Key Takeaways

• Cub Foods is a local grocery store that provides the best produce.
• In 2022, Cub Foods announced that it would deploy Afresh Technologies operating system across its stores.
• Cub Foods uses Citrus ADs, Fed-Ex, Facebook, Twitter, Instagram and Google Maps for its marketing and e-commerce needs.
• The top three competitors of Cub Foods are Target, Walmart, and Costo.

Introduction

COMPANY ANALYSIS

Overview

• Cub Foods is a local grocery store that provides the best produce. It also offers a "full selection of meat and seafood, deli and bakery favorites, pet food, gift cards and flowers, a full pharmacy and liquor stores."
• The company was started in 1968 and has been in operation for over 50 years. Its headquarters are in Minnesota, United States.
• Cub Foods is a private company and has an estimated revenue of $1.89 billion. It was owned by SUPERVALU Inc. but changed ownership to United Natural Foods, Inc. (UNFI), which acquired SUPERVALU Inc. for $2.9 billion in 2018.
• The company's main products include fresh produce, milk, meat and seafood. It also has a pharmacy and sells liqour.
• Cub Foods claims to provide the best produce in town. It iterates by issuing the following promise, "If you don't love it, not only will we replace it, we'll give you back your money, too."
• Furthermore, it issued a seven-day freshness guarantee for its dairy products.

Strategic Initiatives

• In 2022, Cub Foods announced that it would deploy Afresh Technologies operating system across its stores. Cub Foods deployed the Fresh Operating System in order to deliver better and fresher products to its customers.

• Cub Foods launched its proprietary e-commerce platform in 2021. It plans to use the platform to fulfil online orders from its physical stores.
• In Nov 2021, Cub Foods revamped its online grocery ordering process to incorporate in-store shopping benefits. One of the changes the company introduced was allowing the use of MyCub rewards to access exclusive in-store promotions. The card will also enable access to "preloaded savings and digital coupons on hundreds of products." The purpose of revamping its online grocery process was to give customers who shop online the same experience as the ones who shop in stores.
• In Nov 2021, CUB Foods took the initiative to personalize online shopping experiences for its customers. It planned to integrate CitrusAd's technology to "tailor retail media to shopper preferences and purchase history." Apart from benefiting Cubs customers, this initiative will also help suppliers by providing them real-time data that will optimize marketing campaigns.

Executive Quotes

• Chad Bersie, director of e-commerce at Cub Foods voice the following in regards to Cub Foods digital strategy:
• "Our work with CitrusAd provides our supplier community with a fully transparent, self-serve platform for e-commerce marketing automation and personalization with clear ROI analytics.”
• "Our new online grocery pickup and delivery experience allows us to better deliver on our ‘My Cub, My Way’ promise, giving customers who shop at Cub access to the same benefits and experience whether they prefer shopping in our stores or online through curbside pickup or home delivery.”

Tech Stack

• Cub Foods uses Citrus ADs, Fed-Ex, Facebook, Twitter, Instagram and Google Maps for its marketing and e-commerce needs.
• It also uses Tableau Software, Teradata, FaceBook Pixel For Shop, Google Analytics and Google Translate for its business intelligence and analytics needs.
• For customer management the company uses HappyFox, Desk.com Chat, and Upside Business Travel.

CORPORATE CHALLENGES

Delays in Selling Stores

• Since Cub Foods owners United Natural Foods, Inc. (UNFI) acquired the company, their goal was to sell the stores and exit from the retail business as soon as they could find a buyer. But in 2020, the company was forced to delay the sale of Cub Foods stores by another 12–18 months.
• One of the reasons that caused a delay in selling Cub Foods was that the management could better understand the retail mergers and acquisitions market.
• According to UNFI CEO Steve Spinner, the company could not sell the stores because it would be morally wrong to deprive an underserved, difficult market of produce during the COVID-19 pandemic by closing its stores.
• The company also had difficulty differentiating Cub Foods retail and wholesale since they are tightly linked. Because of this, the UNFI management had a difficult time executing a sale for Cub Foods.
• However, two years later, UNFI Chief Financial Officer John Howard said that the company's strategy to sell Cub Foods had changed due to its outstanding performance in the market. It is now looking to run, invest and grow Cub Foods.

Unsatisfied Employees

• According to reviews about Cub Foods posted at Comparably, employees at the company are dissatisfied.
• One of the issues that the employees complain about is their total compensation. The employees are dissatisfied with what they take home in the form of "pay, stock and equity, and benefits." "37 employees at Cub Foods rank their Compensation in the Bottom 25% of similar sized companies in the US (based on 116 ratings) while 35 employees at Cub Foods rank their Perks And Benefits in the Bottom 15% of similar sized companies in the US (based on 38 ratings)."
• Low compensation is a challenge to the company as it induces low productivity. Furthermore, it might lead to low job satisfaction, reducing workplace morale.

COMPETITORS

The top three competitors of Cub Foods are Target, Walmart, and Costo. The above competitors were selected based on their grocery market share in the geographic location (Minneapolis) that Cub Foods operates in.

Source

 

Target

• Target is a retailer that sells groceries, among other things, online and in-store. It claims to provide the best selection for its consumers' grocery needs.
• Target's website can be here. It competes with Cub Foods for the market share of groceries sales in Minneapolis. Its groceries landing page can be found here.
• In 2020, with a market share of 18.3%, Target beat all other competing companies selling groceries in Minneapolis.
• Target commanded the largest groceries market share by "addressing the look and feel of grocery departments in its stores. The company also reintroduced private brands and partnered with national brands that emphasized new and exclusive products. Furthermore, it adopted an omnichannel business model that provided consumers the convenience to acquire everything they needed from one place.

Walmart

• As a retailer, Walmart sells more groceries in the US than any other retailer.
• Walmart's website can be here. It competes with Cub Foods for the market share of groceries in Minneapolis. Its groceries landing page can be found here.
• In 2020, it was the second largest grocery retailer in Minneapolis, with a market share of 17.6%, competing with both Target and Cub Foods.
• Walmart Chief Merchandising Officer Charles Redfield said that the company is committed to "always provide its customers with fresh, high-quality food items at the everyday low prices they expect, no matter how they shop."
• The company recently redesigned its store departments to include a bold dimensional interface to help direct customers to where they want to go.
  Source
   

Costo

• Costco Wholesale is a "multi-billion dollar global retailer with warehouse club operations in eight countries."
• Costo's website can be here. It competes with Cub Foods for the market share of groceries in Minneapolis. Its groceries landing page can be found here.
• It was the fourth largest grocery retailer in Minneapolis in 2020, with a market share of 10.5%.
• The company offers customers same-day or two-day delivery options for their groceries.
• Costo has simplified online grocery shopping for its customers by allowing them to customize their search for products based on brand, dietary needs, and the number of servings, among other options.

Research Strategy