Southern Supermarket Chain Goes Bust

If you live in an area where you have your choice of supermarkets, be thankful. In many smaller towns, there’s often just one actual grocery store, and customers are forced to stick with it, through thick or thin. But shoppers in dozens of Southern communities are finding that their patience is wearing thin. Every few years it seems new owners come in with big promises, and then go bankrupt.

And now it’s happening again.

Birmingham, Alabama-based Belle Foods filed for Chapter 11 bankruptcy protection this week. The chain has 57 stores and nearly 3,000 employees, in cities and small communities in Alabama, Florida, Georgia and Mississippi. In many places, its stores are the only real supermarkets in town. In other places, like its hometown of Birmingham, there are plenty of other choices. And that’s part of the problem.

The company has experienced “an increased amount of competition in several of its markets from other grocers,” its bankruptcy filing reads. “With older locations, Debtor has had difficulty competing with the newer grocery stores that have moved into its markets.”

Belle Foods was in the process of revamping and rebranding many of those smaller, older stores. For those shoppers whose stores never got the upgrade, it will hardly be the first time they’ve been made to get their hopes up for nothing.

Belle Foods’ bankruptcy comes just a year after acquiring its 57 stores from Southern Family Markets, which unloaded the properties just a few years after it had purchased many of them from the bankrupt Bruno’s chain, which also operated Food World and several Piggly Wiggly locations. Nine years and three owners earlier, Bruno’s had also gone through bankruptcy proceedings.

So already, the stores haven’t exactly had the most financially sound reputation.

But Belle Foods was going to be different. It launched an effort to spruce up all of the stores, and convert them all to the new Belle Foods banner. But that increased competition in its bigger markets, together with looming debts coming due, has ground that effort to a halt. Belle Foods’ largest debt, to the tune of $24 million, is due to Southern Family Markets, from whom it acquired the stores last year. Which means, despite its best efforts to give the stores a fresh start, it hasn’t even come close to paying for them yet.

By now, shoppers at the affected stores are pretty accustomed to new owners, new names and new bankruptcy filings every few years. Which is okay, as long as their store, the service it provides and the jobs it brings survives – somehow.

Update: Many of the stores won’t actually survive. Belle Foods now plans to close 13 stores that it had not yet rebranded. Here is the full list of closures, so far: