Supervalu buying Unified Grocers

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Supervalu buying Unified Grocers

Post by storewanderer »

http://www.startribune.com/supervalu-to ... 419092274/

Speechless. Speechless I am.

Hard to believe Unified is so weakened that this was allowed to happen... also leaves only one wholesaler serving most of OR/WA, save for URM in Eastern Washington/Eastern Oregon...

Unified was a really low effort wholesaler in NorCal (seemed to do a little better supporting its independents in OR/WA); its lack of strong merchandising support and promotion was part of what tanked Haggen and has also helped to tank a number of independents and small regionals in NorCal who had some really good ideas (like PW in San Jose or the barely surviving Mi Pueblo in the bay area).

Now this gets interesting on private label. Unified has been buying from TopCo and all of its drug and some of its household goods are TopCo brands. Will they now be selling Supervalu Brands in these independents, and in Raleys, another large Unified customer?
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Re: Supervalu buying Unified Grocers

Post by Alpha8472 »

SuperValu brands are hit and miss. There were many TopCo and TopCare products that were very good quality. I don't know how I feel about SuperValu as it is inconsistent and full of issues.
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Re: Supervalu buying Unified Grocers

Post by pseudo3d »

Funny, about a week ago, people were talking about SuperValu getting bought out (the most likely candidate being SpartanNash, which also does business in the Midwest). This doesn't seem like it would work out all that well for SVU, especially if retailers that were using Unified decided that SuperValu was not cutting it and decided to pull out or not renew contracts, all the while ignoring the implosion of Marsh over in Indiana.
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Re: Supervalu buying Unified Grocers

Post by SamSpade »

How much did the Haggen bankruptcy hurt Unified? Also, in western Oregon and Washington, it seems like alongside Haggen being supplied by Albertsons Safeway now (one would assume) and continued loss of smaller independents in major metropolitan areas, the northwestern part of this company was probably hurting.

SuperValu's one mentioned warehouse in Tacoma must be where they were supplying the Puget Sound area IGA's (and those stores they closed down) from.

Also in terms of private label, what does this mean for Tigard, Ore. based Western Family Foods? They supply all the United stores with private label products currently, right?
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Re: Supervalu buying Unified Grocers

Post by klkla »

Definitely an interesting turn of events. On the surface SuperValu doesn't have a good performance record so it's natural to wonder how Unified's clients feel about this. But then Unified is owned by it's members so they would have to approve the deal and it must make sense to them.
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Re: Supervalu buying Unified Grocers

Post by storewanderer »

Based on how Unified is set up, I wonder if its members have been having to pay for the losses the cooperative has been experiencing over the past few years? This may explain why their Board agreed to sell. Their board has many very well seasoned grocers on it, and many long-serving members. I am confident if the Board supported this, the remainder of the membership group will support this sale of the company to Supervalu as well.

Western Family is going to be interesting to see what happens to. As it is, the drug and more recently paper/cleaning categories have been "sacrified" to TopCo brands at stores that carry Western Family. Associated Utah and Affiliated SW still carry Western Family or the Western Family Shur Fine labels but beyond them...

In SoCal, Unified did not carry much Western Family and continued to run its Springfield label down there. Some of the larger and higher volume SoCal customers of Unified like Northgate, Superior, Cardenas, etc. have their own private labels on fast moving categories and only used Springfield on slower moving categories.

For me the most interesting thing to see here will be how the private label situation is handled. Will Supervalu be bringing all of its brands out here (Essential Everyday, Equaline, Wild Harvest, etc.)? I would think part of the synergy would be consolidation of private labels... but this is a rather significant potential impact to Western Family and TopCo.

Grocery business is really tough these days...
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Re: Supervalu buying Unified Grocers

Post by SamSpade »

Western Family Foods, Oregon's sixth-largest private company, closing its doors after takeover
I'd forgotten, Topco apparently bought out Western Family in June of last year. So I suppose Topco has the most to lose in this situation.
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Re: Supervalu buying Unified Grocers

Post by storewanderer »

Yikes, I had no idea Western Family went out of business... almost as if they knew Unified was looking to sell out.

Associated Utah relies very heavily on promoting Western Family items at strong price points. It will be interesting to see how all of this impacts them. This also explains why the TopCo "Simply Done" line of paper products, wraps, foils, etc. recently started showing up at Associated Utah customers (and at Raleys...). I suspect the Western Family label will be sailing off into the sunset in the coming years.
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Re: Supervalu buying Unified Grocers

Post by marshd1000 »

I know with the pre expansion Haggen, Unified provided Haggen with Haggen's own brands, Western Family and Topco. I am wondering if Supervalu will do that for retailers who prefer so thing other than Supervalu's brands.

I know that URM, which is mostly in the Inland Northwest, has been a Western Family distributor. However, they have a few stores in Western Washington, although not many. But I am wondering if some independents could leave Supervalu/Unified for URM?

One store may have an easier time of sourcing groceries as they are already a dual Unified and Supervalu customer. That would be Saars Super Saver Foods. They used to be exclusively Unified. When Saars bought the White Center Albertsons, south of Seattle, there was a clause for them to buy some of their groceries from Supervalu. At that time, that was pretty much the extent of their private label. Now I see both Essential Everyday and Western Family.

The other unique situation here in Washington is IGA. Originally Supervalu was the only authorized distributor for IGA. Then Unified became a authorized IGA distributor. So now you can be in the same metro area and one IGA will be on Unified's IGA program and the other will be on Supervalu's. So that may make things more consistent, ad-wise!
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Re: Supervalu buying Unified Grocers

Post by storewanderer »

Same situation in CA as IGA is supported by both C&S and by Unified...

I think Saars is just trying to get the best deal they can thus using both wholesalers. Now that won't be an option...
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