Stop & Shop closures

[pseudo3d]

I found that during the pandemic, Stop & Shop's market share slipped by 1.1 percent, with the other Ahold Delhaize banners gained market share (they didn't have numbers for Giant-MD other than it being positive, but Food Lion went up 1.8, Giant-PA went up by 0.5, Hannaford went up by 0.5), blaming the loss in not being able to work on a "really aggressive remodeling program".

I expect another earnings report would come in May. If the news coming out of Stop & Shop is really bad and continuing to deteriorate, would they try to hurry and get it off the books before the earnings report, or break the bad news then?

One of the reasons I suspected something bigger might be up is that rather than giving a stock reply about improving customer experience and lowering prices and all the usual stuff, details on Stop & Shop are said to be announced in May along with that earnings report. That to me sounds ominous, although it's hard to tell tone from that article. I can't tell what exactly that means or if it's a complete nothing (like they'll just announce updates on the remodel program or something).

As for the sales, I did a quick analysis of the market share for Stop & Shop based on Food Trade News reports (see here for the latest one). My conclusion: Stop & Shop's market share is declining steadily in the NYC area. But it's far from a precipitous drop, and the change in some areas are almost imperceptible.

Metro NY Market

• 2018 market share 19.23%

• 2019 market share 18.73%

• 2020 market share 18.36%

• 2021 market share 17.90%

• 2022 market share 17.26%

• 2023 market share 16.54%

Long Island

• 2018 market share 35.25%

• 2019 market share 33.52%

• 2020 market share 33.52%

• 2021 market share 33.74%

• 2022 market share 32.67%

• 2023 market share 31.07%

New Jersey
(2018 not available)

• 2019 market share 6.81%

• 2020 market share 6.63%

• 2021 market share 6.69%

• 2022 market share 5.87%

• 2023 market share 5.73%

New York City

• 2018 market share 8.34%

• 2019 market share 8.25%

• 2020 market share 7.71%

• 2021 market share 7.52%

• 2022 market share 7.13%

• 2023 market share 6.57%

I'm assuming that roughly accounts for the drop you describe. New York City is a big drop because of store closures (or store closures because of a big drop in sales?) but Long Island is a bit concerning since that's a stronghold for them. They're still the market leader on Long Island, though. I think there is a clear trend in the wrong direction here but these numbers don't seem to show any real catastrophe. Unfortunately, I don't have any sales or market share data for any of New England.

The acquisition of King Kullen was said to have been killed by COVID-19, but it was announced in January 2019. A month later, Stop & Shop workers went on strike, and for as short as it was, it really did a number on the chain with an estimated 10% of their customer base leaving permanently. Either the numbers coming out of Boston and New England are solid or crumbling as Long Island is.

Anyway, the article is interesting. They can point to Food Lion's remodeling and updating process as its growth continues or at least remains stable...but they can't say "Stop & Shop is still remodeling" as the sales plummet and store conditions deteriorate, which would put the blame on remodeling making stores worse, not better, or more likely, just be seen as excuses as they try to pull a fast one on investors (Eddie Lampert pulled that for years with Sears until they went bankrupt).

But I can't see that happening without store closures (which Sears did annually until bankruptcy), and even in 2005 Safeway did the "we need to close a bunch of stores as part of our big remodeling project" move. However, store closures are never popular with anyone--investors don't like them especially if you don't have a plan, customers don't like 'em, employees don't like 'em.

With almost a third of the volume in Ahold Delhaize's stores, it would be difficult to see Ahold Delhaize doing anything dramatic with the chain, but it probably doesn't contribute a third of the profit to the chain. The idea of putting Stop & Shop on the sales block whole seems unlikely but I'm sure that we'll see closures and maybe pulling out of south New Jersey.

[ClownLoach]

I have two schools of thought here. First as I mentioned there are no accurate market share measurements. Most of these reports just take the best figures available for a chain and divide by store count to determine the average volume per store. Then they use those figures to make up market share. They're almost always wildly wrong. A perfect example once published showed Target basically doing Kroger level food business in Texas which was absolutely comical for anyone who has been there; Target's operations in Texas are amongst their worst with most stores being in bad locations and doing very little business. But because they used chain average figures which are much higher they made Target look like a food sales powerhouse. So I do not trust any of these figures claiming that there's a "margin of error" level change in sales.

Second, there is something very massively wrong with the pictures I'm seeing of Stop & Shop. This appears to be a serious management problem that allows for such empty displays. I always loved when I would ask an incompetent manager why a display was empty and they would answer "because it sold." Then you need to fill it again so you sell more! If the stores aren't doing enough business to justify ordering enough merchandise to fill the displays, then you make adjustments to scale down as we've seen struggling stores do. Remove an island in produce and condense the rest of the displays so it looks full. Remove the top shelves in meat, dairy, wherever and spread out the product. Clearly nobody with experience is giving any of that kind of direction. So there is something terribly wrong all the way to the top of that group of stores that they don't know how to fix the problems or they don't care.

The fact that the stores look like disasters, and the fact that there is ample competition in NJ makes me suspect that Ahold has given up on these stores and is going to close them down or sell them off (although not sure who would buy them unless they are sold piecemeal). I would imagine market share has plummeted and the stores are losing a fortune.

[storewanderer]

I have two schools of thought here. First as I mentioned there are no accurate market share measurements. Most of these reports just take the best figures available for a chain and divide by store count to determine the average volume per store. Then they use those figures to make up market share. They're almost always wildly wrong. A perfect example once published showed Target basically doing Kroger level food business in Texas which was absolutely comical for anyone who has been there; Target's operations in Texas are amongst their worst with most stores being in bad locations and doing very little business. But because they used chain average figures which are much higher they made Target look like a food sales powerhouse. So I do not trust any of these figures claiming that there's a "margin of error" level change in sales.

Second, there is something very massively wrong with the pictures I'm seeing of Stop & Shop. This appears to be a serious management problem that allows for such empty displays. I always loved when I would ask an incompetent manager why a display was empty and they would answer "because it sold." Then you need to fill it again so you sell more! If the stores aren't doing enough business to justify ordering enough merchandise to fill the displays, then you make adjustments to scale down as we've seen struggling stores do. Remove an island in produce and condense the rest of the displays so it looks full. Remove the top shelves in meat, dairy, wherever and spread out the product. Clearly nobody with experience is giving any of that kind of direction. So there is something terribly wrong all the way to the top of that group of stores that they don't know how to fix the problems or they don't care.

The fact that the stores look like disasters, and the fact that there is ample competition in NJ makes me suspect that Ahold has given up on these stores and is going to close them down or sell them off (although not sure who would buy them unless they are sold piecemeal). I would imagine market share has plummeted and the stores are losing a fortune.

This is how it looks to me. This looks like it is being BiLoed. But these stores sure look a lot nicer than most of the Bi Los did physically...

Then again many Bi Lo also went straight out of business after Ahold. I expect many of these Stop & Shops to go to other operators.

[buckguy]

I found that during the pandemic, Stop & Shop's market share slipped by 1.1 percent, with the other Ahold Delhaize banners gained market share (they didn't have numbers for Giant-MD other than it being positive, but Food Lion went up 1.8, Giant-PA went up by 0.5, Hannaford went up by 0.5), blaming the loss in not being able to work on a "really aggressive remodeling program".

I expect another earnings report would come in May. If the news coming out of Stop & Shop is really bad and continuing to deteriorate, would they try to hurry and get it off the books before the earnings report, or break the bad news then?

One of the reasons I suspected something bigger might be up is that rather than giving a stock reply about improving customer experience and lowering prices and all the usual stuff, details on Stop & Shop are said to be announced in May along with that earnings report. That to me sounds ominous, although it's hard to tell tone from that article. I can't tell what exactly that means or if it's a complete nothing (like they'll just announce updates on the remodel program or something).

As for the sales, I did a quick analysis of the market share for Stop & Shop based on Food Trade News reports (see here for the latest one). My conclusion: Stop & Shop's market share is declining steadily in the NYC area. But it's far from a precipitous drop, and the change in some areas are almost imperceptible.

Metro NY Market

• 2018 market share 19.23%

• 2019 market share 18.73%

• 2020 market share 18.36%

• 2021 market share 17.90%

• 2022 market share 17.26%

• 2023 market share 16.54%

Long Island

• 2018 market share 35.25%

• 2019 market share 33.52%

• 2020 market share 33.52%

• 2021 market share 33.74%

• 2022 market share 32.67%

• 2023 market share 31.07%

New Jersey
(2018 not available)

• 2019 market share 6.81%

• 2020 market share 6.63%

• 2021 market share 6.69%

• 2022 market share 5.87%

• 2023 market share 5.73%

New York City

• 2018 market share 8.34%

• 2019 market share 8.25%

• 2020 market share 7.71%

• 2021 market share 7.52%

• 2022 market share 7.13%

• 2023 market share 6.57%

I'm assuming that roughly accounts for the drop you describe. New York City is a big drop because of store closures (or store closures because of a big drop in sales?) but Long Island is a bit concerning since that's a stronghold for them. They're still the market leader on Long Island, though. I think there is a clear trend in the wrong direction here but these numbers don't seem to show any real catastrophe. Unfortunately, I don't have any sales or market share data for any of New England.

Helpful that you found actual data, which suggests a slow decline in the NYC area and a likely a failure to have much scale in NJ in the first place.

You haven't spent enough time here to know that this doesn't stop people here from predicting an apocalypse (or that matter reading too much into one good quarter) especially at a store where they don't shop. To put this in context, Giant-MD lost far more market share after Ahold merged them with S&S, but they have more or less stabilized and even recovered, since they were made more independent.

[pseudo3d]

Helpful that you found actual data, which suggests a slow decline in the NYC area and a likely a failure to have much scale in NJ in the first place.

You haven't spent enough time here to know that this doesn't stop people here from predicting an apocalypse (or that matter reading too much into one good quarter) especially at a store where they don't shop. To put this in context, Giant-MD lost far more market share after Ahold merged them with S&S, but they have more or less stabilized and even recovered, since they were made more independent.

Deteriorating conditions are one of the first warning signs of a failing business. Stop & Shop is probably still making a profit as a whole, but it's big enough that it will be brought up with financial results, and at some point, "just wait for remodeled stores" won't cut it. At this point in time, I don't believe Stop & Shop is going anywhere...well, except for the south New Jersey stores, and even then, those probably number just 10% of the store base.

[storewanderer]

Helpful that you found actual data, which suggests a slow decline in the NYC area and a likely a failure to have much scale in NJ in the first place.

You haven't spent enough time here to know that this doesn't stop people here from predicting an apocalypse (or that matter reading too much into one good quarter) especially at a store where they don't shop. To put this in context, Giant-MD lost far more market share after Ahold merged them with S&S, but they have more or less stabilized and even recovered, since they were made more independent.

Did you ever see Giant-MD Stores that looked like these Stop & Shops in terms of lack of product on the shelves?

I did- around 9 PM in a store that still had 4-5 checkouts open at 9 PM and dozens of employees working. The store was so busy it was obvious what was happening- they were hit hard all day, very busy well into the night... and they'll recover overnight into the morning to be ready for the next very busy day.

But these stores Stop & Shop look at the pictures- they are very slow, very few customers. This is not a situation like Giant-MD having stores that may look this way.

[marketreportblog]

Now, to be honest, I'm just baffled. Didn't have time to go to a lot of stores today but I was in the Morris Plains location this afternoon. Not only was it the best-run Stop & Shop I've visited in a few weeks, it was just a plain old really good supermarket. It's a converted Edwards, last renovated with the "Taste & Time" decor around 2005ish, but got a redone prepared foods/deli department around 2017 or so. The whole store was stocked absolutely full. Lots of staff around, managers on the floor, and believe it or not even plenty of customers. Every shelf of produce was full, and the rest of the store looked just as good (1, 2, 3, 4). The places with products missing mostly seemed to just be normal volume and a few areas had temporarily out of stock signs. The only really bare section was what looked like the former sock area in the HABA department, and really, if they're out of socks I'm not exactly gonna start panicking. Plus, even that area had multiple out of stock signs apologizing for the empty space. The store felt so much better-run and more professional than the others I've been seeing.

It is directly across the street from a new-ish Uncle Giuseppe's, a large Italian supermarket, and down the street from a Wegmans that's very high-volume, so maybe that has something to do with it. Still, I'm wondering if there was just maybe a chain-wide reset that I was observing over the last few weeks? Or is it just that, even in a struggling company, there are successful and well-run stores? What I saw over the last few weeks feels too unusual to be just poor management.

[pseudo3d]

Now, to be honest, I'm just baffled. Didn't have time to go to a lot of stores today but I was in the Morris Plains location this afternoon. Not only was it the best-run Stop & Shop I've visited in a few weeks, it was just a plain old really good supermarket. It's a converted Edwards, last renovated with the "Taste & Time" decor around 2005ish, but got a redone prepared foods/deli department around 2017 or so. The whole store was stocked absolutely full. Lots of staff around, managers on the floor, and believe it or not even plenty of customers. Every shelf of produce was full, and the rest of the store looked just as good (1, 2, 3, 4). The places with products missing mostly seemed to just be normal volume and a few areas had temporarily out of stock signs. The only really bare section was what looked like the former sock area in the HABA department, and really, if they're out of socks I'm not exactly gonna start panicking. Plus, even that area had multiple out of stock signs apologizing for the empty space. The store felt so much better-run and more professional than the others I've been seeing.

It is directly across the street from a new-ish Uncle Giuseppe's, a large Italian supermarket, and down the street from a Wegmans that's very high-volume, so maybe that has something to do with it. Still, I'm wondering if there was just maybe a chain-wide reset that I was observing over the last few weeks? Or is it just that, even in a struggling company, there are successful and well-run stores? What I saw over the last few weeks feels too unusual to be just poor management.

For any company, even in a declining one, there are going to be "nice" stores. Kmart and Sears had some great-looking stores (if mildly dated) c. 2009 but as time went on and stores closed and conditions continued to deteriorate, these became less and less in number until they finally disappeared altogether. Obviously S&S is not to "Sears/Kmart" levels of decline, so it's natural there are going to be nice stores.

[buckguy]

Helpful that you found actual data, which suggests a slow decline in the NYC area and a likely a failure to have much scale in NJ in the first place.

You haven't spent enough time here to know that this doesn't stop people here from predicting an apocalypse (or that matter reading too much into one good quarter) especially at a store where they don't shop. To put this in context, Giant-MD lost far more market share after Ahold merged them with S&S, but they have more or less stabilized and even recovered, since they were made more independent.

Did you ever see Giant-MD Stores that looked like these Stop & Shops in terms of lack of product on the shelves?

I did- around 9 PM in a store that still had 4-5 checkouts open at 9 PM and dozens of employees working. The store was so busy it was obvious what was happening- they were hit hard all day, very busy well into the night... and they'll recover overnight into the morning to be ready for the next very busy day.

But these stores Stop & Shop look at the pictures- they are very slow, very few customers. This is not a situation like Giant-MD having stores that may look this way.

I got to see the end of the Izzy Cohen era which was Giant at its most dominant and I'd assume close to its best. The standard was pretty high but there were stores that stood out as being poorly run. I assumed they might be being held until the end of their leases---one (Congressional Plaza) was renovated into a big box store. The other (Wheaton Plaza) was replaced with a large outpad location that still seems to be going strong many years later, so I might have been half right. In those days, they tended to saturate certain areas---the Congressional Plaza store was less than a mile from a much bigger store (Montrose Crossing) and maybe a couple miles from two other stores. They also had a bunch in lower Silver Spring and I wouldn't have been surprised if at least one was as weak as Congressional and kept to maintain their dominance.

These days, the standard is better than 15 years ago but still uneven. My closest Giant is a large store that has never quite lived up to its potential, but is always well-stocked, except for commodities that can be difficult to keep like milk and the produce could be better handled. The service departments have never done large volume and I'm surprised they haven't been reconfigured. The super high volume Columbia Heights store has had a couple renovations and a minor one that seemed to be more of a cleaning and re-org. That store competes with a high volume Target that has never been very successful with food and an Lidl that does well. I was in the soon to be closed Spout Run store in Arlington not long ago and there was nothing wrong with it besides being relatively small. They did a nice remodel of Blair Plaza several years ago which probably dates back to the 50s and once was a Super Giant and that store seems well kept. So....mostly not bad. The problem with Giant-MD is that deli and bakery have never come back to what they were pre-Ahold and those were the real jewels of the operation and did large volumes in most locations. The produce is variable, but it was never great pre-Ahold, although I think the expectations for it have risen in the DC area. They do seem to tailor stores to local areas and often have good international selections---I can find things that Whole Foods doesn't routinely carry in my losest store, but not necessarily in others.

The problem for S&S in NJ may simply be that they've never figured out how to compete there and lack the scale to help them figure that out. It also sounds like they built quite a bit on an Edwards infrastructure, which was a different kind of format. They're not the only ones who tried and failed in NJ repeatedly----Acme made a large investment in northern NJ in the late 90s/early 2000s and wound up closing a lot of the stores. I think they'd previously made a big effort in the 50s/60s and largely pulled out in the 70s. Acme doesn't have a strong reputation now and they probably didn't then, either. A&P stayed in the market for decades, but had many old, low volume stores that probably had cheap leases; their reputation was that of a very uneven operator---which had been their reputation almost everywhere.

[marketreportblog]

Here's my latest update. I haven't been spending my free time visiting Stop & Shop stores lately, but I've gone to a few. Again, wildly inconsistent. Some have been great, some terrible. Are they doing a really major reset without telling anyone? Are they truly struggling to fill the stores with stock? Regardless, some of the problems seem to have been fixed, or at least improved.

• Morris Plains - this store looks amazing. Produce was great, grocery was well-stocked (and what wasn't is clearly a result of normal volume). Some sections were close to perfect. The only empty area was what appears to have previously been socks, but first of all, that's obviously a reset, and second, it was clearly labeled. This store is across from Uncle Giuseppe's, a local chain of Italian specialty supermarkets, and between a Wegmans and a very popular ShopRite.

• West Caldwell - not amazing, but definitely way better. The empty produce cases have been reset to remove the loose organic vegetables, which obviously weren't selling. The rest of produce looked great. HABA was great, too. This store and several others have gotten new self-checkouts (before here).

• Clifton Broad St - another amazing one. Clearly very busy. Pristine and fully stocked. HABA was mostly good, but lotion was thin. Couple of empty endcaps or other displays, but they were clearly being filled actively when I was there -- very different from what I've seen elsewhere.

• Clifton Commons - very good, busy but definitely not as high-volume as Broad Street. Produce pretty well-stocked but I got the feeling it doesn't quite move as fast as it should (wilted greens and herbs, wrinkly bell peppers -- although I've seen those issues at multiple stores). Plus, it looks like they've cut the selection back with one row filled with an absurdly large amount of apple cider.

• Bloomfield - yikes. Seems to do meh volume. Produce was well-stocked enough but all on the older side. Big empty spaces in deli, meat, grocery, and deodorant/shaving. Everything related to toothpaste/toothbrushes was decimated. A dairy endcap was empty, excusable on its own (plus I see stock probably waiting to go out there), but the rest of the aisle looked pretty similar. Here's all my pictures. I just can't come up with any reasonable explanation, unless the store is about to undergo a major reset (but wouldn't that have happened with the renovation around two years ago?). And I'm sorry, that's not normal sales volume. This store would have to sell the most toothpaste of any store ever for that to be the case. High-volume SuperFresh around the corner, but very different customers, I'd bet.

• Brooklyn/Avenue Y - back to amazing! Large, obviously very high-volume, well-maintained. Grocery was really well-stocked. But still random things were out of stock -- cut fruit and HABA, plus one empty freezer in the kosher department (although that might be a maintenance thing...which is its own problem).

• Brooklyn/Cropsey - yikes again. Acquired Pathmark, really not in good shape. Meat was very rough for no apparent reason. Dairy was similar. For comparison, here's a Key Food just south on Coney Island. The Stop & Shop seems busy enough but maintenance is clearly subpar, it still feels like a Pathmark (outside too). You can see they're not taking care of the outside either. It feels like this one might be likely to close regardless of whether the chain is in trouble overall.

So my rough assessment is that Stop & Shop is probably struggling, and it's obvious they are having trouble with certain specific parts of running their stores. But I don't think there's any impending doom, even though I think more store closures are probably coming down the pike. As we've said, even a struggling chain has good stores, which is definitely apparent from these few I visited. From my observations, it looks like the really bad stores outnumber the really good stores, but there's a vast sea of thoroughly mediocre stores that appear to keep them all afloat.