A&P has sold 167 of 296 stores; all remaining supermarkets to go dark by Thanksgiving

To quote the Food Trade News, "The wind down of the once iconic Great Atlantic & Pacific Tea Company goes on and the results continue to be underwhelming."

The publications November issue reports that 167 of the 296 stores have been sold, with another 20 awaiting sales approval from the bankruptcy court. All the stores are slated to shut their doors by November 25.

The 167 stores have sold for a total of $615.7 million, and the 20 additional stores to be sold will bring in another $81 million, pending approval.  A&P has also sold inventories and pharmacy records (about $100 million between the two), and has received a $1.75 million offer from Key Foods to acquire the Food Emporium name.

Once all the stores are closed and A&P is no longer under bankruptcy protection, landlords stuck with vacant stores and no rental income will be free to market their properties (with some exceptions, as per the ongoing bankruptcy process).

So far, 71 stores have been sold to Acme, most of which have already re-opened. Stop & Shop and Key Food Stores acquired 25 and 24 units, respectively. Wakefern (13) and Best Yet (10) also bought multiple stores.

Reference: Food Trade News

C&S Wholesale wins auction for AWI

As reported in the Food Trade News last week, a U.S. Bankruptcy judge declared C&S Wholesale Grocers the winner of the auction to acquire the assets of Associated Wholesalers, Inc. (AWI), the PA-based co-operative. The bid was valued at $288.1 million, about $3.5 million more than Supervalu's runner-up bid.

The acquisition is expected to close on November 11.

Related stories:
C&S Wholesale bids to acquire AWI (9/17/14)
King and Balducci's leaving White Rose for Wakefern (10/15/14)

Delhaize may pull the plug on Bottom Dollar

Food Trade News reported in its August issue that Bottom Dollar Foods, a division of Delhaize America, "has reportedly felt enough competitive heat and is exploring the sale of its 66 stores located in Pennsylvania, Southern New Jersey and Northeast Ohio." 46 of the 66 stores are in the Greater Philadelphia market.

Reportedly several retailers received profile sheets in July and bids for the stores were due on August 13. In addition, Food Trade News learned that Wells Fargo is serving as Delhaize America's investment advisor.

Analysts believe that Delhaize is trying to sell all 66 stores rather than sell individual locations or groups of stores. Supervalu (Save-A-Lot) and Aldi are leading contenders.

According to information that Food Trade News obtained, all but 10 Bottom Dollar stores are leased. The stores typically have significant term remaining and rents of about $10-$12 per square foot, although they range from $1.76 (most likely a ground lease) to $26.23. Store sizes run from 16,848 to 30,352 square feet, with most closer to 20,000 square feet. Weekly sales volumes range from $103,000 to $296,800, with an average weekly volume of $156,802. 

Bottom Dollar entered the Greater Philadelphia Market in 2010, and many industry observers were skeptical. Discount operators like Aldi and Save-A-Lot were already in the market, not to mention PriceRite, dollar stores and Walmart Supercenters. 

Referencing Bottom Dollar locations, the Food Trade News story quoted a veteran merchant as saying "You get what you pay for... After seeing what their operating model was it was pretty clear that their questionable site selection would not be beneficial."

ShopRite, Giant continue to lead food retailers in the Greater Philly market

The annual Market Study issue of the Food Trade News is out, and Publisher Jeff Metzger has over 150 pages of facts and figures about the supermarket landscape from Connecticut to Delaware.

Jeff's Taking Stock column points out that many food retailers found the landscape "extremely challenging and difficult over the last 12 months." He cites overstoring, varied retail styles and formats, and a reduction in food stamp benefits as major factors. However, despite these challenges, ShopRite, Wegmans, Whole Foods, Aldi and Trader Joe's were companies he listed as "ahead of the curve."

In the Delaware Valley market - which consists of five PA counties, nine NJ counties and one DE county - ShopRite increased its lead over Giant in market share and sales for supermarkets. Acme, for many years the dominant store in the market, remained in third after a relatively solid year. Here are the top five:

1. ShopRite / PriceRite (31.89% market share; $3.5 billion in sales from 75 stores)
2. Giant / Carlisle (21.78%; $2.4 billion, 65 stores)
3. Acme Markets (19.70%; $2.1 billion, 91 stores)
4. A&P / Pathmark / Super Fresh (8.22%; $888 million, 46 stores)
5. Wegmans (5.14%; $555 million, 9 stores)

Whole Foods, Thriftway/Shop 'n Bag, Save-A-Lot, Redner's Markets and Bottom Dollar round out the top 10.

In the Philadelphia market - defined as Bucks, Montgomery, Delaware, Chester and Philadelphia Counties in PA, and Burlington, Camden and Gloucester Counties in NJ - Giant still holds the lead, but ShopRite is gaining. The remaining brands in the top five are the same as above, and numbers 6-10 are the same stores as in the Delaware Valley, although not in the same order. It should be noted that Wegmans leads the pack in sales per store at $61.9 million, followed by ShopRite ($43.2M), Giant ($36.2M), Whole Foods ($33.2M) and Acme ($24M).

When including all retailers that sell food in the eight-county Philadelphia market and ranking them by counting 100% of all store sales for supermarkets, convenience stores and drug chains, and counting comparable supermarket categories for club stores, Kmart, Target and Walmart, the list changes a bit after Giant and ShopRite.

1. Giant / Carlisle ($2.4 billion)
2. ShopRite / PriceRite ($2.1 billion)
3. Wawa ($1.6 billion)
4. Acme Markets ($1.5 billion)
5. Walmart ($1 billion)
6. CVS ($905 million)
7. Rite Aid ($843 million)
8. A&P / Pathmark / Super Fresh ($691 million)
9. Target ($523 million)
10. Wegmans ($495 million)

In Lehigh and Northampton Counties, which many would consider part of the Philadelphia market, Giant is the dominant supermarket, with Weis Markets, Wegmans, Redner's Markets and Walmart as the other major players.

If you get the chance, visit Best-Met.com and marvel at the detail with which Jeff and his team prepared the annual Market Study issue. There are stats on each food retailer, breakdowns of the leaders by individual county, and analysis of the New York and Philadelphia markets. It's food retail overload, and quite frankly, it's making me hungry.

ShopRite, Giant dominate Delaware Valley and Philadelphia market share

The annual Market Study issue, published by Jeff Metzger and friends at Food Trade News, came out last week and reported that ShopRite remained the supermarket leader in the 15-county Delaware Valley market, while Giant took over as the leader in the eight-county Philadelphia market.

"Other merchants may have opened more stores, made acretive acquisitions or achieved higher identical store sales gains," said the authors of the study in describing ShopRite's success, "but on the whole, nobody continued to protect market share, open new stores and have significant same store increases like the member/owners of Wakefern/ShopRite once again did."

Here is the list of Delaware Valley supermarket leaders*, as ranked by market share.

1. ShopRite/PriceRite - 30.08% market share
2. Giant/Carlisle - 21.74%
3. Acme Markets - 19.77%
4. A&P (Pathmark, Super Fresh, Food Basics) - 9.22%
5. Wegmans - 4.72%
6. Save-A-Lot - 3.43%
7. Whole Foods - 3.23%
8. Thriftway/Shop 'n Bag - 2.62%
9. Redner's Markets - 2.57%
10. Bottom Dollar Food (Food Lion) - 2.08%

It's interesting to note that Wegmans earned it's 4.72% share with only 8 stores, and Whole Foods earned its 3.23% share with 10 stores. In comparison, ShopRite/PriceRite has 69 stores in the market, Giant has 62, Acme has 91 and A&P has 48.

The Philadelphia market share leaders* are as follows (the market consists of Bucks, Montgomery, Chester, Delaware and Philadelphia Counties in PA, and Burlington, Camden and Gloucester Counties in NJ):

1. Giant/Carlisle - 27.88% market share
2. ShopRite/PriceRite - 23.52%
3. Acme Markets - 18.25%
4. A&P (Pathmark, Super Fresh, Food Basics) - 9.31%
5. Wegmans - 5.31%
6. Whole Foods - 3.65%
7. Save-A-Lot - 3.45%
8. Redner's Markets - 3.29%
9. Thriftway/Shop 'n Bag - 2.41%
10. Bottom Dollar Food - 2.27%

As for the retailers that have struggled over the past several years, the authors said "there was no relief in sight as the economy continued to be listless, competition remained fierce, shopper loyalty diminished and consumers in all economic strata maintained the mindset of thrift and caution."

* The lists above do not include supercenters (Walmart, Target), club stores (Costco, BJ's), drug stores, dollar stores or convenience stores. When including all retailers that sell groceries, Wawa's market share is higher than everyone else's except ShopRite and Giant in both the Delaware Valley and Philadelphia markets. Walmart, CVS and Rite Aid also fare well (top 10), and BJ's is the dominant club store in both markets.

For more detailed information, including sales numbers, lists by county and more, visit best-met.com.

Philly's fragmented market weeding out "losers"

A recent story in the Supermarket News says that Philadelphia's grocery landscape is "largely being written by its losers." And by losers Supermarket News means Genuardi's, Acme and A&P (Pathmark, SuperFresh).

Genuardi's is down to one store, and the exit of the once mighty brand set the stage for Giant to compete with ShopRite as the market's leading grocer. No one is sure yet what will happen to Acme, which is now part of the investor group led by Cerberus, and A&P continues to struggle.

Bob Gorland of Matthew P. Casey & Associates claims that no other metro area in the entire U.S. has as many chain and strong independent operators as Philadelphia, noting that every major club store and drug chain is here, not to mention "numerous price operators of all shapes and sizes."

The result is a fragmented market, with "losers" giving way to gainers like Giant, ShopRite, Wegmans, Walmart and Bottom Dollar. And the biggest opportunities ahead, according to Gorland, are for the stronger competitors to take over the weaker ones.

Below are the market share leaders for the 11-county Philadelphia market, according to Metro Market Studies, a firm based in Tuscon, AZ.

Note that this is a faulty list, as ShopRite is listed by operator, not as one brand. Last June's Food Trade News market study listed ShopRite as the clear market leader of the 15-county Delaware Valley.

Giant - 15.1%
Acme - 14.9%
Walmart - 5.9%
Pathmark - 5.6%
BJ's - 4.9%
Costco - 4.7%
Wawa - 4.6%
Wegmans - 4.0%
Brown's ShopRite - 3.6%
Zallie ShopRite - 3.1%

ShopRite, Giant tops again in Greater Philly sales

I received the highly anticipated Market Study issue of the Food Trade News last week.  As usual, there was an incredible amount of information about the supermarket industry in the PA, NJ and DE markets.

The headline was that ShopRite remains a strong leader (based on total sales) in the 55-county market area that stretches from Northern New Jersey to Central Pennsylvania to New Castle County, Delaware. Giant is a strong second, and Walmart has jumped into third. The new "big three" account for more than one third of the $49.5 billion retail food market.

In the eight-county Philadelphia market (Philadelphia, Bucks, Montgomery, Chester, Delaware, Burlington, Camden and Gloucester), ShopRite is slightly ahead of Giant, followed by three brands headed in the wrong direction: Acme, Super Fresh/Pathmark/A&P, and Genuardi's. The rest of the top 10 consists of Wegmans, Save-A-Lot, Whole Foods, Redner's Markets and Thriftway/Shop 'n Bag.

For more information than you can grasp in one sitting, check out the Market Study issue here: Food Trade News.

McCaffrey's to acquire Genuardi's in Newtown, PA

On Monday I referenced a Food Trade News story that said the Newtown, PA Genuardi's will be acquired by an independent operator rather than by Giant, as previously planned. Yesterday it was announced that the independent operator is actually McCaffrey's Market, which operates stores in nearby Lower Makefield, PA as well as East Windsor and Princeton, NJ.

Giant, which announced in January that it was planning to acquire 16 Genuardi's stores, was forced to give up the Newtown location by the Federal Trade Commission, due to its nearby store in Middletown Township.

According to McCaffrey's, the store will retain Genuardi's 103 employees and hire an additional 40-50 workers. In addition, the store will be remodeled over a four-to-five month period to transform it into a typical McCaffrey's market.

Weis Markets to close on 3 Genuardi's stores next week

I've written before about Giant's plan to take over 16 Genuardi's stores (The Genuardi's list - sold, closing and still for sale...) and Weis Markets' acquisition of three Genuardi's locations (Weis to buy three PA Genuardi's stores), but not much has been said about when all these changes will take place.

One of the first actual dates I've seen (thanks to the May issue of Food Trade News) is June 11, when Weis Markets plans to close on the Conshohocken, Doylestown and Norristown stores. According to the report, the refurbished units should reopen within a week.

In the last couple months I have also heard that the Federal Trade Commission won't allow Giant to open all 16 of the stores it originally planned to acquire from Genuardi's. And last week I read in the same Food Trade News issue referenced above that Giant will get 15 stores, with the Newtown, PA location going to an independent operator.

Fitch report keen on supermarkets, ShopRite named retailer of the year

According to a report from Fitch Ratings, supermarkets appear to be stabilizing after several tough years, thanks in large part to higher food prices. For the last few years, supermarkets have cut prices and increased promotions to combat increased competition from dollar stores and discounters. However, top grocery chains like Safeway, Supervalu and Kroger are now showing improving sales and margin trends as food costs have enabled them to raise prices.

According to the report, although the higher prices will be beneficial to supermarkets, other long-term challenges remain, including rising health care costs, labor rates and a continued increase in competition from discounters.

Fitch maintained a "Stable" ratings outlook on Safeway (Genuardi's) and Kroger, and a "Negative" outlook on Supervalu (Acme, Save-A-Lot).

ShopRite

In other supermarket news, Progressive Grocer magazine has named ShopRite its Retailer of the Year for 2011.

"ShopRite continues to raise the bar in one of the most frequently competitive geographic marketing territories in the country, " said Meg Major, Progressive Grocer's editor-in-chief. "Its robust growth in the face of aggressive competition, and its extraordinary industry success and local community leadership, enable the regional chain to truly stand apart in the highly competitive food industry..."

The 47-member Wakefern cooperative owns and operates more than 220 supermarkets under the ShopRite banner in Pennsylvania, New Jersey, Delaware, Connecticut and Maryland. In June, Food Trade News Publisher Jeff Metzger wrote that ShopRite posted "the first triple crown in the history of the food and drug businesses in Philly and Metro New York by establishing leadership positions in the 11 county Northern New Jersey market, the 15 county Delaware Valley market and the eight county Greater Philadelphia market."

Wegmans tops per store sales in Philly market, ShopRite and Giant also strong

I've written before about the wealth of information in the June issue of Food Trade News, which includes Publisher Jeff Metzger's annual Market Study. It's 100 pages of Elias Sports Bureau-type information; just substitute food retailers for professional sports leagues.

An interesting stat to me is sales per store. Much has been written in the last couple weeks about ShopRite overtaking Acme as the sales leader in the Philadelphia market (defined as Philadelphia, Montgomery, Bucks, Delaware, Chester, Camden, Gloucester and Burlington counties), but the overall sales leader is often a factor of how many stores each retailer has (although it should be mentioned that ShopRite has 26 fewer stores in the Philadelphia market than Acme does).

Sales per store is a telling stat. It's not surprising that Wegmans tops the list (for the period from April 1, 2010 to March 31, 2011). The stores are huge, and people routinely drive past other supermarkets to experience the superior customer service and selection. And at $62 million per store, no other food retailer is close.

It's also not surprising that ShopRite and Giant are next on the list. They are adding stores, gaining market share and succeeding, partly at the expense of Acme, A&P and Genuardi's (the "Big Three"). Average sales per store for ShopRite are close to $40 million, while Giant is just below $33 million.

The rest of the list is not so predictable. For instance, it's common knowledge that the "Big Three" have been struggling, but I wouldn't have guessed that A&P (Super Fresh, Pathmark & Food Basics) would be eighth in sales per store in the Philadelphia market. At $21.3 million per store, they are behind both Redner's Warehouse (seventh) and Whole Foods (fifth).

Here's the list:

1. Wegmans - $62 million per store (#6 in overall sales)
2. ShopRite - $39.5 million (#1)
3. Giant - $32.6 million (#3)
4. Genuardi's - $26.2 million (#5)
5. Whole Foods - $24 million (#10)
6. Acme Markets - $22.8 million (#2)
7. Redner's Warehouse - $22.3 million (#9)
8. A&P - $21.3 million (#4)
9. Thriftway / Shop 'N Bag - $11 million (#8)
10. Save-A-Lot - $7.6 million (#7)

Giant ready to open first Philly store

Giant is seeing increases in sales and market share in the Delaware Valley, and now they are preparing for the opening of their first supermarket in Philadelphia. The 74,000 square foot store will open Wednesday at 2550 Grant Avenue in Northeast Philly, and will include on-site gas and a pharmacy. It will be open 24 hours a day.

According to Giant, the store will have 275 employees, both full- and part-time.

With the new store, Giant will have 48 stores in the five-county area that includes Philadelphia, Montgomery, Bucks, Delaware and Chester counties. According to Food Trade News, these stores averaged approximately $32.5 million in sales in the last year.

ShopRite tops Acme for grocery sales leader in Philly market

I am anxiously awaiting the June issue of the Food Trade News and it's annual market study. Although I haven't received it yet, Maria Panaritis of the Philadelphia Inquirer obviously has.

According to Maria's story yesterday about the study, "ShopRite, ringing up $1.7 billion in sales across the eight-county Philadelphia region, grabbed the top spot from Acme, which has struggled to cut costs by shutting down underperforming stores and recently laid off 900 part-time employees."

Here are more market study results (thanks, Maria):

• Acme's sales dropped to $1.6 billion (from $1.8 billion in the previous 12-month period) for the period from April 1, 2010 through March 31, 2011.

Third - tenth place:

• Giant ($1.5 billion)
• A&P - Super Fresh / Pathmark ($851 million)
• Genuardi's ($734 million)
• Wegmans ($372 million)
• Save-A-Lot
• Thriftway / Shop 'n Bag
• Redner's
• Whole Foods ($192 million)

According to the study, ShopRite's ascent, along with the growth of Giant, Wegmans and Whole Foods, came at the expense of hundreds of millions of dollars that used to be spent at Acme. (Genuardi's, Super Fresh and Pathmark have closed stores and lost sales as well.)

Food Trade News - Market Study 2011

ShopRite Edges Acme in Philadelphia-area grocery sales, by Maria Panaritis

Depending on who you believe, Acme or ShopRite tops the Philly market

Supermarket News published an article yesterday that provides Supervalu's up-to-date grocery sales market share positions in 10 markets relative to a year ago. According to their numbers, Acme's sales and market share are falling in the Philadelphia region "like peppers on an overstuffed cheesesteak." The numbers are based on a study by Metro Market Studies, which defines the Philly market as including 11 counties; 1 each in Maryland and Delaware, 4 in New Jersey and 5 in Pennsylvania.

Despite their decline in sales and market share, Metro Market Studies says Acme is still the market leader, with a 16.8% share, down 0.8% from a year ago. Giant/Martin's is second, with a 12.3% share, up 1.4% from 2010. Although Wegmans and ShopRite don't show up in the article's market share chart, the story acknowledged that these strong operators are hurting Acme, just as Target and Bottom Dollar are.

But truly defining market leaders comes down to defining the markets themselves. Nearly one year ago Food Trade News published its annual market study, and Publisher Jeff Metzger reported that ShopRite surpassed Acme as the leading supermarket retailer in the 15-county Delaware Valley market, although Acme maintained a small lead in Greater Philadelphia's 8-county area. This market study holds more weight in my book, as their market definitions and overall analysis seem to be stronger. The 2011 Food Trade News market study should come out in a couple months.

Here's the Supermarket News story:
Not So Super | An analysis of 10 key Supervalu retail markets illustrates the company's struggles