilment technology provider.
We remain negatively positioned on the food retailing industry – with both U.S. and U.K. grocery chains likely to face new post-Covid headwinds. Normalizing rates of growth, fewer meals at home, heightened price competition, and higher input costs are set to buffet both the U.S. and U.K. grocery sub-industry’s profitability, just as consumers increasingly move online.
Download the thematic research Grocery Wars: Rise of the Machines to learn more.
Analyst Video
In this video, CFRA Senior Equity Analyst Andrew Tam, CFA, is joined by CFRA Global Head of Sales & Marketing Giles Flower for a Q&A on the grocery industry and how grocery chains are on the cusp of a global grocery war, played out with automation and robotics. Increasing automation in grocery fulfilment and delivery is here to stay.
Watch the recording here.
Webinar Replay
3/25 Grocery Wars: Rise of the Machines
During this webinar, CFRA equity analysts Garrett Nelson, Arun Sundaram, CFA, CPA, and Andrew Tam, CFA, explored the challenges being presented to the industry and the strategic actions being taken to address these issues to remain relevant in an increasingly competitive and evolving landscape.
Topics covered during this webinar:
Watch the replay and Download the slide deck
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