The stars of the business world continued to align against Blue Apron Holding Inc (NYSE:APRN) today. Just days after Walmart said it would begin offering meal kits in its stores, Weight Watchers (NYSE:WTW) now plans to offer its own pre-packaged meals that will be sold in grocery stores.
Blue Apron shares slid over the course of the day on the news, trading down 15.5% as of 3:26 p.m. EST.
In an attempt to leverage a surge in its membership, Weight Watchers is launching the new "quick-prep" kits to add another revenue stream. The move by the weight-loss specialist, which is known for selling branded products in grocery stores, is the latest evidence that meal kits are becoming commodity items with little customer loyalty. Once they're readily available in grocery stores, customers can avoid the need to order them in advance. Also today, shares of Kroger, the nation's largest traditional supermarket chain, dove as the company posted weak earnings guidance for 2018, a further sign of increasing industry competition.
Blue Apron CEO Brad Dickerson recently said he believed that customer acquisition costs were only going to get more expensive as more competitors enter the field, and this week's developments underscore that likelihood. Blue Apron stock was approaching $2 a share at the end of the session, 80% below its IPO price last June. The market seems to have little faith that it can turn its business around.
The company's best bet may be to partner with a larger supermarket chain or consider selling itself, as revenue growth has slowed significantly and the company is losing money.