Norkus Enterprises Inc. has reached a tentative agreement to sell five of its six New Jersey Foodtown and Super Foodtown Supermarkets to Stop & Shop, officials from both companies said late last month. Although no purchase price was announced, several trade sources pegged the five store deal in the $25 million range.
The deal involves Norkus-owned stores in Freehold Township, Manalapan, Neptune City, Point Pleasant Beach and Long Branch and is expected to be finalized in May. However, Foodtown has 60 days in which to make a counter offer for the stores.
If the sale goes through, Norkus Enterprises, based in Point Pleasant Beach, NJ, will be left with one Foodtown in Freehold and four Max’s Beer, Wine & Liquor stores.
Stop & Shop, which is part of Ahold USA, currently operates 10 stores in Monmouth and Ocean counties.
In recent years, Ahold has looked to “in-market” acquisitions to strengthen its market share, including the purchase of 14 Clemens units in the Delaware Valley in 2006 and six Laneco units in the Lehigh Valley in 2001. Last year, Ahold USA expanded its marketing area by acquiring Ukrop’s in Richmond.
And although several of the Norkus Foodtown stores are on the smallish side (under 30,000 square feet), one observer said that Ahold will not have a problem making the transition work.
“The Clemens acquisition and subsequent conversions clearly illustrate that they can make smaller units work,” said the trade analyst who wished to remain anonymous. “Some of the stores are seasonal units, and after some remodeling, the deal will be a good one for all parties. As for Gerry (Norkus), it was the right time to sell. Word on the street was that there was some debt involved, and he’s at an age where he needed to make some long-term decisions for himself and his family.”
The Norkus Foodtown stores employ approximately700 full and part-time workers. Employees were notified that Stop & Shop intended to hire the vast majority of them under similar contract terms.
The company, owned by Gerry Norkus and his two sons, Mark and Stephen, was founded in 1935 by Gerry Norkus’ father, Francis, who opened a grocery store called Table Talk on Main Street in Freehold.
Foodtown is a cooperative of 66 independently owned stores based in Iselin, NJ and along with Food Circus (Scaduto/Azzolina) and PSK Supermarkets (Katz), Norkus is part the largest supermarket faction of the group. The Norkus family opened its first Foodtown in the early 1950s and expanded in the ensuing years, most recently in 2004 when it acquired another Foodtown in the West End of Long Branch. The retailer shuttered its Toms River, NJ location last June.