Commerce Riff with Sri & PVSB - June 2, 2026

PVSB 0:01

It's June 2nd, 2026, and this is the Commerce Rift brought to you by the CPG guys. Ten minutes of the stories that matter in commerce this week. I'm your co-host, PBSB. I'm joined as always by Papa Raz, the father of Popstars, co-founder of Think Blue Consulting Shree. A lot going on this week. Absolutely, Peter.

SPEAKER_01 0:19

I blinked and half payer is already behind us. You know, I'm excited because tomorrow we'll be handing out the actual retail media awards with Pat to Purchase Institute's annual event. And then we have uh can lines in less than three weeks. A month later we'll be at Ithaca, and we've got a special surprise for you because we will be broadcasting from Cooper Stalmbahoma Baseball Hall of Fame.

PVSB 0:43

It's going to be a religious experience, Sri indeed. Let's get into it. Four stories that four stories this week that cut across the full spectrum in Kroger's massive leadership resets, the magnitude of snap changes, and its impact the grocery marketplace, the expansion of 30-minute delivery service, and Costco reports record-breaking volumes of gasoline. All right. Let's talk Kroger. Because if you're a CBG supplier and you haven't been paying close attention to what's happening in Cincinnati over the last 18 months, now's the time to catch up. Kroger you're calling on today is structurally different than the one you were calling on two years ago when Rodney McMullen was the CEO. And that has real implications for how you show up. Here's the scope of the change. In the most recently filed 10K, Kroger disclosed 10 executive officer changes in a single fiscal year. Wow. That's the most in over 12 years. And at the same time, the store count dropped below 2,700 for the first time in over 11 years. This isn't noise. This is a company in the middle of a genuine reset. Really all traces back to March of 2025 when longtime chairman and CEO Rodney McMullum abruptly resigned following a board ethics review. Still don't know all the details on that street. Inquiring minds want to know. Board member Ron Sargent stepped in as interim CEO, spent nearly a year stabilizing the business, trimming underperforming stores, cutting corporate overhead, running a CEO search. And then in February of this year, Kroger made a hire that the industry hadn't seen coming. At least not in this form. Greg Forin, formerly head of Walmart US, former CEO of Air New Zealand, is now the permanent CEO of Kroger, the first external hire for the top job in the company's 143-year history. Kroger shares jumped roughly 7% that day. The announcement dropped. The market had a reaction. The industry should too. But here's what we want CPG brands to focus on because it's more actionable than the CEO headline. The person now running merchandising at Kroger is Mary Ellen Adcock, EVP chief merchant and marketing officer. 25-year Kroger veteran. Here's what's important about her background. She came up through the operations in manufacturing, not traditional buying. She's not a merchant in the conventional mold. She's an operator. She reportedly delivered over a billion dollars in annual savings. When you pair that profile with Greg Foreign, a CEO who built his entire reputation on store standards and operational discipline at Walmart, you now have a leadership tandem that's going to hold suppliers to a higher standard, not a different standard, a higher one. So what does this mean for your business, if you're CPG, right? Three things. First, read the room with category managers right now. When leadership changes at the top, category managers go into a period of relative caution. They're calibrating to the new priorities. This is not a moment to walk in with a speculative new pitch idea, right? This is the moment to show up with strong data, clear scorecards. We're talking 8451 stratum, right? And a clear performance story. Earn the conversation before you ask for the shelf space. Second, your execution metrics are being watched more closely than ever before. Fill rates on shelf availability, item data accuracy, case pack efficiency. If there's any slop in your supply chain, you will feel it faster under Foreign and Adcock than you did under the previous administration. Get ahead of it now. And third, don't underestimate the division level changes. Multiple Kroger division presidents are new or newly redeployed. Colleen Jurgensen retired after 45 years running the central division. Tom Schwilke after 42 plus years with Ralphs. There's an enormous amount of institutional knowledge that walked out the door. The new division presidents are learning the book. If your brand has strong velocity in a division where leadership recently changed hands, document that story and get it in front of the right people. Don't assume new president inherited your context. Go earn it again. Bottom line, Kroger's not in turmoil. It's in transition. And for the CPG brand, paying attention, there's a real window right now to position yourselves as the right kind of partner for what this company is becoming. Don't waste it.

SPEAKER_01 4:59

Shri, over to you. Straight from grocery dive states implementing restrictions on SNAP spending by the end of 2026. We'll actually see an approximately $830 million sales loss in the categories targeted by the waivers, according to newly released research from November. Redirected or reduced spending by SNAP households could lead to sales losses of $430 million for soda alone, $300 million for candy, and $100 million for energy drinks across the 19 states that'll have waivers in place by the end of the year, according to the firm's research. After Numerator conducted its research earlier this year, Montana became the latest state to seek a waiver request, which is expected to go into effect later this year. Three other states have also received waivers, two of which are expected to take effect in 2027, one in 2028, according to the USDA. These estimated sales hit Condras that roughly a third of SNAP participants will face restrictions by the end of the year, numerator noted. As SNAP waivers rollout across the United States, growers and states implementing the restrictions will likely see major shifts in SNAP consumer spending in the categories targeted by the restrictions. Numerator notes that the state waivers will structurally change the SNAP program entirely. Snap households are largely aware of the waivers, numerator found. Among SNAP households surveyed at the start of this year, 2026, two-thirds nearly of those in states with approved waivers said they plan to use non-Snap dollars to purchase soda became ineligible. While 60% and 45% said the same for candy and for energy drinks, respectively. Numerator's research found that Snap shoppers may opt for healthier alternatives to restricted items, but 30% have surveyed consumers saying they would possibly switch to tea, juice, scarfing in the face of soda and energy drink restrictions. The same percent said the same for candy, noting they would consider fruit ice cream or fruit snacks instead. Numerida also looked at how the government shut down the fall impact with snap spending. The firm found that average weekly grocery spending fell 10% among snap households from $1.233 the week of October 5th to $210 the week of October 26th. Spending then stabilized in early November before recovering during the middle of that month. Numerida's research is based on a survey of 1016 Snap households in late January and purchase data. Peter, 30-minute delivery, is that what you said?

PVSB 7:19

Shri, I have a need for speed because the race to your front door just got a lot more serious. And if you're a CPG brand and you're not thinking about what sub-30-minute delivery means for your business, well, you probably should be thinking about that. Here's what happened just this week. On May 28th, Walmart announced it was expanding its 30-minute or less delivery service from seven cities to 33 cities in the U.S. That's nearly a five-fold expansion in a single announcement. And it comes just two weeks after Amazon made a similar move, expanding its own 30-minute delivery service to dozens of additional cities with more planned before the end of the year. Two of the largest retailers on the planet making major infrastructure commitments to speed within two weeks of each other. That's not a coincidence. That's a battleground forming in real time. Let's put some context around the Walmart number because Tracy Poulott, who is Walmart's chief e-commerce officer, made a statement that I think deserves more attention than it's getting, right? She said that 26% of Walmart's express deliveries are already arriving in 30 minutes or less. Not eventually, not theoretically, right now. More than a quarter of express orders are hitting that threshold. And Walmart has already completed millions of these deliveries to more than 19,000 zip codes just in the first quarter of this year alone. That's not a pilot, Sri. That sounds to me like a scaled operation. And what are customers buying on these deliveries? Well, this is where it gets really interesting for CPG. Walmart calls it the Need It Now category and it spans batteries, of course, party supplies, dog food. Can't let you. Sri, if Bala gives you the look and you don't have dog food, you're in big trouble, aren't you? Cold and flu medicine, baby essentials, last-minute meal solutions. These are not considered purchases. They are impulse and urgent purchases. And they are migrating to a delivery model that until very recently didn't exist at scale. Think about what that means for how your brand needs to show up. The shopper who used to run to the nearby store at 9 p.m. because the baby needs for formula, the dog bowl is empty. That shopper now is a real alternative. And if your brand isn't in the eligible item catalog for Walmart's 30-minute service, or you're not optimized for Amazon's equivalent offering, you are invisible at the exact moment of high purchase intent. That is a miss you can't afford. Our friend Neil Saunders, retail analyst at Global Data, put it plainly: retail is not offering fast delivery. Don't just lose the urgent purchase. They run the risk of pushing that customer to a competing platform entirely where they may not come back. The mission starts urgent, but the habits form there. So what should CPG brand teams be doing right now? Three things. First, audit your fast delivery eligibility. Are your priority SKUs in the catalog for Walmart Express and Amazon's rapid delivery programs? If you don't know the answer, find out this week, not next quarter, this week. Second, think about your assortment through an urgency lens. What your portfolio maps to a need it now occasion. Cold and flu, baby, pet, feel solutions, entertaining, right? These are all the categories already showing traction and 30-minute delivery. If you're in those spaces, make sure your positioning, your content, your search visibility are optimized for the urgent shopper. Speed changes the search behavior. Someone who needs something in the next hour is not browsing. They are searching with intent. Be findable. And third, what's the space on inventory placement? As these programs scale, the retailers that can fulfill in 30 minutes are the ones with inventory positioned closest to the customer. Dark stores, micro fulfillment, stores, warehouse models. That has supply chain implications for how you pack, how you allocate, and how you think about your retail media investment at the local level. The 30-minute delivery space is no longer a future state. It's happening right now in 33 cities and counting. Two of the biggest players in retail putting real resources behind it. The brands that treat this as a logistics story will be behind. The brands that treat it as a commerce strategy will be ahead. Shri, talk to us about gas consumption, would you?

SPEAKER_01 11:28

Yeah, Peter, straight from CNBC, Costco holds out last Thursday said it saw record-breaking volumes for gas in its fiscal third quarter amidst rising fuel prices. No surprise. The company also said it saw first-time members coming to Costco for its gas stations during the quarter. We believe this will drive even greater loyalty with these members in the future, as members who use gas stations typically spend more with us in the warehouse inside. Comments came as Costco reported an increase in net sales for its fiscal third quarter beating Wall Street revenue expectations for the actual period. The company reported net sales of $69.15 billion, up from $11.6% last year. It says adjusted comparable sales were up 6.6% for the quarter with digital sales up nearly 21%. That is a surprise. Here's how Costco performed in its fiscal third quarter compared with Wall Street, is expecting based on a survey awareness by LSDG. EPS, $4.93 versus $4.93 expected. Revenue $70.53 billion versus $69.81 billion expected, $700 million over. For the three-month period, Costco reported net income of $2.19 billion, $4.93 per share, as we mentioned, compared with $1.9 billion or $4.28 per share their prior. Revenue rose to $70.53 billion from $63.2 billion in the year ago period. Costco said it saw memberships grow 4.1% of the quarter along with a 37% increase in traffic on its website and apps. Its top sales categories included pharmacy, home furnishings, gold and jewelry. Costco has been at the forefront of a tariff dispute with the Trump administration after a Supreme Court decision invalidated some of President Donald Trump's league levies on foreign imports. The retailer previously said it would lower its prices and receive tariff refunds following a Supreme Court decision. On Thursday, Vactus said the company has begun submitting tariff refund claims and expects to receive refunds on its approved claims on a rolling basis over the next few months. Our goal is to be the first to lower prices and the last to raise them, VACTIS said. Take us home, Peter.

PVSB 13:47

I'll believe they get that money when I see it, Shri. That's a wrap on this week's Commerce Riff. Reminder to check out our recent conversations, launching our C Suite series with Bob Nolan from Conagra Brands and Mike Weissong, CEO of Care Pharmacies. Anything we covered this week sparks a thought, drop it in the comments. Leave us an email. We read every comment. If you're not following us on LinkedIn, Instagram, TikTok, Facebook, and YouTube, now is the time. Forget about my space. We'll see you next week.