THE FRIDAY 5: Massive Listeria Outbreak Leads to Recalls; 7-Eleven, Walgreens Store Closures

1. Listeria Contamination Leads to Recalls Across U.S. Grocery Industry

News broke last week that more than 12 million pounds of ready-to-eat chicken products were recalled in the United States following a Listeria monocytogenes contamination found during routine tests by the U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS). The recall was initiated by BrucePac of Durant, Okla., for products produced between June 19 and Oct. 8, then shipped to other establishments and distributors nationwide. 

While no confirmed illnesses or deaths have been reported as a result of the contamination, a very lengthy list of products affected was released by FSIS. For its part, Albertsons Cos. issued a recall for 12 types of ReadyMeals and store-made deli items, while several H-E-B prepared meal products have also been taken off store shelves. Nine products from Trader Joe’s have been recalled, ranging from ready-made salads and wraps to frozen chicken chow mein.

Kroger salad kits, Home Chef meals, ready-to-eat salads from Meijer and Raley’s, ready-to-heat chicken alfredo from Save Mart, and myriad other frozen and fresh CPG products are also among those being recalled. 

In a statement on its website, BrucePac said: “We are working closely with USDA to ensure that all necessary actions are taken to ensure a safe food supply. We will not resume production until we are confident the issue has been resolved.”

2. SpartanNash, Hy-Vee Make Store Acquisitions

M&A news made waves this week as SpartanNash announced that it plans to buy Fresh Encounter, a 49-store supermarket chain with locations in Ohio, Indiana and Kentucky. The grocer has been a food distribution customer of SpartanNash for 58 years, and SpartanNash will continue to employ its 2,500 associates.

The move will grow SpartanNash’s retail footprint by 33% and is the company’s second retail acquisition of 2024, following the purchase of Metcalfe’s Market this past April. 

“This acquisition is an exciting milestone in our company’s strategic growth plans," noted SpartanNash CEO Tony Sarsam. "Not only will we welcome 2,500 new associates to the SpartanNash family, we will also begin serving shoppers in Kentucky and grow our existing footprint across Ohio and Indiana. Retail is a critical component of our business model and long-term strategic plan, as we meet consumer needs and leverage insights from our stores to continuously innovate our products and operations across our wholesale business.”

In other M&A news, it was revealed this week that effective Nov. 2, Midwest retailer Hy-Vee will be the new owner of Webster’s Marketplace in Ripon, Wis. While not initially for sale, Webster’s received "a very nice, unsolicited offer from Hy-Vee" that it chose to accept, according to second-generation owner Candie Webster. 

"We are very excited to have the Webster's Marketplace team join the Hy-Vee family," shared a spokesperson for Hy-Vee. "We know that their shared commitment to both customer and community service makes them a strong addition to our company, and we're proud to welcome each Webster's Marketplace team member to Hy-Vee."

Readers were also interested in the news that Wakefern Food Corp. acquired the Di Bruno Bros. portfolio of specialty products, which are currently distributed nationally to wholesale and retail customers. Di Bruno Bros.’ five retail locations, along with a bottle shop, were acquired this past April by DB Gourmet Markets LLC and are now being operated by Philadelphia-area Wakefern member Brown’s Super Stores.  

3. Celebrating the Next Generation of Grocery Leaders

PG unveiled the winners of its GenNext Awards this week to much fanfare. The honorees — 94 this year, ranging in age from 23 to 39 — are among the best their respective companies have to offer, stepping up to lead initiatives, guide their colleagues and help their communities. Whether they work at retailers, suppliers or solution providers, their goal is the same: to advance their businesses and, by extension, the entire grocery sector.

Read on to see the full list of 2024 winners.

4. 7-Eleven, Walgreens Announce Sweeping Store Closures

7-Eleven parent company Seven & i Holdings disclosed in its latest earnings report that the c-store will shutter 444 underperforming stores across North America, citing lower traffic and sales, as well as a downturn in what had been a once-steady cigarette business. 

Currently, 7-Eleven operates more than 13,000 locations in the United States, Canada and Mexico. The closings impact about 3% its total footprint and the company estimates that the move will result in a $30 million operating income benefit for 2024.

Alimentation Couche-Tard Inc., the Quebec-based owner of Circle-K, had recently offered an unsolicited takeover bid for the 7-Eleven business, and this week upped its offer to $47.2 billion after Seven & i rebuffed the earlier $38.5 billion buyout offer.

Meanwhile, the state of the retail pharmacy business remains in flux as Walgreens announced that it plans to close about 1,200 underperforming stores. The company is taking action in the wake of sluggish sales, growing online competition and challenges in other aspects of its business. Walgreens’ “footprint optimization program” will include the shuttering of at least 500 stores in fiscal 2025, with that number being higher than the 300 stores it announced it would close during its last recap in June.

5. How Stop & Shop is Making Groceries More Affordable

Stop & Shop is hoping to make groceries more affordable at its 25 Rhode Island stores with the help of a new three-point plan. First, the grocer is lowering prices on 3,500 grocery items across nearly every department. 

Stop & Shop is also installing Savings Kiosks/Stations, which provide customers with digital coupons, printed in-store or delivered to their phone. (The state-wide installment is part of a larger effort to launch these kiosks brand-wide by early next year.) Third, the grocer is eliminating its 10-cent paper bag fee at all stores across the state, making them once again free for Rhode Island shoppers.

“We have been listening to our customers – and we have heard you," said Roger Wheeler, who was recently named president of Stop & Shop. "That is why we’re making it possible to buy more groceries for your family, at a lower cost, at every one of our stores in Rhode Island.”

Continued Wheeler: “We’re also investing in more store remodels, like our newly refreshed location in Richmond, which will be complete later this month. We’re going to continue to listen to your feedback and will, over time, make even more changes across all areas of the store.”