Japanese retailer Pan Pacific International Holdings (PPIH) has entered into a definitive agreement to acquire Gelson’s Markets, signaling a possible period of accelerating growth for the upscale California grocery chain.
The deal is expected to close in the second quarter of 2021.
Gelson’s, which operates 27 stores and was founded in Burbank, California, in 1951, was acquired by private equity firm TPG Capital in 2014.
The grocer, which will celebrate its 70th anniversary in July, added 10 locations while owned by TPG, expanding its footprint from Santa Barbara to San Diego. Gelson's Markets are known for offering premium assortments of both fresh and dry grocery, as well as upscale service and e-commerce offerings.
“We have long appreciated TPG’s understanding of the Gelson’s brand and its strong support over the past seven years, from financing newly built and acquired stores to investing in our Santa Fe Springs distribution center,” said Rob McDougall, president and CEO of Gelson’s. “As we look to the future, we are excited about opportunities for new growth and partnerships under PPIH, while remaining focused on our longtime commitment to the highest standards of quality, value, and unsurpassed customer service. PPIH leadership has visited every one of our locations and has been incredibly complimentary of our stores and teams, as well as our customer service philosophy.”
PPIH is a global retailer with 638 international stores, 582 of them in Japan. Founded over 40 years ago by Takao Yasuda, and particularly known for its Don Quijote stores in Japan, PPIH has grown over the last four decades to reach more than $15 billion in annual sales. PPIH also operates stores in Hawaii (Don Quijote (USA), Marukai, Big Save, TIMES), and California (Marukai and Tokyo Central) as well as in Singapore, Hong Kong, Thailand, and Taiwan.
“We strongly respect Gelson’s brand and history of 70 years known as a premium supermarket chain in the U.S.,” said Naoki Yoshida, president and CEO of PPIH. “We have set our footprint in the state of California when we acquired MARUKAI CORPORATION in 2013, and we look forward to expanding our presence in California and dedicating ourselves to satisfying customers who value quality products, cleanliness, convenience, and personal service. We feel excited to work with Gelson’s team to accelerate future growth.”
Gelson's Markets competes in California with Albertsons Cos., Raley's Supermarkets, and many other traditional and non-traditional grocery chains.
Over the past year Gelson’s has ramped up its e-commerce offerings, including teaming with retail technology company GetUpside to make cash-back offers available to shoppers at its stores.
“Gelson’s prides itself on providing best-in-class products and experiences for shoppers,” noted Yvonne Manganaro, the company’s VP of marketing. “We’ve partnered with GetUpside to continue this commitment and provide cash-back offers that are personalized and highly incremental to our business. Their model moves beyond tracking clicks or impressions, and gives us insight into our customers that drive measurable results.”
The easy-to-use GetUpside mobile app uses machine-learning algorithms to quickly comb through the anonymized transaction data that grocers already have to understand how customers behave and pinpoint the minimum offer that will motivate them to take additional action. GetUpside specifically targets infrequent, occasional and lapsed customers to boost return rates and grow basket sizes.
In July Gelson’s introduced a new rewards program that allows customers, whether in person or buying through Instacart, to earn points for every dollar they spend.
The Gelson's program has four tiers: Foodie, Gourmet, Connoisseur, and Epicure. It also offers a variety of perks and benefits, such as free Items, Gelson’s Brand BOGO events, percent off whole store events, and first to market samplers.
Instacart is also integrated into the program making it easy for customers to order online, pick up and still earn points.