Brookshire Brothers buys 25 store retailer

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wnetmacman
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Brookshire Brothers buys 25 store retailer

Post by wnetmacman »

According to Chain Store Age today, Lufkin, TX based Brookshire Brothers (not to be confused with Tyler-based Brookshire Grocery, but more about that later) has purchased David's Supermarkets, based in Grandview, TX. David's operates 25 stores along the I-35 corridor south and east of Dallas/Fort Worth under the names David's and Pecan Foods.

To the grand majority of you, this is not significant in any way. But to those who know Brookshire history, this is huge.

Brookshire Grocery and Brookshire Brothers (BGC and BB) both began in Lufkin in 1921. There were stores in Lufkin, Tyler and throughout East Texas. In 1939, Wood T. Brookshire took the Tyler stores and formed BGC, with the remaining stores going to BB. Through a 75 year gentleman's agreement, neither has operated stores in towns where the other operates. Militantly. I lived in a small town where if we went north, we had Brookshire's, and south we had Brookshire Brothers.

With this purchase, that will change, because at least 8 David's stores operate in towns where BGC already has a presence.

To be fair, both companies have stores under multiple names:

BGC: Brookshire's (full line supermarket), Super 1 Foods (upscale warehouse), Ole' Foods (Hispanic) and Fresh by Brookshires (Upscale Whole Foods-style knockoff)
BB: Brookshire Brothers (full line) and B&B Foods (supermarkets in small towns), plus Tobacco Barns and convenience stores.

Never since 1939 has this happened. While I suspect most of these stores will be B&B, as they are in small towns, I can't help but wonder what this means for this 75 year agreement. Neither faction of the Brookshire family likes the other. However, BB has not been controlled by the Brookshire family in some time, where BGC is still run by its namesake family.

Thoughts on this?
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Re: Brookshire Brothers buys 25 store retailer

Post by KrogerTexas »

This purchase was a huge event for the Brookshire/Brookshire Brother territory as it has been a gentleman's agreement for many years.

I think that since Brookshire Brothers bought and existing chain that happened to have stores in several towns where Brookshire's operated I don't think that will end the agreement. Both companies need to focus on other competition rather than one and other and neither of them would win a war between one and other.
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Re: Brookshire Brothers buys 25 store retailer

Post by pseudo3d »

With the news that Brookshire's wants to sell out, makes me wonder if Brookshire Brothers can "re-unite" the two chains. Despite interested sharks circling the waters (Kroger, Albertsons, H-E-B), Brookshire's wanted to retain an identity, which it couldn't really do with the three.
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Re: Brookshire Brothers buys 25 store retailer

Post by BillyGr »

In 1939, Wood T. Brookshire took the Tyler stores and formed BGC, with the remaining stores going to BB. Through a 75 year gentleman's agreement...

If I do that math correctly, 1939 + 75 = 2014, which means said agreement has ended as of last year? Thus overlapping stores would no longer be an issue?
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Re: Brookshire Brothers buys 25 store retailer

Post by wnetmacman »

BillyGr wrote:If I do that math correctly, 1939 + 75 = 2014, which means said agreement has ended as of last year? Thus overlapping stores would no longer be an issue?
75 years based on the original post in 2014. It's an ongoing agreement.
pseudo3d wrote:With the news that Brookshire's wants to sell out, makes me wonder if Brookshire Brothers can "re-unite" the two chains. Despite interested sharks circling the waters (Kroger, Albertsons, H-E-B), Brookshire's wanted to retain an identity, which it couldn't really do with the three.
Don't wait on this. BB and BGC have a lot of bad blood between them. The members of the Brookshire family still control BGC (for now) and I wouldn't expect the smaller BB to buy out BGC. Even with the David's purchase, BB is still smaller. I wouldn't see them buying BGC. You're right, however, that the combination would probably be the best bet of BGC keeping their image afloat, unless the buyer was Albertsons and they did so in the same manner as they did United Texas. I wouldn't see that happening either, as the people of Tyler don't think much of Albertsons, as they've been abandoned on their behalf three times (the Skaggs store never became Albertsons; a newer store is now a BGC-owned Super 1 foods, and a former Tom Thumb Albertsons store is now a Walmart Neighborhood Market after the LLC couldn't make it work).
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Re: Brookshire Brothers buys 25 store retailer

Post by pseudo3d »

Realistically, if BGC sells out to another operator, it will be either be some investor group or perhaps AWG.
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Re: Brookshire Brothers buys 25 store retailer

Post by wnetmacman »

pseudo3d wrote:Realistically, if BGC sells out to another operator, it will be either be some investor group or perhaps AWG.
AWG is much like Supervalu is in most areas; a distributor. AWG isn't really an operator, but a supplier. They do have 'package' store models they license, but the operator runs it themselves.

BGC does have a relationship with AWG, but I believe the only reason AWG would even be interested is to get BGC's distribution capacity. With 2 DC's, they become quite lucrative to any distributor like AWG. AWG has multiple warehouses; the closest to Tyler being in Fort Worth. I think that'd be too close to operate profitably. Their Monroe DC is small in comparison; all it would do is fill a geographic gap. The closest two to Monroe are in Memphis and Pearl River, LA (a new location for them; it largely serves Rouses).

Sliding back to topic here:

BGC has 150 stores spread over three states (AR, LA and TX).
BB has 99 stores in 2 states, mostly TX but about 8 in LA.

Just location-wise, that's 1/3 smaller than BGC. I don't think they could afford a merger unless BGC approached them. There would be almost no store loss, however, owing to the agreement they've had. Only the David's stores would have to change.
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Re: Brookshire Brothers buys 25 store retailer

Post by storewanderer »

I don't think AWG has any corporate stores anymore after they ESOPed Homeland/United-OK. Of course, AWG did not exactly want Homeland but they saved it from a Chapter 7 bankruptcy and from the looks of it managed to stabilize it. Fun trivia is Homeland has NEVER built a store of its own. All are former somethings. Mostly Safeways or Albertsons.
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Re: Brookshire Brothers buys 25 store retailer

Post by pseudo3d »

storewanderer wrote:I don't think AWG has any corporate stores anymore after they ESOPed Homeland/United-OK. Of course, AWG did not exactly want Homeland but they saved it from a Chapter 7 bankruptcy and from the looks of it managed to stabilize it. Fun trivia is Homeland has NEVER built a store of its own. All are former somethings. Mostly Safeways or Albertsons.
Apparently, the Minyard Sun Fresh Market stores are AWG-owned (the divestment list mentioned them by name, not the owners of the regular Minyard stores), but as I mentioned in another post, AWG was one of the Albertsons distributors.
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Re: Brookshire Brothers buys 25 store retailer

Post by wnetmacman »

pseudo3d wrote:Apparently, the Minyard Sun Fresh Market stores are AWG-owned
Actually, AWG bought them to sell to the current Minyard's owner. It's easier to bid when you have deeper pockets, which Minyard currently does not.
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