Shortly after Albertsons acquired Safeway in early 2015, we were frequently asked two questions – one national, one regional: when will primary owner Cerberus attempt to take the company public, and, when will Safeway’s eastern division and Acme Markets combine backroom resources?
The answer to the first question came about nine months after the acquisition when the newly combined then $58 billion retailer tried (and failed) to launch an IPO. As for question two, we all knew that would take longer, considering both divisions had their own Teamsters organized distribution centers, making such a merger untenable at the time.
Not that Albertsons didn’t try. In late 2015, the big retailer planned to close its DC in Upper Marlboro, MD (built in 1998) and shift distribution to several Mid-Atlantic depots operated by C&S Wholesale Grocers (which had been overseeing day-to-day functions at the Upper Marlboro facility since 2000). However, a last minute effort by both Teamsters Local 730 and the state of Maryland kept the warehouse open and those Teamsters employed, but under the full control of Safeway.
However, the desire to improve productivity at Albertsons never really left, and when the company in January 2020 announced that it would merge Safeway’s warehousing and distribution functions into the larger and more efficient Acme DC in Lancaster, PA, the handwriting was on the wall that at some point Safeway’s headquarters functions would also shift northward.
That announcement was made on July 1 and will create a new operating unit (the Mid-Atlantic division), which will encompass 275 stores ranging from New Canaan, CT to Culpeper, VA with about $6 billion in annual revenue. Most of the administrative duties, including merchandising and marketing, will originate from the current Acme headquarters in Malvern, PA (approximately 120 miles away from Safeway-Eastern’s offices in Lanham, MD).
There also won’t be a talent shortfall with the new lineup. Jim Perkins, current Acme president, will oversee the new Mid-Atlantic division and Safeway-Eastern president Tom Lofland will be on board too as senior VP-merchandising (much of Lofland’s career has been focused on merchandising) and he will be relocating to the Philadelphia area.
Obviously, there will be some attrition, but not as much as one might think due to the fact that both banners have been operating on the lean side for the past couple of years. And though Albertsons said that 95 associates will be impacted by the announcement (including relocations), expect the final number of job losses to be about 30 with (my guess) the bulk of the downsizing to be focused on clerical and pricing.
Associates are in the process of completing “career interest” surveys which Acme and Safeway management will assess through interviews and everybody who will be “seated” in Malvern should be at their desks right after Labor Day.
Combining divisions won’t be easy and the job losses will certainly be painful, but this is the right move, especially since Albertsons just launched its IPO and seeks to gain cost and productivity benefits that will further reduce its $6 billion debt.
The challenge for Perkins, Lofland and the corporate team in Boise will be in smoothly blending the two cultures while hoping for increased capital to improve a store base with many great locations in need of continued modernization.
‘Round The Trade
As Wegmans continues to reimagine parts of its business (especially in foodservice), the Rochester, NY-based merchant said it has closed its 12 Pubs located inside the company’s stores in Virginia, Pennsylvania and New York. Four of its Pubs were located in Virginia – Alexandria, Charlottesville and its two Richmond locations. The Pubs have been closed since March and late last month, Wegmans made the decision that they wouldn’t reopen and the uber-retailer will ultimately have to make a decision whether its other foodservice components (Burger Bar, Market Cafés, Amore, Next Door and its freestanding restaurant in Rochester, Tastings) have a long-term future in the retailer’s lineup.
More Wegmans news: Mary Ellen Burris, the dean of all consumer affairs in the grocer industry, has retired after 49 years with the company. Burris, 86, was hired in 1971 by then-CEO Bob Wegman, in an era where the job of protecting the interests of consumers was virtually unheard of (Esther Peterson of Giant Food was the first consumer affairs executive in the business to my recollection). Burris was vital in helping Wegmans grow and develop a strong connection with its customers. Truly a pioneer in our business and one of the nicest people you could ever meet, we wish her all the best in her future endeavors.
It took more than five years to get ‘er done, but Whole Foods late last month finally opened its new replacement store on S. Central Avenue in Baltimore’s Inner Harbor (technically Harbor East). The new market, a 47,000 square foot store, is a major improvement over its predecessor – the 13,500 square foot unit that was located on Fleet Street which first opened in 2002. The opening was originally slated for April but was delayed due to COVID-19 related concerns.
Giant Food has launched a new integrated e-commerce shopping platform that will integrate the old peapod.com and giantfood.com sites to create a single site on giantfood.com. Customers who had previously opted for pickup or home delivery through Peapod by Giant at peapod.com can now access the same e-commerce service through the integrated Giant website or free mobile app. “Consumer preferences are shifting, and at Giant, convenience and value are key. We are a brand with over 84 years of serving our customers locally in our community, and we are excited to extend that commitment with the launch of our one-stop integrated digital experience. The new giantfood.com brings customers the flexibility to shop how and when they like through the new seamless platform, with the same quality of products they expect in any of our stores,” said Ira Kress, president of the Landover, MD-based unit of Ahold Delhaize USA. “Beyond choosing where and how they want to place grocery orders, customers are able to browse rewards offerings that help them earn gas and grocery points, as well as save shopping lists, and view personalized product recommendations.”
At parent firm, Ahold Delhaize, chairman of the supervisory board Jan Hommen said he will step down from that post at the end of the year. The retired Dutch businessman, 76, will be replaced by Peter Agnefjall, who’s been on the international retailer’s supervisory board since 2019. Agnefjall, 48, was formerly president of Ikea from 2013-2017.
Earth Fare, or at least part of it, has risen from the dead, and is once again operating stores. The Asheville, NC-based organics retailer recently opened three former Earth Fare units in Asheville and Boone, NC and Roanoke, VA it acquired at auction after the former ownership group Oak Hill Capital Partners liquidated its 50-store operation earlier this year. Now under the leadership of original co-owner Randy Talley and businessman Dennis Hulsing, the company plans to open another new store early next year in Christiansburg, VA.
Not surprisingly, Weis has cancelled its annual vendor summit this year due to ongoing pandemic-related concerns. The meeting was originally scheduled for September 16 at the Hershey Lodge in Hershey, PA. Weis said that it will be compiling an information deck containing relevant details for its vendors that will be available in the fall.
While Target ended its $2 per hour bonus pay on July 4 (thought to be the last retailer to stop employee appreciation compensation), the company confirmed (on July 5) that its starting hourly wage for all hourly workers will be increased to $15 an hour. The Minneapolis-based mass merchant also said that all store and distribution center associates would receive a one-time “recognition bonus” to be distributed at the end of this month.
Costco’s June sales were $16.2 billion, an 11 percent increase from a year ago and the same store sales (ex-fuel) jumped 14.4 percent. The club store leader also posted an 86.7 percent e-commerce rise. Big gainers were frozen and deli (percentage growth was in the mid-teens) and fresh foods (up in the mid-20 percent range). Costco is also bringing back in-store sampling, a key merchandising tool for the Issaquah, WA-based retailer. Demos were halted in March due to COVID-related concerns. Costco said its strongest regions were the Northeast, Texas and the Southeast.
According to a story in Recode Magazine (founded by former Washington Post reporter Kara Swisher), Walmart will launch its own shopping subscription service later this month which is designed to compete directly against Amazon Prime. Membership in the new service will cost $98 annually (vs. Prime’s $119 fee) and will offer such services as same-day grocery delivery, early access to promotions and gas station discounts. Also at the Behemoth: the planet’s largest merchant last month postponed its annual shareholder meeting and show biz extravaganza which is usually held at the 19,000 seat Bud Walton Arena in Fayetteville, AR. This year’s version resulted in a 60-minute conference call in which chairman Greg Penner and CEO Doug McMillon addressed a wide range of issues including social justice, the effects of COVID-19 (more than 270,000 of the company’s 1.5 million U.S. associates have taken coronavirus-related leave of the past three months) and the rapid increase in online buying.
From the desk of death, we have several notable obituaries to report. One of the greatest comedic talents in television history, Carl Reiner, has died. Reiner, who passed away late last month at the age of 98, was still making contributions to his craft well into his 90s. His comedic touch could be subtle as was his character, Alan Brady, in “The Dick Van Dyke Show” (the iconic TV series he created), or as thought provoking as Mel Brooks’ straight man on the “2000 Year Old Man” comedy albums that the lifelong friends created. During his career, which spanned more than 70 years beginning with “Your Show of Shows,” Reiner was also a fine actor (“The Russians Are Coming, The Russians Are Coming”), a talented director (“Oh, God!”) and a creative screenwriter (“Enter Laughing”). A once-in-a-generation talent, Carl Reiner will be missed.
One of the best string players in country or rock music, Charlie Daniels, has also passed away. Daniels, 83, first gained fame as a studio musician in Nashville in the late 60s, appearing on Bob Dylan’s “Nashville Skyline” album. In 1970, he set out on his own and within a few years, using his guitar and fiddle skills, formed the Charlie Daniels Band. Among his biggest hits were “The Devil Went Down To Georgia” and “Long Haired Country Boy.” In 2016 he was inducted into the Country Music Hall of Fame.
And finally, arguably the best film composer of the past 60 years, Ennio Morricone, 91, has also left us. With all due respect to John Williams, Bernard Hermann and Dimitri Tiomkin, Morricone’s haunting and creative scores puts him at the top on my list. The lifelong resident of Rome, who won an Oscar for Quentin Tarantino’s “The Hateful Eight,” also worked with such great directors as Mike Nichols, Roman Polanski, Terrence Malick, Bernardo Bertolucci and Barry Levinson. He first came into relevance in Sergio Leone’s mid-1960s spaghetti western trilogy – “A Fistful of Dollars,” “For A Few Dollars More” and “The Good, The Bad and The Ugly.” He also scored two great (and unsung) Leone films: “Once Upon A Time In The West” and “Once Upon A Time In America,” and his composition “The Ecstasy of Gold,” the theme song for “The Good, The Bad And The Ugly,” became Morricone’s biggest hit. Never before in music history did the words “Ah-Ee-Ah-Ee-Ah” bring so much ecstasy or gold (to Morricone).