THE FRIDAY 5: New Leader at Stop & Shop; Kroger Prepares for 3rd Court Battle
Welcome to The Friday 5, Progressive Grocer’s weekly roundup of the top news and trends in the food retail industry. Each Friday, we’ll take a look at the stories that are most important to our readers and also keep tabs on the trends that are poised to impact grocers.
1. New Leadership at Stop & Shop
Breaking news this week included Ahold Delhaize USA’s move to elevate its chief commercial officer to president of Stop & Shop. Roger Wheeler will take over the role effective Sept. 30, while current President Gordon Reid plans to retire in mid-2025.
In an exclusive trade press interview with PG Managing Editor Bridget Goldschmidt, Wheeler candidly discussed his background, the qualities he brings to his new job, his priorities in the position, and what he wants associates and customers to know.
Stop & Shop has been in a state of flux as of late, having identified 32 locations that it intends to shutter by year end as part of parent company Ahold Delhaize’s Growing Together strategy. Following the closures, Stop & Shop will still operate more than 350 stores across its five-state footprint: 81 in Connecticut, 115 in Massachusetts, 47 in New Jersey, 91 in New York and 25 in Rhode Island.
2. Kroger Gets Ready for Battle in Colorado
All eyes have remained on PG’s coverage of Kroger’s court battles, starting with Washington state’s antitrust case against the grocer’s proposed $24.6 billion merger with Albertsons Cos. At the end of last week, Alona Florenz, C&S Wholesale Grocers' SVP of corporate development and financial planning and analysis; Joseph Welsh, CEO of Joseph Welsh Consulting and an expert in supermarket retail operations and rebannering; and Mark McGowan, C&S president of retail, took the stand to further discuss the divestiture plan.
Kroger and Albertsons have already agreed to divest 579 stores to C&S, the largest grocery wholesale distributor in the United States, and the eighth-largest privately owned company in the United States. Kroger believes that C&S’s existing distribution network positions it well for retail expansion, and that its procurement network and deep industry experience will enable C&S to aggressively compete in the grocery retail market.
Come Monday, the CEOs of the two grocery retailers took the stand in Seattle. Kroger Chairman and CEO Rodney McMullen and Albertsons CEO Vivek Sankaran argued that their merger is justified, as it will allow them to better compete with diverse yet powerful companies like Walmart, Amazon and Costco, which have moved rapidly to dominate grocery retailing. As reported by The Seattle Times, both retailers pushed back against the argument that Kroger and Albertsons are each other’s most significant rivals.
Day six of the Washington state trial saw the court hearing from Eric Winn, CEO of C&S.
While Kroger and Albertsons are still in the midst of their trial in Washington state, they're also gearing up for court proceedings in Colorado. A trial is scheduled to start there on Monday, Sept. 30. In February, following a yearlong investigation, Colorado Attorney General Phil Weiser filed a lawsuit in Denver District Court to block the merger, contending that it would eliminate head-to-head competition between Kroger and Albertsons and consolidate an already concentrated market.
3. Looming Port Strike Could Affect Grocery
Oct. 1 could prove a pivotal date for the U.S. food supply chain, as port workers have set that deadline for a possible strike. After months of negotiations, more than 40,000 workers at ports on the East and Gulf coasts are looking at making a labor move that would impact retailers around the country.
The unions are asking for a sizable raise over a six-year period and are also seeking protections against automation that could replace jobs. While the strike would affect several industries, including the auto sector, food imports would be hard hit, including fresh fruit. For example, a majority of bananas come through ports in the East and Gulf coast. Exports will be likewise impacted, such as perishable meat products bound for key foreign markets.
4. Whole Foods Gets the 411 on Gen Z
In the run up to Climate Week, Whole Foods Market took a deep dive into the food, health and grocery shopping preferences of Gen Z consumers. The findings, which underscore a laser focus on sustainability and product quality, are part of a new national survey conducted by YouGov on behalf of Whole Foods.
Some 70% of online survey respondents say they support climate-smart agricultural practices and 55% saying they are willing to pay more for environmentally sustainable products. Additionally, more than half of respondents prefer brands that prioritize lower environmental impacts or locally sourced foods.
Looking toward the future, nearly 75% of Gen Z respondents said they are concerned about the future of our climate, and 68% said they would benefit from being given more information from retailers about the sustainability of the food products they wish to purchase.
5. Weis Markets Growing in Pennsylvania
News came in this week that Weis Markets has entered into an asset purchase agreement with Sunnyway Foods to purchase certain assets of Sunnyway’s supermarkets in Chambersburg, Pa., and Greencastle, Pa., both of which are located in the commonwealth’s Franklin County.
The company expects that the transaction will be completed in the fourth quarter of 2024. Both stores will briefly close for conversion and then reopen under the Weis Markets banner.
“Sunnyway Foods, the Martin family and its associates are known for their service and dedication to their communities,” noted Jonathan Weis, Weis Markets’ chairman and CEO. “As a company with a strong local focus, our goal is to build upon this strong foundation. We look forward to interviewing the associates of these stores for employment with our company.”
