Blue Apron Holdings Inc. (NYSE: APRN) shares surged by 9 percent on midday Thursday after the company had announced that it will begin selling its meal kits in store later this year to bolster customer sales growth.
The New-York based company is more focused on a offering subscription-based service for its meal kits, but is now looking into selling individual kits online and even possibly in retail stores.
Blue Apron has been struggling to keep customers returning and continue sales growth, as shares have now fallen 43.2 percent alone in fiscal year 2018.
At the end of fiscal year 2017, Blue Apron reported 746,000 customers, falling down from 879,000 a year prior to that. Competitors such as Weight Watchers International (NYSE: WTW) and Walmart Inc. (NYSE: WMT) pose a threat to the company, as they offer their own type of meal kits in stores.
Amazon.com Inc. (NASDAQ: AMZN) also offers an online version of meal kits delivered to the consumer’s home. This is part of Amazon’s initiative to launch its Amazon Fresh business by offering same day delivery for fresh produce products.
Surveys have shown that consumers stray away from the subscription-based service due to the costliness and the commitment, which prompted Blue Apron Chief Executive Brad Dickerson to meet consumers demands in offering single meal kits.
“The access to consumers is much broader in this avenue than the avenue we’ve been operating in in the past,” Dickerson said in an interview.
Louise Ward, Blue Apron’s spokeswoman, said that the new initiative will draw in “different segments of customers” while also acknowledging that sales won’t always online. Ward also said the company has not outlined the plans and pricing or partners.
Blue Apron shares have fallen 76 percent since its initial public offering launch last year in June.