America's largest grocer is revamping its produce section

Produce is the first thing customers see when they enter Walmart and a key part of the retailer's defense against Amazon. So Walmart is giving its produce ai...

Posted: Nov 20, 2019 11:58 AM

Produce is the first thing customers see when they enter Walmart and a key part of the retailer's defense against Amazon. So Walmart is giving its produce aisles a makeover.

The largest grocer in the United States announced Wednesday that it will renovate produce areas with new signs highlighting prices and shorter merchandise bins to create an "open market feel" for customers. Walmart will also move all of its organic items into a single area of the department to make them easier to find. And it will widen the aisles to try to keep them from clogging up with customers and employees who pick up online grocery orders.

Online grocery shopping has "fundamentally changed the way we operate our food business within the store," said Charles Redfield, executive vice president of food at Walmart's US business. "We've always got associates in the produce area. This layout created more space in the department to allow room for customers to shop."

The revamp, which Walmart has dubbed "Produce 2.0," has already started at more than 200 stores. Walmart expects to complete it at the majority of its 4,700 US stores by next summer.

Produce is an important category for grocers because 95% of shoppers prefer to buy it in store. And that number is growing. Produce sales grew 2.6% last year, according to a Nielsen study published earlier this year.

"Fresh is key to the food shopping experience," said Redfield.

Walmart hopes a new merchandising look will help convince shoppers that it offers high-quality fruit and vegetables.

"It plays to big, overarching consumer trends in health and wellness," said Jon Springer, executive editor of Winsight Grocery Business, an industry trade publication.

Walmart's rivals have also invested in produce. German discount grocer Aldi expanded its produce and organic offerings in recent years, while Kroger's new slogan and advertisements, "Fresh for Everyone," emphasize its focus on fresh food.

On Tuesday, Kroger said it will begin growing some produce in hydroponic farms at its QFC stores in Washington state.

America's largest grocer

Walmart's latest initiative in produce is another attempt to bolster its 31-year-old grocery business.

Walmart began selling groceries in 1988, when it opened its first superstore. Since then, groceries have become Walmart's largest sales driver, accounting for 56% of the company's more than $500 billion in revenue. Walmart is America's largest grocer and controls around 20% of the fragmented US grocery industry, according to Morgan Stanley estimates.

The company has lowered prices on produce in recent years to compete with discount rivals and taken steps to speed up its supply chain. That has extended the time that fruits and vegetables last on the shelves.

"One thing the customers were telling us is that, you know what, 'We didn't believe in your quality.' We knew we had some work to do there," Redfield said.

Walmart has also poured investments into online grocery shopping to defend against Amazon, which bought Whole Foods in 2017 and plans to open a new grocery store next year in Los Angeles as an alternative to Whole Foods.

Walmart added buy-online, pickup-in-store to around 3,000 locations and home delivery from more than 1,400 locations. The company recently launched a $98-a-year grocery delivery subscription.

During Walmart's most recent quarter, online sales grew 41%, bolstered by grocery pickups and deliveries.

"Fresh has become an important part of that online grocery basket," Redfield said.

New York Coronavirus Cases

County data is updated nightly.

Cases: 1686993

Reported Deaths: 48247
CountyCasesDeaths
Queens2172658903
Kings2169639239
Suffolk1658793120
Nassau1519702951
Bronx1482105943
Westchester1099512122
New York1068643974
Erie666041616
Richmond585451602
Monroe53274997
Rockland39546896
Orange38029730
Onondaga32733636
Dutchess22900413
Albany21180334
Oneida19896481
Niagara15508315
Broome15384339
Saratoga12190148
Schenectady11010178
Ulster10279231
Rensselaer9205132
Putnam853986
Chautauqua7425125
Chemung6480130
Oswego610689
Ontario589890
St. Lawrence568990
Steuben5581138
Cayuga542889
Jefferson489163
Sullivan486360
Herkimer4601107
Wayne452865
Cattaraugus448977
Genesee4473118
Madison389385
Clinton376127
Livingston359956
Tompkins350943
Columbia344396
Fulton342485
Montgomery3244107
Cortland323160
Allegany292481
Warren290755
Wyoming287949
Tioga285456
Greene270071
Chenango248770
Orleans247282
Otsego247043
Washington239754
Franklin216012
Lewis209630
Seneca164853
Delaware157333
Essex136326
Schoharie124313
Yates102326
Schuyler87212
Hamilton2852
Unassigned16099
Out of NY0194
Rome
Clear
22° wxIcon
Hi: 26° Lo: 5°
Feels Like: 10°
Binghamton
Clear
22° wxIcon
Hi: 26° Lo: 11°
Feels Like: 10°
Rome
Clear
22° wxIcon
Hi: 27° Lo: 8°
Feels Like: 10°
Rome
Partly Cloudy
22° wxIcon
Hi: 22° Lo: -2°
Feels Like: 10°
WKTV Radar
WKTV Temperatures
WKTV Severe Weather
Foodie Fridays Rosa's 50% 0ff - Now thru March 18
Submit your Mutt Madness Picture through March 10th
March into Beautiful Skin Giveaway
Under 100 2021 Golf Cards left!
Saluting Those Who Are Proud 2 Serve