Competition Heats up in Hong Kong & Saudi Arabia
Kroger & Sweetgreen grow, pizza prices fall
Thanks to daylight savings, you’re already an hour behind the news! Ahhhh, get caught up to speed quickly, below, with key updates on Sweetgreen’s salad bots, grocery sales and 3PD international expansions.
Speaking of those juicy subjects, did you catch our sneak peak of Curbivore 2025’s speaker lineup? We’ve got top leaders from DoorDash, FDNY, Sweetgreen, Coco, Serve, Zoox and more joining us in LA April 10-11. See more speakers or go ahead and score some tickets.
This week’s edition is brought to you Gridwise.
Today:
Kroger Grows 2.4%
Sweetgreen Planning 20 More Infinite Kitchens
Chart Time | Pizza Devours Inflation
Foodpanda, Deliveroo & Keeta Expand and Contract
FINANCE | Digital Sales Drive Kroger Growth
The Kroger Companies, the nation’s largest traditional grocery chain, seems to be shaking off its aborted tie-up with Alberstons just fine. The Ohio-based supermarket holding co just released its 2024 financial results, showing identical sales (ex-fuel) up 2.4%, with revenue coming in at $147 billion. Operating profit improved to $3.849B; maaan those grocery margins are slim: 2.6%.
The Big Picture: Grocery may be an old-school biz, but Kroger is taking pains to get with the times. Digital sales grew 10% for the year, even 11% in Q4, with ecommerce now representing over $13 billion in annual sales. While Kroger does store-based fulfillment from its many banners (Dillons, Fred Meyer, Fry’s, Ralphs, etc) the company says its Customer Fulfillment Centers are currently driving the most growth; overall, delivery sales gained 18% YoY. Now we’ll see if Kroger’s next leader can keep up the growth in 2025; the company just ousted its CEO for his “personal conduct.”
PARTNER | Autonomous Vehicles Are About to Transform Rideshare – Here’s What You Need to Know
Autonomous vehicle firms like Waymo, Zoox, and Cybercab are set to reshape ride-hailing and on-demand delivery. But how will these firms tackle key challenges like market selection, optimizing fleet deployment, and balancing pricing strategies to maximize demand and profitability?
Together with S&P Global Mobility, Gridwise Analytics has compiled a must-read report detailing the key insights every mobility leader needs to know.
Key Findings:
Autonomous ride-hailing trips are growing fast, but AV pricing must hit $1 per mile to scale.
Fleet efficiency is a major challenge—AV fleets need to average 12-15% dead miles, but even the best ride-hail fleets operate at 20-22%.
Demand and pricing vary dramatically between and within cities, making fleet optimization complex.
Pooled rides are making a comeback, now at 1.7% of total rides (Sept 2024)—but still far from the 12-19% pre-pandemic levels.
Get the full report now to understand where AVs are headed.
AUTOMATION | Sweetgreen Eyes Profitability in 2025
Tech-forward salad chain Sweetgreen, Inc released its 2024 financial results, with revenue climbing $16% to $678.8 million, as same-store sales improved 6%. Digital sales mix came in at 56% and owned digital revenue at 30%, impressive for the category, but a slight decline from FY23. Despite the growth, the company lost $29M, and Adjusted EBITDA came in at — so close — negative $600k. Sweetgreen thinks 2025 will be the year it finally breaks into the black on an Adjusted EBITDA basis, with its projection ranging from $32 million to $38 million.
The Big Picture: The trouble is that making those salads is pretty darn laborious, with “labor” coming in as the company’s highest Opex expense, representing nearly 28% of sales. The company has a bold plan to get those costs in line, thanks to its Infinite Kitchen concept — its autonomous, robotic salad-making machines. Of the 40 new storefronts the group plans to open this year, half will feature its Infinite Kitchen tech.
Sweetgreen’s Tim Noonan, SVP of Operations Innovation & Services, joins us at Curbivore 2025. Tim is in charge of scaling the brand’s Infinite Kitchen concept; he’ll join us April 10-11 on a can’t-miss panel on the role of autonomy in food prep and delivery operations. See more speakers and register now.
CHART TIME | Is Pizza Inflation Proof?
Subway’s “five dollar footlong” may be but a distant memory these days, and many of the big fast food chains are struggling after amping up the price of their burgers, but one delicacy remains reliably affordable: chain-store pizza! A large pie from the likes of Domino’s or Pizza Hut is about the same price as it was in the 1990s; often times prices have actually gone down when accounting for inflation. The key to this strategy has been volume — the average American now eats 57% more pizza than he or she did in 1988 — and add-ons: that accompanying soda or dessert has not stayed quite so discounted.
OPERATIONS | Deliveroo Exits Hong Kong, Keeta Hits Saudi Arabia
Deliveroo is doing the 23 skidoo out of Hong Kong, selling off its local operations to Delivery Hero’s Foodpanda. HK represented about 5% of Deliveroo’s overall GTV, and had managed to cling on to 20-30% marketshare, but margin-pressure in the discount-happy metropolis was getting unbearable. While this acquisition should at first give Foodpanda a commanding three quarters of the market, Meituan-owned Keeta will likely keep eating into that share, thanks to its aggressive promotional spend.
The Big Picture: Keeta isn’t content to keep its cost-cutting strategies to its home turf. The bright yellow app entered the Saudi Arabian market in October, and has already jumped to a 10% market share, gobbling into Jahez and HungerStation orders. Keeta is investing 1 billion riyals ($267M USD) into the market, luring in customers with 100 riyals ($26.65) in credit, 50% off first orders, and waived delivery fees. As we saw from Talabat’s recent IPO, the Middle East is a particularly lucrative and fast-growing market.
A Few Good Links
DoorDash celebrates Pi Day with deals like $6 or $7 off pizzas at Pizza Hut, Sbarro and Hungry Howie’s. But come on, you gotta get cleverer with these promos, price that pie at $3.14! 7-Eleven / 7NOW’s St. Patty’s Day promo is much closer to the mark. Just Eat Takeaway.com partners with Manna for drone delivery in Dublin. Nirvana raises $80M for AI-powered truck insurance. Nikola to auction manufacturing facility. Chassis producers seek tariffs. Wolt adds ad tools. Uber Eats partners with FreshDirect. The Fresh Market gets into booze biz. Walmart wants to be the store for everyone. 7-Eleven to peel off U.S. stores. Indonesia’s Fore Coffee to IPO. CKE gets new CEO. Wendy’s hungry for store growth. Walgreen’s going private. Papa John’s unveils Meet the Makers TV spots. Pinstripes delisted. Shoppers head to smaller brands to save bucks. Lunchbox opens leadership to new CEO. Adrienne Camire to lead FMCSA. Tariffs creating cross-border trucking frenzy, may impact soda prices due to aluminum costs. Cargo theft grows. UPS adds fuel surcharges.
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