Stop & Shop closures

[marketreportblog]

Stop & Shop is the only mainstream supermarket I can find with actual NYC stores (none in Manhattan though), and it stretches from New York City to Boston.

If it's up for sale, who's gonna buy it? Albertsons (assuming no merger) can't buy it in whole unless it wants to divest a good chunk of ACME and Shaw's/Star Market. Kroger buying it would mean they have to deal with the same divestments or just give up the merger altogether. C&S can't buy it unless they want to pull out of the merger, too. Private investors just would probably sooner dismantle it than try to run a supermarket chain.

If they sell it it's far more likely to be split between Big Y, Market Basket, Hannaford, and Albertsons than continue as a unified chain.

It's definitely easier to picture the stores being split up among multiple operators than one group buying it whole. You have the issue of unions -- S&S is union, but Giant-PA and Hannaford are non-union making it difficult to switch any Stop & Shop stores to those divisions.

The NYC stores are the least of Stop & Shop's worries as far as sales go -- if we assume that they're to be sold as supermarkets and not as real estate, it won't be hard to find a new tenant. NYC is unique in that, for the last few decades at least, the market leaders have been independents and cooperatives. It doesn't work like other cities and those local chains and coops aren't going anywhere (in fact they're getting stronger).

I suspect ACME also isn't a problem -- the average distance between a Stop & Shop and an ACME in NJ is 6 miles, with only a handful closer than two miles together (and I'm sure there's no overlap in shoppers). They do overlap more significantly in parts of the Hudson Valley and southwestern CT, but it doesn't seem like ACME cares much about those areas. Shaw's/Star Market, meanwhile, does pose a big problem for Albertsons.

I would bet between Albertsons (/Kroger? whatever happens there), Wakefern, Big Y, Food Bazaar, Key Food, Weis, Price Chopper/Market 32, and random independents, you could split up the chain just fine. Albertsons takes most NJ stores for ACME, some MA/RI stores for Shaw's, and maybe some CT stores. Wakefern takes Long Island and some other random stores. Big Y takes big chunks of CT and MA. Food Bazaar and Key Food split New York City, some of the immediate suburbs, and whatever's left on Long Island. Weis takes some of the stores way out in western NJ that nobody wants anyway. Price Chopper/Market 32 takes a lot of the Hudson Valley and CT. And there you have it. But obviously, there'd need to be an enormous number of things that go just right to make that all happen. I'm betting nothing so dramatic will happen, but I find it hard to believe nothing will happen when the stores have so clearly declined so quickly.

And one other thing about buyers, if the stores even are for sale. In 2015, did anyone predict that ACME was going to buy 75 A&P stores? I sure didn’t, and I have to strongly doubt that any one of us was thinking that was going to happen. There could always be another random surprise — if the stores are being sold, of course.

[BillyGr]

Stop & Shop is the only mainstream supermarket I can find with actual NYC stores (none in Manhattan though), and it stretches from New York City to Boston.

If it's up for sale, who's gonna buy it? Albertsons (assuming no merger) can't buy it in whole unless it wants to divest a good chunk of ACME and Shaw's/Star Market. Kroger buying it would mean they have to deal with the same divestments or just give up the merger altogether. C&S can't buy it unless they want to pull out of the merger, too. Private investors just would probably sooner dismantle it than try to run a supermarket chain.

If they sell it it's far more likely to be split between Big Y, Market Basket, Hannaford, and Albertsons than continue as a unified chain.

C&S could buy it, since they are unlikely to get anything in the areas S&S has (as those have ONLY Albertsons brands, no Kroger), should that go through as planned.

Kroger could also buy if they wound up not buying Albertson's, for the same reasons.

Hannaford is already part of the same company, so they could just convert the stores to that name if they wanted to get rid of Stop & Shop.

Not that any of those are necessarily true.

[BillyGr]

Some of the interesting stores:

• Aberdeen, NJ - built early 00s to replace an older acquired Grand Union in the same mall, never renovated. Holy crap this place is enormous -- over 90,000 square feet. And it could just as easily be half that. They obviously can't handle a store of that size. Stock problems all over and way too much empty space. This store, which was empty and clearly does no volume at all, must be living on borrowed time with an equally massive, crazy popular ShopRite on one side and a small but exceptional independent called Livoti's on the other.

If this is the one I'm thinking it is (for some reason, I want to call it Matawan instead of what it is supposed to be), that is, in fact as you say built to replace the GU they acquired.

At the time they built that, the ShopRite across the street was still a very old, small store and they were in the process of building their current store to replace it in the parking lot (making it hard to park for the old store).

Not sure when that Livoti's entered the area, but it makes sense that S&S may have been busier when the ShopRite was still a small store (or at least they figured it would have been because of that).

[pseudo3d]

Stop & Shop is the only mainstream supermarket I can find with actual NYC stores (none in Manhattan though), and it stretches from New York City to Boston.

If it's up for sale, who's gonna buy it? Albertsons (assuming no merger) can't buy it in whole unless it wants to divest a good chunk of ACME and Shaw's/Star Market. Kroger buying it would mean they have to deal with the same divestments or just give up the merger altogether. C&S can't buy it unless they want to pull out of the merger, too. Private investors just would probably sooner dismantle it than try to run a supermarket chain.

If they sell it it's far more likely to be split between Big Y, Market Basket, Hannaford, and Albertsons than continue as a unified chain.

C&S could buy it, since they are unlikely to get anything in the areas S&S has (as those have ONLY Albertsons brands, no Kroger), should that go through as planned.

Kroger could also buy if they wound up not buying Albertson's, for the same reasons.

Hannaford is already part of the same company, so they could just convert the stores to that name if they wanted to get rid of Stop & Shop.

Not that any of those are necessarily true.

Hannaford is difficult because of the union/non-union divide. Kroger could buy up the entire non-Food Lion Ahold Delhaize chain without problems (except for the Harris Teeter/Giant issue), so no issue there. C&S' financial situation is questionable and could be done only if they drop the merger issue. Plus, one of the things that they're being grilled on the merger situation is keeping store chains--they dropped the ball on Grand Union and Bruno's years ago.

[BillyGr]

C&S could buy it, since they are unlikely to get anything in the areas S&S has (as those have ONLY Albertsons brands, no Kroger), should that go through as planned.

Kroger could also buy if they wound up not buying Albertson's, for the same reasons.

Hannaford is already part of the same company, so they could just convert the stores to that name if they wanted to get rid of Stop & Shop.

Not that any of those are necessarily true.

Hannaford is difficult because of the union/non-union divide. Kroger could buy up the entire non-Food Lion Ahold Delhaize chain without problems (except for the Harris Teeter/Giant issue), so no issue there. C&S' financial situation is questionable and could be done only if they drop the merger issue. Plus, one of the things that they're being grilled on the merger situation is keeping store chains--they dropped the ball on Grand Union and Bruno's years ago.

Not sure why people keep saying that - they didn't "drop the anything" with Grand Union!

They bought out all the stores to keep them as they were owed for supplying them pre-bankruptcy (which, if someone else bought them, would just "go away" and never be repaid).

They then turned around and sold off any of them that someone would pay an appropriate amount for - preferably to others that they supplied (which, as I remember at that time included Stop & Shop), so that they would get both the profit for selling the store AND the ongoing money for being the supplier.

When that was not possible, they took the deal to sell the store off (to chains like Hannaford and Price Chopper locally), so they got some money back beyond what they spent for the chain (which helped offset the amounts due from GU).

Finally, those that had an advantage (often being the only store in a town) they kept and ran FOR 10 YEARS, to keep those ongoing profits coming in (and, they also used them as a way to sell off items that needed to go, such as short-dated items - you often saw other store brands in there that they were also suppliers for). Then finally sold them to Tops when that was advantageous (which is likely why they were given first option to get back the few that had to be divested with the Tops/Price Chopper parent company formation).

[pseudo3d]

C&S could buy it, since they are unlikely to get anything in the areas S&S has (as those have ONLY Albertsons brands, no Kroger), should that go through as planned.

Kroger could also buy if they wound up not buying Albertson's, for the same reasons.

Hannaford is already part of the same company, so they could just convert the stores to that name if they wanted to get rid of Stop & Shop.

Not that any of those are necessarily true.

Hannaford is difficult because of the union/non-union divide. Kroger could buy up the entire non-Food Lion Ahold Delhaize chain without problems (except for the Harris Teeter/Giant issue), so no issue there. C&S' financial situation is questionable and could be done only if they drop the merger issue. Plus, one of the things that they're being grilled on the merger situation is keeping store chains--they dropped the ball on Grand Union and Bruno's years ago.

Not sure why people keep saying that - they didn't "drop the anything" with Grand Union!

They bought out all the stores to keep them as they were owed for supplying them pre-bankruptcy (which, if someone else bought them, would just "go away" and never be repaid).

They then turned around and sold off any of them that someone would pay an appropriate amount for - preferably to others that they supplied (which, as I remember at that time included Stop & Shop), so that they would get both the profit for selling the store AND the ongoing money for being the supplier.

When that was not possible, they took the deal to sell the store off (to chains like Hannaford and Price Chopper locally), so they got some money back beyond what they spent for the chain (which helped offset the amounts due from GU).

Finally, those that had an advantage (often being the only store in a town) they kept and ran FOR 10 YEARS, to keep those ongoing profits coming in (and, they also used them as a way to sell off items that needed to go, such as short-dated items - you often saw other store brands in there that they were also suppliers for). Then finally sold them to Tops when that was advantageous (which is likely why they were given first option to get back the few that had to be divested with the Tops/Price Chopper parent company formation).

You can argue that Grand Union Family Markets was only supposed to be a temporary arrangement to satisfy Grand Union's debt and make some money off the side, and was operated like an independent, not a subsidiary that happened to be owned by C&S, and the same thing with Bruno's as well. Had C&S held onto those chains they could create a better claim on being able to assume Albertsons/Kroger stores.

[veteran+]

Hannaford is difficult because of the union/non-union divide. Kroger could buy up the entire non-Food Lion Ahold Delhaize chain without problems (except for the Harris Teeter/Giant issue), so no issue there. C&S' financial situation is questionable and could be done only if they drop the merger issue. Plus, one of the things that they're being grilled on the merger situation is keeping store chains--they dropped the ball on Grand Union and Bruno's years ago.

Not sure why people keep saying that - they didn't "drop the anything" with Grand Union!

They bought out all the stores to keep them as they were owed for supplying them pre-bankruptcy (which, if someone else bought them, would just "go away" and never be repaid).

They then turned around and sold off any of them that someone would pay an appropriate amount for - preferably to others that they supplied (which, as I remember at that time included Stop & Shop), so that they would get both the profit for selling the store AND the ongoing money for being the supplier.

When that was not possible, they took the deal to sell the store off (to chains like Hannaford and Price Chopper locally), so they got some money back beyond what they spent for the chain (which helped offset the amounts due from GU).

Finally, those that had an advantage (often being the only store in a town) they kept and ran FOR 10 YEARS, to keep those ongoing profits coming in (and, they also used them as a way to sell off items that needed to go, such as short-dated items - you often saw other store brands in there that they were also suppliers for). Then finally sold them to Tops when that was advantageous (which is likely why they were given first option to get back the few that had to be divested with the Tops/Price Chopper parent company formation).

You can argue that Grand Union Family Markets was only supposed to be a temporary arrangement to satisfy Grand Union's debt and make some money off the side, and was operated like an independent, not a subsidiary that happened to be owned by C&S, and the same thing with Bruno's as well. Had C&S held onto those chains they could create a better claim on being able to assume Albertsons/Kroger stores.

I concur regarding C&S.

There is not one thing I like about this company and for them to be involved in any takeover of a large number of stores like this hellish merger proposes is just inane!

[storewanderer]

I concur regarding C&S.

There is not one thing I like about this company and for them to be involved in any takeover of a large number of stores like this hellish merger proposes is just inane!

Here is something to like about C&S: their taking over and continuing to operate what Fleming was running in California made it so California (also Hawaii, Guam, etc.) at least has two grocery wholesalers operating in the market to provide at least a little competition to independents in the areas. While C&S doesn't supply much in SoCal, they do supply some stores. With as terrible as it is in CA for independent grocers due to outrageous product costs, I have to assume it would be even worse (hard to imagine how that would be possible though) had C&S not kept operating the former Fleming stuff in CA.

What bothers me is C&S needs some kind of loan to buy the divests. If they were doing an all cash buy I may have a different opinion.

Also too many times they seem to act as a "trash can" of sorts to buy a pile of assets then quickly spin them to multiple other parties.

[veteran+]

I concur regarding C&S.

There is not one thing I like about this company and for them to be involved in any takeover of a large number of stores like this hellish merger proposes is just inane!

Here is something to like about C&S: their taking over and continuing to operate what Fleming was running in California made it so California (also Hawaii, Guam, etc.) at least has two grocery wholesalers operating in the market to provide at least a little competition to independents in the areas. While C&S doesn't supply much in SoCal, they do supply some stores. With as terrible as it is in CA for independent grocers due to outrageous product costs, I have to assume it would be even worse (hard to imagine how that would be possible though) had C&S not kept operating the former Fleming stuff in CA.

What bothers me is C&S needs some kind of loan to buy the divests. If they were doing an all cash buy I may have a different opinion.

Also too many times they seem to act as a "trash can" of sorts to buy a pile of assets then quickly spin them to multiple other parties.

I do not like them operating retail stores.

Stick to wholesale and work harder to improve THAT. Felt the same way about Fleming operating retail...........disaster.

[storewanderer]

I concur regarding C&S.

There is not one thing I like about this company and for them to be involved in any takeover of a large number of stores like this hellish merger proposes is just inane!

Here is something to like about C&S: their taking over and continuing to operate what Fleming was running in California made it so California (also Hawaii, Guam, etc.) at least has two grocery wholesalers operating in the market to provide at least a little competition to independents in the areas. While C&S doesn't supply much in SoCal, they do supply some stores. With as terrible as it is in CA for independent grocers due to outrageous product costs, I have to assume it would be even worse (hard to imagine how that would be possible though) had C&S not kept operating the former Fleming stuff in CA.

What bothers me is C&S needs some kind of loan to buy the divests. If they were doing an all cash buy I may have a different opinion.

Also too many times they seem to act as a "trash can" of sorts to buy a pile of assets then quickly spin them to multiple other parties.

I do not like them operating retail stores.

Stick to wholesale and work harder to improve THAT. Felt the same way about Fleming operating retail...........disaster.

Fleming retail was very terrible and Supervalu Retail was questionable but had some high points before Albertsons and then once they got Albertsons their entire situation turned into total disaster.

Homeland was AWG Retail and was also quite poor, though that was bought out of bankruptcy to keep the supply business. Then they added some former Albertsons units to Homeland in OKC but gave the TUL ones to other AWG customers to run (many of those didn't last; some are Homeland now). They started making improvements to Homeland (actual store remodels- good remodels) before they converted it to "employee owned." But Homeland would be out of business had AWG not taken it over when they did.

AFS Utah Retail has been problematic with a fair amount of store closure activity out of an otherwise strong wholesaler. The former Albertsons units/Fresh Market venture was a significant mess for them. Piecemeal purchases of random independents Dan's/Dick's/Lins/Maceys seems to have gone somewhat better for them.

URM Stores (Rosauers/Super One/URM Cash & Carry in WA/ID/OR/MT) seems to have a pretty strong retail operation going.

Historically I agree these wholesalers are not good at retail. Especially going to 400 stores many in territories they do not even have wholesale operations in to speak of... just. no. ..