Fifty is Nifty

If my PG editorial colleagues and I had a quarter for every supermarket survey that popped into our inboxes, it would be no exaggeration to say that we’d all be semi-wealthy and scarcely wiser.

Indeed, as Jim Dudlicek points out in his Editor’s Note on page 10, many of the various industry scorecards that beam across our digital wires are frequently puzzling — if not thoroughly subjective and largely superfluous. All the same, we’re ever mindful that for such an impactful and indispensable industry as food retailing, the often conflicting studies are all to be expected, which perhaps partially explains why we take such great pride in presenting our annual Super 50 ranking of the nation’s top food retailers.

Strictly speaking, our Super 50 countdown, which begins on page 39, is a trusty, concise compendium of the 50 most influential players in the retail food world. Under the meticulous supervision of Director of Research Debra Chanil, each company that graces our list was contacted for guidance on the four categories profiled in the retailer registry: annual sales from their most recently concluded fiscal year, store count, top banner names and employee counts.

And though most companies graciously answered our call for direct input, some didn’t, despite our best efforts. But we’re nonetheless confident that our 2015 roll provides a solid accounting of what I perceive to be a genuinely nifty list of some of the industry’s most intriguing contenders, the majority of which wield an enormous amount of clout and prominence in any number of important ways in both their local communities and on the national stage.

While the rankings of the vast majority largely speak for themselves, a few subtle yet significant changes stand out on The Super 50, the top 10 of which also received expanded analysis and firsthand quotes from several senior company executives, beginning on page 40. Foremost to note is the consummated acquisition by Albertsons’ parent company of Safeway (No. 4 last year), causing AB Acquisition to vault past last year’s No. 7 slot to nab the third rung this year. Meanwhile, Target Corp., which is undergoing a corporate reset of its own, dropped to No. 13 from its third-place spot last year, largely as a result of an apples-to-apples reordering of its ranking based on sales generated only by its SuperTarget stores.

Accordingly, Publix, Ahold USA, H-E-B Grocery Co., Delhaize America, Meijer, Wakefern and Whole Foods Market all moved up a rung to round out the top-10 leaderboard, for which a few key developments occurred at press time that bear further brief commentary, beginning with talks of a potential public offering by AB Acquisition later this year that could raise as much as $500 million. As the chain’s would-be third IPO, the move to take the company public would certainly seem premature in the timeline of a still-recent deal, whose complex integration is by no means complete. But there’s no overlooking the obviously fertile market conditions and companion valuations that are trending at record levels.

As Planet Retail Director Kelly Tackett sees it, “The proposed IPO could be more about the owners trying to take advantage of favorable market conditions and profit-taking than an indication of where the two supermarket operators are in the execution of their joint strategic plan.”

And then there’s The Super 50’s venerable No. 2 powerhouse, Kroger, which made a smooth move in late April to acquire most of DunnhumbyUSA from the Tesco-owned, UK.-based analytics firm. The complex and highly significant agreement is poised to provide Kroger with greater flexibility while giving the struggling Tesco the ability to reduce costs and raise cash. The companies will replace their existing DunnhumbyUSA venture with a long-term license and service agreement that will splinter into a new business called 84.51 (in a nod to the new Cincinnati-based entity’s longitudinal location — acronym yet to be determined).

“Kroger and dunnhumby revolutionized retailing in the U.S. by focusing on the customer, and we intend to do it again with 84.51,” said Rodney McMullen, Kroger’s chairman and CEO when news of the acquisition broke. Backed by a “decade of experience and a team of incredibly talented associates, the ability to combine what we already know with other partners is exciting and will speed up innovation” in the name of delivering what McMullen termed “a world-class customer experience. We will continue to utilize data science for the benefit of the customer and to deliver a personalized experience, both in store and online.”

Let there be no doubt: It will be an experiment well worth watching.

Meg Major
[email protected]
Twitter @Meg_Major/@pgrocer

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