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

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cw06
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UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by cw06 »

TLDR: Lidl, Compare Foods, and a local operator called McKay is buying some Shopper's stores.


https://www.winsightgrocerybusiness.com ... more-close
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Re: UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by storewanderer »

Sounds like Compare and McKay will continue to use UNFI as a supplier. Are those existing UNFI clients?

I wonder if we may see the rest of Shoppers and Cub sold to the same buyer. Cub is probably a pretty good asset, dominant in MSP, but Hy Vee is going to keep eating it alive as Hy Vee expands and Cub is very vulnerable simply because there is not much other competition in MSP. Hy Vee is a really tough competitor and frankly I don't really know what Cub would need to do to beat them. Hy Vee is just too good.

Shoppers already operates in a highly competitive market with a lot of options. People will not really notice when Shoppers is gone because there are so many other options in the market.

It is always unfortunate to see a chain close like Shoppers and it does reduce competition and hurt the consumer, along with the various impacts that come from stores closing such as employee job losses, traffic declines in the shopping centers which can impact surrounding businesses, etc.
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Re: UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by Knight »

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

Post by storewanderer »

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

Post by pseudo3d »

I'm just surprised not a single store went to Safeway. Are the stores overlapping, or did UNFI not want to deal?
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Re: UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by mjhale »

pseudo3d wrote: December 7th, 2019, 1:44 pm I'm just surprised not a single store went to Safeway. Are the stores overlapping, or did UNFI not want to deal?
I'm surprised that all of the stores are going to what I would assume are non-union operators. Based on the quotes in the article the union does not seem happy about these transactions. Are the closing the stores and then selling them to avoid issues with union? If they are straight selling them does the union contract factor in here in terms of a non-union grocer taking over the stores?

As for Safeway, only a few of the Shoppers stores that are on the list that I'm familiar with have Safeway stores nearby - Annapolis, Burke and Oxon Hill. Perhaps with all the debt that Albertsons has at this point they aren't in a buying mood.

Lastly, what in the world is Lidl buying full size grocery stores for? Are they going to use half and then try to rent out the other half? I guess they are trying to get into pre-built grocery spaces to save money as they expand, also to get into areas where there isn't space to build new I'd assume.
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Re: UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by mjhale »

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.
I'm still trying to figure out who would want the remaining stores. ShopRite? Publix? Piece meal between existing grocers already in DC and Baltimore? Maybe Walmart or Target for small scale store or Neighborhood Markets in Walmart's case?
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Re: UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by storewanderer »

pseudo3d wrote: December 7th, 2019, 1:44 pm I'm just surprised not a single store went to Safeway. Are the stores overlapping, or did UNFI not want to deal?
There are still a couple dozen stores left. So maybe some of those will go to Safeway.

But consider that they already closed pharmacy a long time ago. Most full service type operators typically want a pharmacy in the store, especially when you are taking 50,000+ square foot stores which is what most of these Shoppers things are.

Safeway is rather weak in DC, and not run very well. They are a third or fourth tier operation there at best. Giant, Whole Foods, Wegmans run many circles around them and do far higher volumes. I am sure I am missing some other operators who do similar levels to Safeway if not a little better too. There is just a lot of competition... Safeway's pricing is very high compared to the other operators in the DC market and I am not really sure the Shoppers locations which skew toward lower middle class locations would take Safeway's marginal at best and poorly merchandised for the region operation and high pricing too well. Shoppers historically has run a bright clean store with a large product mix and prices at mid-market level.
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Re: UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by Knight »

storewanderer wrote: December 7th, 2019, 11:26 am Kroger at this point I am really not sure how they would do with Cub, given how Kroger is operating most of its divisions.
If Kroger was able to acquire Roundy's and focus on the midwestern United States, it should not have difficulty acquiring Cub Foods.
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Re: UNFI Makes Deals for 13 Shoppers Stores; 4 More to Close

Post by Knight »

mjhale wrote: December 7th, 2019, 10:03 pm I'm still trying to figure out who would want the remaining stores. ShopRite? Publix? Piece meal between existing grocers already in DC and Baltimore? Maybe Walmart or Target for small scale store or Neighborhood Markets in Walmart's case?
If Publix wants to enter the Washington area sooner than later, acquiring a quantity of Shoppers stores would get it in.
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