Vince 'Jim' Genuardi, supermarket pioneer, dead at 88

Vincent "Jim" Genuardi, who along with his brothers built the Genuardi's Family Markets supermarket chain, died earlier this month. He was 88 years old.

At its height, the Genuardi's chain had 33 stores and 7,000 employees in Pennsylvania, New Jersey and Delaware.

Genuardi's daughter, Lisa Genuardi Wilson, said her father "was part of the committee within the National Grocers Association that paved the way for beer and wine in supermarkets. He spend a lot of time way back in the late '80s in Harrisburg, fighting for the rights we have in select (grocery) stores today."

Jim Vuotto, who worked for Genuardi's for 48 years, said Genuardi "was a pioneer for using bar codes. We were also the first company where every manager in the store was food certified. That was huge."

"They were all an incredible, community-oriented family," Vuotto said. "All the brothers had their own expertise area. Jim was groceries, Charles ran produce, Joe ran frozen food, Tom ran meat, and Frank did real estate."

Acme opens Jersey Shore stores

Acme continued its recent comeback with the opening of a 50,000 square foot store in Barnegat, NJ in a location vacated by Genuardi's in 2012. Acme now has 178 stores across Pennsylvania, New Jersey, Delaware, Maryland, New York and Connecticut.

The opening in Barnegat, a Jersey Shore town, follows the opening of a store five miles away in a former Super Fresh location in Manahawkin, as well as the re-opening and expansion of Acme's store on Long Beach Island, about 11 miles away.

Last Genuardi's store closes in Audubon

The last operating Genuardi's supermarket, in the Audubon Village Shopping Center in Audubon, PA, closed on May 27. According to a store employee, the lease expired and another operator may take over in the location.

Genuardi's, once a popular chain in the Greater Philadelphia Region, was purchased by Safeway in 2001, and in recent years the stores had been closed or sold, and converted to a Giant or Weis supermarket.

Giant to close Upper Gwynedd, PA store

Giant Food announced earlier this week that it would close the Upper Gwynedd, PA location it purchased from Safeway (Genuardi's) in 2012. The associated pharmacy, located less than a mile away in North Wales, will close as well. Both closings are planned for January 24.

Giant purchased 16 area stores from Safeway in 2012. At 33,000 square feet, the Upper Gwynedd store is one of the smallest in the Giant chain. According to the company, all employees will be offered positions at nearby stores.

Report says Kroger may be disrupting Safeway-Cerberus deal

3/7/14 Update: Cerberus to merge Albertsons with Safeway in $9 billion deal

In contrast to my post on Tuesday that said Kroger may work with Cerberus to take some Safeway stores the private equity firm might not want if they were to buy Safeway (Kroger could be a player in Safeway sale), a story in The Wall Street Journal online yesterday reported that Cerberus' efforts to purchase Safeway have been complicated by Kroger's involvement.

According to the story, Cerberus, which last year purchased Supervalu's Albertsons and Acme chains, among others, had been hoping to make a deal for Safeway this week. However, Kroger, the largest supermarket chain in the country, is now considering a bid on its own for all or part of Safeway. Cerberus is still seen as the most likely buyer, as Kroger could face antitrust issues in areas where the two companies compete.

The Wall Street Journal reports that Cerberus is offering to pay about $40 per share for Safeway, which would make the deal worth approximately $9 billion.

Cerberus and Kroger recently competed for Harris Teeter Supermarkets, and Kroger emerged victorious, paying $2.4 billion for the chain.

Safeway currently operates more than 1,300 stores in the West, Southwest, Rocky Mountain and Mid-Atlantic regions. In the last two years, the company sold or closed all but one of its Genuardi's stores. Last year it sold its Canadian division and closed or sold its 72 Dominick's stores in Chicago.

Kroger could be a player in Safeway sale

According to published reports, Kroger, the largest supermarket chain in the U.S., recently approached Safeway about buying part of its operations. The reports also said that Kroger contacted Cerberus Capital Management, the private equity firm that is considered the favorite to purchase Safeway, about buying some stores that Cerberus may not want.

Cerberus led the investor group that purchased Supervalu last year. Safeway recently closed its 72 Dominick's stores in the Chicago area, sold its Canadian business, and in the last couple years sold or closed all but one of its Genuardi's stores.

Experts speculated that an arrangement between Kroger and Cerberus could help address antitrust concerns that could arise in select markets if one of the companies purchases Safeway.

Safeway confirms that it may sell

In October I wrote about a published report that claimed Cerberus was looking into a takeover of all or part of Safeway. Yesterday Safeway confirmed that discussions were taking place involving a possible sale of the company.

In a statement, the company said it "has not reached an agreement on a transaction, and there can be no assurance that these discussions will lead to an agreement..."

Last year Safeway sold its Canada and Dominick's divisions, and before that sold or closed all of its Genuardi's stores except one (Audubon, PA).

"Banner Churn" of 2013 may continue into 2014

Supermarket News published an informative year-end story about the many changes that took place this year in the food retail industry. They called it a year of "banner churn."

The article starts by pointing out that the "big three" made major moves. Kroger agreed to buy Harris Teeter, Safeway sold its Canada division and announced that its closing its Dominick's chain in Chicago (only a year after closing all but one of the company's Genuardi's stores), and Supervalu sold 877 stores - including the Albertsons and Acme chains - to an investment group led by Cerberus that includes Kimco and Philadelphia's Lubert Adler.

Regarding the Supervalu deal, Albertsons Chief Executive Robert Miller told Supermarket News that "we're in this for the long haul," and that "we have no plans to sell any of the brands."

Whether Miller is being truthful, or simply truthful for now, is yet to be seen. There are many that don't believe the company will hold on to Acme - or at least the banner's many underperforming stores - for very long.

As for the industry's future, Irene Marks and David Mell of Wells Fargo believe "consolidation and capital markets activity will remain robust well into 2014 as the grocery industry continues to evolve to suit today's eclectic, diverse and conscientious consumer."

To read the Supermarket News story, click here.

Bottom Dollar, Giant opening stores; Weis to close a store

New Bottom Dollar stores opened today in Ambler, PA and in the Germantown section of Philadelphia. These stores represent the 42nd and 43rd stores in the Greater Philadelphia Market. Bottom Dollar now operates 62 stores in PA, NJ and OH. The discount grocery chain, a subsidiary of Delhaize, is still not profitable.

Giant Food is scheduled to open on November 6 in a former Genuardi's location in Edgemont Square Shopping Center, Newtown Square, PA. The store, which has been vacant since 2010, is 43,000 SF. Giant, a division of Ahold, has about 200 stores in PA, MD, VA and WV.

Weis Markets announced last week that it will close its Pottstown supermarket in the next couple weeks due to "continuing under-performance." The 45,228 square foot store opened in 1995 and is in the same shopping center as Walmart. A new Giant opened in the last couple years less than a mile away. Despite the closure, Weis seems to be opening and renovating several stores.

 

Cerberus exploring a deal to takeover Safeway

According to a report from The Chicago Tribune, Cerberus Capital Management is exploring a deal for all or part of Safeway, the second-largest supermarket operator in the U.S. In addition, Supermarket News said this morning that according to a Reuters report, Safeway has engaged Goldman Sachs to explore a potential private equity takeover.

Safeway, which exited the Philadelphia market by selling or closing its Genuardi's stores (with the exception of one remaining store in Audubon, PA) and recently announced that it plans to exit the Chicago market by selling its Dominick's chain, just received clearance from Canada to sell its 212 stores there to Empire Co. for $5.8 billion in cash.

Earlier this year, Cerberus led an investor group that included Kimco in a $3.3 billion acquisition of a group of supermarket chains from Supervalu that included Acme, Albertsons and Jewel-Osco.

Other grocery deals completed this year included Kroger's $2.5 billion acquisition of Harris Teeter, Bi-Lo Holdings $265 million purchase of three Delhaize chains, and Spartan's acquisition of Nash Finch.

Safeway has experience with private equity, as KKR took the supermarket chain private in 1986. KKR sold its stake 13 years later and reportedly made a $7 billion profit.

According to Safeway's website, there are currently over 1,600 Safeway stores in the United States and Canada. Banners include Safeway, Vons, Dominick's, Randalls, Tom Thumb and Carrs.

Safeway to dispose of Dominick's chain in Chicago

Safeway announced last week that it plans to dispose of its 72 Dominick's supermarkets in the Chicago area. Safeway is also the parent company for Genuardi's, which recently exited the Philadelphia market (with the exception of one yet-to-close store in Audubon, PA).

Dominick's had a loss of $31.5 million for fiscal 2012, and losses are projected to increase this year. Safeway said that selling the chain will likely result in a cash-tax benefit of between $400 - $450 million that it will use to offset expenses from the recent sale of its Canadian assets.

In a separate report, Safeway said there has been interest from several parties for Dominick's, and the company seeks to exit the Chicago market by early 2014.

According to Safeway President and CEO Robert Edwards, "Everything we do is designed to maximize shareholder value, and the sale of Canada, the partial IPO of Blackhawk, and now the decision to leave Chicago demonstrates that commitment."

Giant to close Warrington, PA store

Giant announced last week that it is closing its Warrington, PA store on November 2. The store was a former Genuardi's supermarket that Giant purchased in 2010.

The 49,000 square foot store is in PREIT's Creekview Shopping Center. Co-tenants include Lowe's, Target and LA Fitness. Wegmans and BJ's Wholesale Club have stores within a half mile of the shopping center, and there is ShopRite and another Giant store 2.5 miles to the southeast.

Weis Markets CEO resigns

Weis Markets announced yesterday that CEO David J. Hepfinger has resigned as CEO "to pursue other interests." Jonathan Weis, the company's vice chairman, has been named CEO on an interim basis.

Hepfinger served as CEO for more than four years, during which time the supermarket chain experienced significant store expansion and renovation programs, including the acquisition of several former Genuardi's stores.

More recently, Weis reported decreases in sales and comp-store sales for the second quarter of 2013.

Weis Markets has 165 stores in Pennsylvania, Maryland, New Jersey, New York and West Virginia.

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%

Whole Foods to take Genuardi's store in Cherry Hill

Whole Foods has announced it will open a store in the former Genuardi's site at Ellisburg Shopping Center in Cherry Hill, NJ. Safeway closed the Genuardi's store last summer after they couldn't find a buyer for it.

Whole Foods plans to renovate the store and open sometime next year. It will be the 13th New Jersey store for the company.

Performance during hurricane boosts Ahold sales

Giant Food parent Ahold reported last week that their 4.3% fourth quarter sales growth was helped by their ability to keep stores open during Hurricane Sandy. Sales in the U.S. for the full year were up 3.1% to $25.8 billion, with comparable sales up 1.9%.

Ahold also said that the 15 Genuardi's stores it acquired from Safeway performed in line with fourth quarter expectations.

Ahold operates Giant-Landover, Giant-Carlisle, Stop & Shop and Peapod online grocery service.

Audubon store to be last Genuardi's standing

It appears that by the end of the year there will be one Genuardi's grocery store left. With the Evesham, Egg Harbor and Barnegat stores slated to close soon, Audubon, PA will be home to the only remaining Genuardi's.

Earlier this year, Genuardi's closed stores in Royersford, Exton and Norristown. Over the summer, 15 Genuardi's transitioned to Giant, three to Weis and one to McCaffrey's. In August, the Cherry Hill site closed. That left four stores, three of which are closing, as mentioned above.

In a recent article the Audubon store manager said his supermarket is in it for the long hall, but that doesn't seem likely. Besides, Safeway's Eastern Division President Steve Neibergall said months ago that the company has decided to exit the Philadelphia market.

Genuardi's disposition causes Safeway sales decline

Safeway reported last week that the disposition of its Genuardi's stores in PA and NJ contributed to a sales decline in the third quarter ended September 8. The company realized an after-tax gain of $49 million and cash proceeds of $111 million on the sale of 16 Genuardi's units and the closure of an additional store during the quarter.

Sales for the quarter declined to $10.1 billion, or 0.2% as compared to the same quarter a year ago. Identical-store sales were 0.1% softer than expected, primarily due to a decline in price inflation. For 2012 so far, sales rose 1.4% to $30.4 billion, and identical-store sales rose 0.3%.

Ahold reports higher sales, remains cautious about the future

Ahold USA, parent company of Giant and Stop & Shop, reported yesterday that sales increased 3.4% to $6 billion in the second quarter as compared to the same period a year ago. The company also announced gains in identical-store sales and operating margin (to 4.3%).

Worldwide, Ahold's net income rose on higher sales. CEO Dick Boer said he expects market conditions to remain difficult and is cautious about the potential impact of rising food costs in the United States.

As for the recent conversion of 15 Genuardi's stores in the Philadelphia market, the company said it was pleased. Boer won't rule out additional acquisitions, but says the current store base in the U.S. is more important.

Weis to replace Pathmark in Huntingdon Valley

The Marketplace at Huntingdon Valley, site of a 52,000 SF Pathmark that closed earlier this year, will soon feature a 62,000 SF Weis supermarket that will sell wine and beer by the glass in its cafe. According to the shopping center owner, Weis Markets will invest $5 - $8 million in the store for improvements to make it one of their flagship properties.

The store, which will also feature a new food court, is expected to open in February or March of next year.

Weis Markets currently operates 164 stores in Pennsylvania, Maryland, New York, New Jersey and West Virginia. The company recently took over three Genuardi's stores in Southeastern PA.