This Wednesday Is Black Friday for grocery stores
Supermarkets do a brisk business earlier than most other retailers.
Most investors focus on which retailer will win Black Friday, even though the shortened Christmas shopping schedule this year means most businesses began offering deals much earlier than the unofficial kickoff to the holiday season.
Supermarkets have their own big shopping day, one that sees store traffic often double in volume. It's the day before Thanksgiving, or what data analytics firm Placer.ai calls Turkey Wednesday. According to the company, "there may not be a bigger day for grocers."
In need of a traffic cop
It makes sense that the Wednesday before Thanksgiving would become the Black Friday of grocery stores. Although most consumers have probably already purchased a turkey to celebrate the holiday, there always seem to be some side dishes, fixings or condiments that get forgotten until the last minute.
Placer.ai took a look at foot traffic for a half-dozen or so supermarkets, including Albertsons, Kroger, Publix, Safeway and Stop & Shop. For the period from October 2017 through October 2019, it discovered these tidbits:
- Store traffic on the Wednesday before Thanksgiving at Albertsons more than doubled to 102.2% above the baseline in 2017 and surged 96.6% above it in 2018, beating out every other day of the year.
- Publix surged 85.2% to 87.2% above the baseline, beating every other day during the period.
- Safeway visits jumped 75.8% to 78.4% above the baseline for the same period and beat all other days of the year.
Turkey Wednesday wasn't the busiest day for every store. Kroger and Stop & Shop reported having a day or two that was busier over the past couple of years, but the day before Thanksgiving was still in the top three in 2017 and 2018.
Other supermarkets – such as Giant, the grocery chain owned by Ahold Delhaize, which also owns Stop & Shop; and Amazon.com's Whole Foods Market – saw their visits peak on the Wednesday before Thanksgiving.
The one real outlier was Wegmans, whose biggest day of the year both years was Dec. 23, when there was a 91.3% increase in visits in 2018. Even the day before Easter was bigger than Turkey Wednesday for the regional supermarket.
The retail king is probably a grocery king, too
Walmart wasn't called out in the data, probably because it's difficult to suss out traffic for the supermarket section of its superstores from the rest of the merchandise. It's safe to assume it sees a spike in store traffic that day, too.
Walmart enjoys a huge spike in brick-and-mortar sales on Black Friday, when about 22 million shoppers flood its stores. Sales last year hit about $4.4 billion for the day, comfortably ahead of runner-up Amazon at $3.9 billion.
It's plausible that a good number of consumers (though undoubtedly not near the Black Friday crowds) also rush in to Walmart on Turkey Wednesday.
Setting the table for growth
The experience at Kroger isn't particularly surprising, considering the difficulty the grocery chain has had over the past year or so in turning its business around. But it reported it is looking for fiscal year 2020 profits and comparable-store sales to exceed Wall Street guidance, which caused its stock to soar. Maybe even Kroger will have something to give thanks for on Turkey Wednesday next year.
While most investors watch retailer results from the launch of the Christmas shopping season, it might be worthwhile to look at which supermarkets feast on a surge on the Black Friday of grocery stores.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.
The Motley Fool is a Paste BN content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of Paste BN.
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