A grocery company that tried and failed to buy hundreds of Kroger and Albertsons stores – after insisting for years that it didn’t want to own and operate grocery stores at all – has now purchased nearly 200 of them from someone else. And if the company continues its history of flipping or closing recently-acquired stores, the transaction leaves many grocery shoppers and employees in the Midwest in something of a state of limbo.
C&S Wholesale Grocers has announced a $1.77 billion deal to purchase SpartanNash. Normally, such a transaction involving two grocery wholesalers would be largely invisible to shoppers, who are unaware and unconcerned about what company supplies the stores where they shop.
But along with SpartanNash’s wholesale business, are the nearly 200 grocery stores that SpartanNash operates, that C&S will soon own. For a while at least.
In announcing the deal, New Hampshire-based C&S and Michigan-based SpartanNash emphasized the expected efficiencies in combining their regional grocery distribution networks, as they stock the shelves of nearly 10,000 independent grocery stores. But they had relatively little to say about the grocery stores they themselves own and operate.
SpartanNash owns a dozen different grocery chains. Half of its stores are part of the Family Fare chain in Michigan, North Dakota, Iowa, Minnesota, Nebraska, South Dakota and Wisconsin. Smaller chains, including Martin’s Super Markets and Remke Markets, are present in Indiana, Kentucky and Ohio.
“In addition to a broad array of groceries, fresh produce and locally sourced products, these stores offer services that shoppers have come to expect, including a wide variety of quality meats and fresh seafood, bakeries, full-service delis with meal solutions and floral departments,” SpartanNash boasts.
In recent years, C&S has owned and operated just about a dozen Piggly Wiggly stores in the Midwest, and ten Tops-turned-Grand Union stores in New York and Vermont (it’s also part owner of about 170 Winn-Dixie and Harveys stores that a consortium of private investors acquired from ALDI earlier this year).
In the early 2000’s, though, C&S had scooped up about 270 Grand Union and BI-LO stores, but swiftly sold or closed most of them, after expressing disinterest in being a grocery owner as opposed to primarily a grocery supplier.
It was curious, then, when C&S was announced a couple of years ago as the planned buyer of 579 Kroger and Albertsons stores that the two would have been required to divest as part of their abandoned merger plan.
C&S insisted it was suddenly interested in being a major grocery owner after all. But part of what prompted skeptical regulators to question the deal, and federal judges to reject it, was their concern that C&S was “an inexperienced and ill-equipped divestiture buyer” with “a lengthy history of buying retail stores to sell them to its wholesale customers” and only a handful of “small and unsuccessful” stores of its own.
So now C&S will find itself the sole owner of nearly 200 SpartanNash grocery stores instead. But it’s made no public commitment to continuing to own and operate them, creating a lot of uncertainty for the stores’ employees and customers. If C&S’s past is any indication, it may pay lip service to becoming a major grocery owner – and then potentially start selling off stores piecemeal and closing the ones that don’t find a buyer.
For now, the two companies are focusing on the benefits of their merger. Their “greater efficiency and scale” is expected to result in “lower prices for grocery shoppers,” they predict. “The stability of the combined organization will allow the combined company and its customers to better compete against various extremely large global grocers in the U.S.”
The question is whether customers of stores like Family Fare, Martin’s and Remke will be able to get those “lower prices for grocery shoppers” at the stores where they currently shop – or if C&S’s interest in becoming a major grocery owner proves to be fleeting once again.
Image source: SpartanNash
