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Kohl’s, one of the USA’s leading retailers has announced a series of changes to its bricks and mortar stores and online operations that will see them open more small-format stores to its footprint and boosting its fulfilment network. It expects to open four smaller stores in the third quarter, adding to the ones it opened in 2016. They will be located in North Smithfield, RI; Blue Ash, OH; East Windsor, NJ; and Montebello, CA.

The retailer’s new 937,000 square foot facility in Plainfield, IN is also set to open this month and will be dedicated to fulfilling website orders. Equipped with the latest technology to maximize the productivity and throughput, it will help grow Kohl’s ecommerce side of the business and maintain its position as a true omnichannel retailer.

“Our stores remain at the core of our omnichannel strategy and we will continue to invest in them by opening smaller formats, right sizing and optimizing our selling space and working to ensure that shopping in our stores is an engaging and inspiring experience for our customers,” said Kevin Mansell, Kohl’s chairman, chief executive officer and president.

“We have set a goal to be the best-in-class omnichannel retailer and opening our fifth ecommerce distribution center will support the delivery of online orders faster and more efficiently to customers nationwide.”

Despite having some recent troubles, Kohl’s enjoys some benefits and advantages over its rivals such as J.C. Penney and Macy’s, who are both tied to malls and have been closing stores.

Talking to Retail Dive, Howard Davidowitz, chairman of retail consulting and investment banking firm Davidowitz & Associates Inc. said:

“Kohl’s has the best ROI, the best profitability and seven points less in cost because they’re off the mall, not on the mall. They have the lowest cost structure. They’re like T.J. Maxx — 80,000-square-foot stores but a racetrack format with central checkout. Kohl’s has the least adjustments to make and … the best matrix because they’re not a high-cost operator.”

About Kohl’s

Kohl’s is one of the USA’s leading omni channel retailers with over 1100 stores across 49 states. Kohl’s offers national and exclusive brands and market leading prices as well as an enjoyable and easy shopping experience in both its stores and online on its website and mobile app. It originally opened in 1927 as a corner grocery store, its first department store opening in 1962. It is currently America’s second largest department store by retail sales in the USA and also has a strong ecommerce presence too.

Amazon has not wasted any time in making an impact as the owner of the bricks-and-mortar grocery chain Whole Foods and has cut prices by as much as 43%.

The ecommerce giant’s $137 billion of Whole Foods has sent seismic shockwaves through the supermarket industry in that it has the potential to change the way that customers shop for groceries. By cutting prices at the Whole Foods chain (known by many as Whole Paycheck thanks to its expensive prices) it shows that Amazon is very serious about taking on bricks-and-mortar retailers such as Wal-Mart Stores, Kroger Co and Costco.

“Price was the largest barrier to Whole Foods’ customers,” said Mark Baum, a senior vice president at the Food Marketing Institute, an industry group. “Amazon has demonstrated that it is willing to invest to dominate the categories that it decides to compete in. Food retailers of all sizes need to look really hard at their pricing strategies, and maybe find some funding sources to build a war chest.”

In the UK, whilst Whole Foods has just seven shops there, the effect was still huge, with shares in each of the major grocers falling. Both Sainsbury’s and Tesco saw their share prices drop by more than 1.8% (as did M&S) but the biggest hit was felt by Morrisons whose shares fell by over 3%. The larger fall in the Morrison’s share prices could be caused by uncertainty about the future of Amazon’s agreement with the supermarket to sell fresh food in the UK with them.

However, Duncan Brewer, a partner in the retail and consumer team at Oliver Wyman, said he was unsure how much the share price drops were down to price cuts at Whole Foods.

“On the face of it it does not feel like a few Whole Food stores in the UK make a difference to the huge and successful players we have here but I think price cuts are one part of a much bigger strategy which Amazon has been pursuing for 5-10 years to move into the food space in an aggressive and frankly quite unusual fashion,” he said.

He does however think that Amazon are well positioned to seriously challenge the big supermarkets because Amazon are far better positioned to meet the needs of customers, having the potential to become what could be called a ‘digital butler’ service using the immense amount of data it has at its disposal to provide an informed and personalised shopping experience.

“They are building a capability to serve your food needs however you want them to be served and you have to start wondering if the data they have can could mean Amazon knows what you want to eat and cook before you do,” Mr Brewer said.