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- [00:00]
A
Hey, it's PVSB with the CPG guys. You know, we talk a lot about this on the show. For CPG marketers today, it's not just about reaching consumers. It's about connecting with them meaningfully at every touch point. Here's the reality. Shopping isn't just an event anymore. It's woven into daily life. And with consumers spending over 90 minutes streaming content, daily entertainment has become central to the shopping journey. Amazon ads unifies commerce entertainment and open Internet to reach 86% of US households, turning trillions of consumer signals into powerful results both on and beyond Amazon. So visit advertising.Amazon.com to learn more.
- [00:51]
Hello, it's December 9th, 2025. Welcome to episode 14 of the Commerce Rift with the CPG guys. A week short segment burst digestible 10 minutes of content, both audio and video. We hope you enjoy our curated stories. I'm of course your co host, pvsp. I'm joined by Papa Raj himself, co founder and CRO of Think Blue Consulting. He's the man known as Sree. How you doing Sree? Back from the concert tour. You've been a roadie, haven't you?
- [01:21]
B
Indeed, Peter, doing great. Just got back from a four city tour of Rio Raja's Commotion tour. The culmination of the fifth city was today a home turf, La Pal. Packed. You know, seeing so many people, diverse audiences sing lyric by lyric of every song you join me for New York City, you got to see the madness yourself. And that's in between seeing Lara Raj five times over in three cities. That will be Thursday and Friday this week in la, followed by Mexico City next week. So Peter, it's been a hectic month. Please do follow our Instagram, TikTok and YouTube channel simply called CPG. Guys, it's that easy. Let's get to this week's first topic. It's ultra fast 30 minute delivery by Amazon. What do you got, Peter?
- [02:01]
A
Yeah. Amazon tests ultra fast 30 minute delivery service in Seattle and Philadelphia. They're launching a new delivery service called Amazon now that brings household essentials and groceries to customers doorsteps in about 30 minutes or less. The service is currently being tested in select areas of Seattle and Philadelphia. Prime members pay a discounted delivery fee of just $3.99 per order compared to $13.99 for non prime customers. There's a small buck 99 for orders under $15. Customers can choose from thousands of items including fresh produce, milk, eggs, pet supplies, diapers, paper products, electronics, OTC medicines and snacks. The service is accessible directly through the Amazon Shopping app and website. Customers in eligible areas will see a 30 minute delivery option in the navigation bar. They can browse available items, track their orders in real time and have the option to tip their drivers. To make this rapid delivery possible, Amazon is using specialized, smaller fulfillment facilities strategically located close to where customers live and work. This approach shortens the distance delivery partners need to travel while prioritizing employee safety and enabling faster delivery times. The this launch builds on Amazon's decades of delivery innovation and represents the company's latest move to meet customer demand for increasing faster delivery of essential items. Interesting. Not surprised by Seattle, Philadelphia. Gee, I wonder who they're going up against for that that last minute super fast delivery. Over to you sri.
- [03:41]
B
I know it's going to be a challenge for the incumbents, but it was retail earnings week two big retailers announced. One of them was the Kroger Co. Who reported strong sales for its third quarter as its digital business surged and said it expects to appoint a new CEO during the first quarter of 2026. At this point, Peter, every retailer is reporting growth entirely based on digital surging. Anybody who talks to you and me about E commerce being a challenge hasn't figured out profitability is nothing more than a Luddite. Let's say it again, nothing more than a Luddite. On the company earnings call, Chairman and interim CEO Ron Sergeant said the company plans to accelerate capital investment in new stores beyond 2025 to strengthen its competitive position, expand into hypernetial geographies and support long term growth. We expect to break ground on 14 new stores in the fourth quarter. That's a lot, Peter, making a meaningful acceleration activity, sargent told analysts. When you look at 2026, we expect to increase new store builds by 30%. Sajant also said that Kroger has opportunities to grow through acquisition, something it hasn't ruled out despite the last few years of effort with Albert. Since when you look at our long term aspiration, we expect and plan to be a national retailer, he said. Earlier this quarter, Kroger announced expansion plans for Harris Theater, which Sajan called one of the company's strongest and most successful banners. The plans include opening additional new stores in the Southeast and entering Jacksonville, Florida, which is a clear expansion, new state and an important adjacent geography that positions us to grow households and gain share. If you remember Peter, Florida market was entered entirely via E commerce dark warehouses and now we're talking about brick and mortar stores through Harris Streeter. In May, Kroger named Sargent is interim CEO after Chairman and CEO Rodney McMullen resigned from the company following a board investigation of his personal conduct that was inconsistent with Kroger's policy and business ethics. On the call, Sargent said the company had been engaged in a thorough process and expects to appoint a new CEO during 1Q26. On the tech side, Kroger plans to introduce new agentic shopping capabilities, starting with Instacart's AI powered Card Assistant on the Kroger website and mobile app in 1Q26. The card assistant will help customers shop more effortlessly by making it easier to build personalized baskets, find meals and save time, sargent said.
- [05:56]
A
Sri I think you know that when I take Nadia down to Orlando to the Magic Kingdom, I don't shop in physical grocery stores. I've been using Kroger's home delivery there for for quite a number of years. So having a physical store location move into into Florida, one of the few areas where Kroger doesn't have a physical presence. Not surprised at all. All right, SRI Walgreens expands retail media with AI Powered order Confirmation ads Walgreens Advertising Group is opening up new inventory to non endemic brands through a partnership with rokt, an AI powered commerce technology company. The deal gives the Advertisers access to Walgreen.com's square order confirmation page, reaching millions of customers at a high intent moment right after they complete a purchase. This represents a significant expansion beyond traditional health and wellness categories that typically advertise on pharmacy retail sites. Quote we are committed to connecting brands with one of the most loyal and engaged consumer bases in the country, unquote, says friend of the podcast Avi Subramanian Group vice president of Consumer Marketing Loyalty at Walgreens Advertising Group. By expanding our retail media ecosystem with AI powered capabilities, we're giving advertisers new ways to engage customers in meaningful moments while creating incremental value for Walgreens. Rock Technology uses artificial intelligence to deliver personalized, relevant offers to consumers in real time on transaction confirmation pages. Craig Galvin, Rock's chief revenue officer, emphasized that the partnership aims to create a new monetization channel while prioritizing Walgreens customer experience. Bottom line is, this move highlights how AI is becoming an early application in retail media for both ad execution and measurement for CMOs and agencies. Staying ahead of the AI powered retail media capabilities is becoming essential as the channel continues to evolve beyond traditional display advertising. Sri, close it out for us, would you?
- [08:00]
B
Yep. I had mentioned two retailers of scale having made earnings announcements. One is a national retailer, value provider Dollar General and Dollar Tree, both reported November quarter Results this week with wildly different outcomes. Dollar General beat earnings by 36% on December 4, driving a 20% two day rally in its stock. That stock is almost back to where it was before the giant crash of year and a half ago. Dollar Tree missed estimates by 7.6%. On the other hand, in December 2, despite stronger revenue growth, the contrast shows which discount retailer is winning on fundamentals. Dollar General reported Q3 earnings of $1.28 per share against estimates of 94 cents, a 34 cent surprise marking its fourth consecutive quarterly beat. I had no doubt in my mind Peter, when that crash happened that Dollar General will come surging back revenue of dollars 10.65 billion edge passed the 10.6 billion consensus despite 4.6% year over year growth. Gross margin climbed 110 basis points to 29.9% from higher inventory markups and lower shrink. Operating income jumped 31.5% to 425.9 million. CEO Todd Vassos announced 4,885 real estate projects planned for fiscal 26. Did you hear that number, Peter? 4,885 actual real estate projects. Same store sales rose by 2.5%. Driven by pricing power and a shift towards higher margin categories. The company's pushing customers to a zero sugar beverages and premium packaging. Now let's look at dollar tree. Their Q3 told a messier story. Revenue of 4.75 billion missed the 4.79 billion estimate despite 9.4% year over year growth. Double Dollar General Space adjusted earnings of $1.21 per share beat the $10 estimate. But gross margin expanded only 40 basis points. So 35 do 5.8% operating margin declined 40 basis points to 7.2%. Not a good one there, Peter. Decline in operating margin even as revenue accelerated. Same store sales of 4.2% beat Dollar General's 2.5%. But margin compression suggests growth came at a cost. So what's the point? CEO Mike Creedon highlighted an all time record Halloween season, emphasized the multiprice strategy with 85% of assortments. Still a $2 or less average ticket rose 4.5% indicated customers are trading up. But the operating margin decline raises questions about whether multipress expansion is sustainable without eroding profitability. I do want to remind our audience we have two episodes with $ General. One from merchandising on the other on Dollar General is actually company values. Peter and I were invited down all the way to Nashville while we were there to while we were there for Amazon at their Ads conference. Those two episodes will be released shortly. Not to be missed, we recorded one from In Store, one from Headquarters while walking the Room of Values. That's it folks. That's our take on relevant commerce happenings from so many announcements this past week we thought were meaningful and could not be passed on. For a riff, I hope you enjoyed it. Click like our post on all platforms. Follow us on LinkedIn, Instagram, TikTok and now YouTube. See you next week.
- [11:17]
A
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