UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Delaware, Maryland, Pennsylvania, Virginia, and West Virginia. No non-grocery posts.
mjhale
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Re: UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by mjhale » December 9th, 2019, 6:43 pm

cw06 wrote:
December 8th, 2019, 3:26 pm
The Shoppers location on US 1 in Arlington seems to be that kind of high traffic/high profile spot that an operator looking to make a debut would jump at. With Amazon HQ2 being developed right there, the number of customers with disposable income will only increase. Having spent a few years working for Harris Teeter in the DC area, I can tell you that Arlington stores make obscene amounts of money. It wouldn't surprise me if a high-end operator has already quietly inked a deal to take over the lease.
Are you talking about the Potomac Yards Shoppers location? That has always been what I thought was a high volume store. It was one of the few 24 hour Shoppers locations until they got rid of all of the 24 hour stores. Supervalu recently did a complete gut job renovation on the store. They are calling it something like Shoppers Market or Shoppers Marketplace. They downsized the store but they ended up with a very nice, upscale store and one I would shop at regularly if I was in the area. Until the Harris Teeter opened a few blocks further north on US 1 (and in Arlington itself - the border is Four Mile Run) the only competition was an old worn out Giant down in Del Ray. Giant has since moved to a modern store and the old Giant was taken over by Aldi. I am surprised that the Potomac Yards Shoppers was not on the list of stores sold at this point. But then again it would not be a fit for current batch of buyers. This is one of the locations I could see Publix taking a stab at with Amazon HQ2 coming soon and all of the new upscale development in the area. I think it would be a good match for the center which includes Target and a lot of other big retailers as this is one of the only large box developments in the area.

mjhale
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Re: UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by mjhale » December 9th, 2019, 7:07 pm

buckguy wrote:
December 8th, 2019, 8:19 am
The locations, esp. in the DC area are a very poor fit for Publix. Other than the store near White Flint, they really have no locations in areas that would work for Publix and even that location is away from the areas where Publix's demographic lives.. Pharmacies are no longer the profit centers they once were with competition from mail order and the rise of generics. I think they're pretty irrelevant to who buys the remaining stores.

Giant's unwillingness to assume debt is interesting because it means that the remaining stores will probably go in small clusters or perhaps as individual sales. At least one of the stores being sold has been downsized and that combined with the reported talks with Lidl make me think that Lidl will pick up several locations if they are relatively small or easily subdivided. The large number of Baltimore area stores make me think Shop-Rite or one of their operators might be in the mix as they have been expanding there. There might be a few places that go to ethnic operators, most likely in northern Virginia or in the Catonsville area.

Safeway has been investing lately in DC, not in a big way but with a variety of locations both new (Rockville) and existing Rosslyn. I doubt they would be willing to assume debt and, like Giant, would be candidate for a small number of stores.
If Shoppers was the entry vehicle Publix was going to use to get into the DC market it doesn't seem like they are going to use it beyond a few cherry picked locations. I agree with you that many of Shoppers locations are not suitable for the demographics that Publix is after. My feeling is that either Publix isn't ready to come into the DC area or they have some other plan if they are still interested. I'd like to see Publix make a run at DC but at the same time especially Northern Virginia has so much competition that I'm beginning to wonder exactly where Publix would fit into the mix.

Is there any chance that ShopRite would make a run at the DC area via a few of the for sale or now closed Shoppers locations? I've always felt that one of the better ShopRite operators if they were interested could run a solid mid-level operation that would be right where Giant and Safeway are now. I travel a lot to NJ and NY. I have been in multiple very nice ShopRite stores that I think would do well in the solidly middle class areas of DC. There are already PriceRite locations in the DC area so perhaps that might be another option that could be used by Wakefern if there was any interest from corporate or an operator.

Lastly regarding Safeway I just don't see them doing much of anything. Safeway stores around me are wildly inconsistent and as others have said else on this board very to extremely to obscenely expensive. The Safeway near me is OK but nothing at all special. The shopping center it is in is going through hearings for a complete redevelopment. From all of the plans I've seen Safeway is still included but I wish they would just close the thing down and open a Giant or a grocery owned by someone who can actually run a consistently good store. I remember my parents joking when I was young that you had to take out a loan to shop at Giant but you had to take on the national debt to shop at Safeway. Some things never change....

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Re: UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by Knight » December 9th, 2019, 8:59 pm

mjhale wrote:
December 9th, 2019, 7:07 pm
If Shoppers was the entry vehicle Publix was going to use to get into the DC market it doesn't seem like they are going to use it beyond a few cherry picked locations. I agree with you that many of Shoppers locations are not suitable for the demographics that Publix is after. My feeling is that either Publix isn't ready to come into the DC area or they have some other plan if they are still interested. I'd like to see Publix make a run at DC but at the same time especially Northern Virginia has so much competition that I'm beginning to wonder exactly where Publix would fit into the mix.
"How could Publix expand into the Washington, District of Columbia, area?" should be the subject of another thread. Publix needs to focus on increasing store count in its Charlotte Division (i.e. North Carolina, South Carolina, northeast Tennessee, Virginia), opening its Greensboro, North Carolina, distribution center, and further expanding in Virginia outside the Richmond area.

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Re: UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by pseudo3d » December 10th, 2019, 7:22 am

storewanderer wrote:
December 7th, 2019, 11:26 am
Knight wrote:
December 7th, 2019, 8:47 am
After the transactions are finalized, twenty-six Shoppers stores will remain open and for sale. I doubt Shoppers will exist past 2020.

Cub Foods could be attractive for a supermarket wanting to expand into Minnesota.
A few years ago, I'm sure Albertsons would have bought Cub. They seem to have moved past the "let's buy everything in sight" idea for now with the management changes and seem to be focused more on remodels and new stores. But Cub is actually a good quality asset, facing a major headwind from Hy Vee.

Kroger at this point I am really not sure how they would do with Cub, given how Kroger is operating most of its divisions.
With Kroger doing some major homogenization and not for the positive, along with divesting "non-core assets" (Lucky, gas stations), I can't see them with Cub Foods. Albertsons, on the other hand, could theoretically make a play for Cub, but their last major acquisition (the A&P stores) was somewhat of a disaster, and many of their divisions are already pretty anemic.

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Re: UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by BatteryMill » December 17th, 2019, 4:20 pm

This is quite a lot of news - so I'll state my opinion here. The closing round was certainly not well planned by UNFI, beginning these sales before the holiday season and ineffectively alerting employees. For following closings, they should plan the procedures better. While it seems Shoppers may be over, I hope they will make the best of their remaining time and effectively transition into other properties and/or live on. Yes, hopefully it'll include the Colossal Donuts and other assorted bakery items. :P

Out of all the closings/spin-offs, the Annapolis, Alexandria, and Manassas stores surpised me the most. The former two were extensively remodeled within the past two years to the upscale "Shoppers Market" concept. Whether that move was short-sighted by SuperValu in the midst of their gradual grocery exit, or the centerpiece of their selling efforts, we may never know. The latter store did a good volume for Shoppers standards, and while it had competition - there wasn't too much around its end. Perhaps it'll wait for another grocer to come in (Publix, Safeway, relocation of Giant) or turn into something else.

I believe a news article a while ago confirmed Safeway will not purchase any SFW stores this time around. They have some decent opportunities and continue to provide union services that current employees may prefer. Though Safeway's struggles are enough to draw them away from purchasing, I admit - they should look more into current stores they own for now.

Giant-MD is slated to buy a total of 12 Shoppers stores, including the ones they have previously bought/converted since 2018. Additionally, another Shoppers closing/buyout has been quietly announced - closing sales, however, have not begun yet: https://www.bizjournals.com/washington/ ... g/424978/9

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