After Record Year With 44 New Stores, Weis Tells Plans To Continue Momentum
The past 12 months proved to be the busiest period in Weis Markets’ 105-year history. The Sunbury, PA merchant acquired 44 stores and, after remodeling, reopened all of them within 96 days. The acquisition of five Mars Supermarkets, 38 Food Lion units and one Nell’s Market were part of a total of 146 projects the company’s store development team completed last year.
And according to Weis chairman and CEO Jonathan Weis the momentum is continuing during the first three months of 2017. Weis, along with COO Kurt Schertle and senior VP-merchandising & marketing Richard Gunn addressed nearly 700 vendors at the regional chain’s annual vendor strategic alignment summit meeting held earlier this month in Hershey, PA.
“I’m happy to re-emphasize what I said at our last strategic alignment meeting in 2016: Weis Markets remains a buyer, not a seller. We’ve proven that point over the past 12 months,” Jonathan Weis asserted.
He added that the company, co-founded by his grandfather in 1912, will continue to invest in its growth this year with a $100 million cap-ex budget that will include 14 remodels, two gas stations and a major distribution center expansion.
“As a result of our acquisitions, we have completed several years’ worth of growth in one. This allows us to compete in new markets and it makes us a bigger customer and a more valuable account for your business,” Weis proclaimed when addressing a packed house of suppliers, distributors and food brokers.
Along with Jonathan Weis, chief operating officer Kurt Schertle is one of the drivers of Weis’ recent success. In his remarks, he provided the vendors with an overview of the market landscape and how Weis plans to continue to upgrade many of its systems and operations to remain ahead of the competitive curve.
The 45-year old industry veteran noted recent key industry changes have included the Ahold-Delhaize merger (which is heading toward a more decentralized organization); the effects of Albertsons Safeway acquisition and regional consolidation and the shifting priorities away from retail at Supervalu. He also noted the growing impact of online competition and mobile ordering where studies have suggested that as much as 40 percent of all center store and non-food items will be purchased via the Internet by 2025.
Schertle told the vendors it was important that Weis step up its online presence, remain competitive with price-driven merchants such as Aldi, Wal-Mart and the soon-to-be new market entry, discounter Lidl (Weis is currently offering 180 “Valu Time” products comparable in price to its discount competitors). He also noted Weis’ priority to remain on trend both with category growth and store improvements. At the store level those upgrades include additional beer and wine cafes (50 currently exist), which was aided by a change in Pennsylvania law that allows food retailers to sell wine in its stores.
The former Supervalu executive, who began his career at the old Metro Food Markets/Food Basics banner in Baltimore, was particularly proud of the efforts of the company’s associates in completing the conversion of its 44 newly acquired stores last summer and fall. “Associates from every part of the company played a key role in these conversions – IT, store support and supply chain. Our store development team also played an important role,” Schertle declared, adding that more than 2,500 additional associates were hired and trained to accommodate the growth initiative.
Looking forward to the remainder of this year, Schertle said the company will focus on the overall customer experience while also adding productivity “enhancements” in all its stores. He also reviewed gains made in Weis’ pharmacy operations where sales grew an impressive 8.3 percent at its 138 in-store pharmacies. “Pharmacy is an overall sales builder through health and wellness promotions,” Schertle affirmed.
He was pleased with Weis’ gains in sales and earnings last year. With 44 new stores added to the fold, obviously revenue would increase significantly, but Schertle pointed to the retailer’s comp store sales for the year which were up 2.9 percent (significantly better than most of its industry peers) while net income also grew 46.6 percent. In a very difficult economic climate where deflation created a big hurdle to match comps from previous years, Weis achieved its third consecutive year of increased comp store sales. When assessing overall company sales (which were $3.1 billion last year), Schertle felt that once the new stores have been fully absorbed into Weis’ revenue stream coupled with the company’s ongoing solid same store sales performance, Weis’ total annual revenue will be in the $3.6 billion range by the end of the year.
In addressing the vendors at the summit, Richard Gunn focused on several key priorities for Weis Markets going forward. Those areas, where both consumers and members of the trade will see improvements, included advertising/marketing, enhanced value image and store upgrades and refinements.
Gunn noted Weis has broadened its message delivery network to include print, mail, radio, TV and digital, all of which has created more impact with the company’s customers. From information improvements such as providing customers with a more detailed receipt to more visible ones such as promoting its lowest price guarantee program (on specific advertised items), “driving home our value image is also one of our key 2017 initiatives,” Gunn affirmed. The former Food City executive, who joined Weis two years ago, updated the audience on its “click & collect” program which now includes 36 stores with 13 more units to be added this year. Gunn said his company expected to add mobile ordering by summer, which he described as a huge opportunity.
The Virginia native briefed the vendors about its ongoing reset program which now includes one ISE (In-Store Execution) vendor for every two stores; two resets per week; reset work performed at night which will create a speed-to-shelf turnaround in less than a week.
Gunn amplified Schertle’s “on-trend” focus, revealing that by prioritizing areas such as gluten-free, sushi and K cups, both Weis and its participating vendors have really benefited. He praised the contributions from Weis’ fresh departments – meat, produce, deli and food services – where sales grew in all areas (including meat and produce where deflation was significant). Also gaining revenue was Weis’ bakery departments, aided by a new bulk sales program.
During the past few years, Weis has spent significant capital on improving and enlarging its distribution center in Milton, PA. In 2016, the company’s weekly deliveries increased 25 percent and it expanded its overall fresh capacity, too. This year another 105,000 square feet of refrigerated pace and 110,000 square feet of frozen capacity will be added giving the primarily self-distributed retailer 1.3 million square feet of warehouse space. It has also hired 160 new associates to meet Weis’ growth.
Late last year, Weis began utilizing the services of C&S Wholesale Grocers, the nation’s largest independent retail distributor. C&S, which sold Weis two stores (Hanover, PA and East Berlin, PA), will now supply Weis with some HBC and general merchandise items, allowing Weis to utilize that space in its own warehouse to carry faster moving products.
Gunn also appealed to the vendors to become more actively involved with Weis’ “Fight Hunger” program, a cause “that is very important to me.” He said that this year’s expanded program will benefit food banks in seven states and that corporate donations will be given to complement monies that are raised. Gunn had one more message to the vendors in the form of “the big ask”: “We want to set up a meeting with your senior supply chain executives and our distribution team, including myself, our senior VP Wayne Bailey, Terry Wallace, our senior procurement manager, and Gary Kinneer, our director of managed transportation. Our goal is a comprehensive review of our buying model. Can we make improvements that will help us lower our costs? Are there additional backhaul opportunities? Mixing center opportunities?”
This was the biggest of all of Weis’ annual vendor summits which began modestly with a small gathering in Hagerstown, MD in 2009. It was also the best attended, reflecting Weis’ continuing growth.
And throughout its exciting recent run some things remain unchanged: its ability to execute at a high level, the fairness in the manner it treats its associates and its vendors and the grace and humility in which it comports itself on a daily basis.
There’s little question that without a very high level of execution by CEO Jonathan Weis, COO Kurt Schertle and their team, the Sunbury, PA regional chain could not have reached the stellar performance levels it has achieved in an extremely competitive environment. Opening 44 stores in 96 days is a microcosm of the company’s flexibility and skill. And when you talk to Weis’ associates and to its vendors, the common theme is “fairness and respect.” That’s how we’d all like to be treated, but Weis is clearly walkin’ that talk. Much easier said than done. And after three consecutive strong years of performance, it would be easy to feel a bit full of yourself. That’s never been the case at Weis where the culture continues to be one of focus, selflessness and remaining humble.
Investor Jana Partners Seeks To Force Change At Struggling Whole Foods
We’ve seen this play before: Wall Street investment firm acquires substantial stake in undervalued publicly-traded supermarket chain. In this case, that company is Jana Partners LLC, which three years ago (almost to the day), announced it had acquired 6 percent of Safeway’s common stock.
Fast forward to April 10, when that same company led by activist hedge fund executive Barry Rosenstein, proclaimed that it has taken a nearly 9 percent equity stake in Whole Foods Market. While Safeway was long seen by Wall Street as a steady, if not somewhat plodding grocery chain, Whole Foods until recently was viewed as an creative and proactive merchant which maintained wide appeal with America’s most desirable shoppers – millennials and gen-yers. But in the challenging and fickle world of retail food there certainly was a commonality between both chains, at least from Wall Street’s perspective. Both companies were deemed as undervalued and arguably in need of a management overhaul and perhaps a cultural change. At Safeway, stalwart CEO Steve Burd was about to retire after 20 years at the helm (his successor former CFO Robert Edwards ultimately sold the company to Albertsons); at Whole Foods, co-founder and current CEO John Mackey has been manning the ship since its creation in 1980 and in the past two years the legacy organics merchant has lost considerable mojo.
Enter Jana. This isn’t about a takeover plan by another PE company, nor is it an attempt to entirely revamp the way Whole Foods goes to market. Much like Safeway, this is an investment opportunity – designed to create pressure on WFM to drive the company’s flagging stock price up. The Jana investment certainly produced a short term surge with Whole Foods shares moving to a new 52-week high of slightly more than $35 per share. A year earlier, WFM traded at approximately $50 per share.
With a 9 percent stake, Jana could possible squeeze out two board seats who could act as potential change agents. Jana has even listed former Harris Teeter chairman and CEO Tad Dickson, former Safeway chief merchant Diane Dietz and former New York Times food critic Mark Bittman as co-investors who theoretically add credibility to Jana’s effort.
Whole Foods needs a shakeup. Its relevance is not in question. It is still the best in class, but not nearly as good as it was five years ago. The problem isn’t with its merchandising or its strong community connections; Whole Foods’ biggest flaw is the quality of its store operations. Labor training has suffered as the company has grown very rapidly and the fresh, local appeal of shopping a Whole Foods store has also waned. And competition, not only from other organics operators like Sprout’s, New Seasons and Vitamin Cottage Natural Grocers, but also from progressive conventional supermarket retailers like Kroger, H-E-B and Wegmans has also impacted WFM’s ability to drive same store sales.
Certainly there are other issues that come onto question – Jana mentioned those in its SEC filing including senior management, optimizing real estate, customer loyalty/analytics and its new “365” store model.
Most of those issues are legitimate including “365” which I believe is a long-term non starter. Perhaps the role of John Mackey also needs to be examined. He’s been a dynamic leader with great passion and vision, but after nearly 40 years atop the horse, maybe it’s time to bring in an outsider with different ideas.
These are very difficult challenges and certainly Whole Food is fixable. Don’t think Jana’s play is anything more than an effort to gain more profit. However, in doing so as a now important investor, the PE firm is asking the right questions and certainly putting its money behind its attempted change effort. And if that alone forces Whole Foods to make the improvements it’s been unwilling or unable to make, Jana’s investment will be beneficial in the long term for all parties.
Supervalu Making ‘Wholesaler’ Priority Clear With Unified Purchase; Retail Merchandising Consolidation
It’s been a busy month for Supervalu. The Eden Prairie, MN-based wholesaler/retailer made two significant moves to change its evolving business model. Earlier this month, it announced its intention to acquire Commerce, CA-based Unified Grocers in a relatively inexpensive $375 million deal.
The move came shortly after SVU said that its corporately-owned Farm Fresh Food & Pharmacy division, based in Virginia Beach, VA, would be shifting primary merchandising responsibilities to its sister supermarket organization, Shoppers Food & Pharmacy, based in Bowie, MD.
The Unified Grocers acquisition will enhance Supervalu’s presence on the West Coast where the retailer-owned wholesaler supplies independent operators. The transaction is valued at approximately $375 million, comprised of approximately $114 million in cash for 100 percent of the outstanding stock of Unified Grocers plus the assumption and pay-off of Unified Grocers’ net debt at closing (approximately $261 million as of April 1, 2017).
Together, Supervalu and Unified operate 24 distribution centers supplying customers in 46 states and serve a combined customer base of more than 3,000 stores. In a release, the company said combined organization will be uniquely positioned to efficiently serve a broad range of independent customers and offer a diverse array of value added services, helping customers compete in an increasingly demanding grocery environment. The acquisition also provides new growth opportunities across multiple geographies, including the expansion of Unified’s Market Centre division, a growing business providing specialty and ethnic products to independent customers.
“We’re thrilled at the opportunity to bring together these two great organizations,” said Mark Gross, Supervalu’s CEO. “By acquiring the Unified business, including gaining a wealth of expertise and talent, we will become a stronger and more efficient organization. The transaction will enhance our ability to help our customers better compete in the evolving grocery industry. We’re also excited to serve Unified’s dynamic retailer base. Unified’s members and customers operate some of the country’s most exciting and progressive Hispanic and multiple other ethnic formats, specialty, gourmet, natural/organic, price impact and traditional stores. They complement our existing customer base and we look forward to facilitating collaboration and innovation across such an impressive collection of creative merchants.”
Gross continued, “We appreciate the experience, intelligence and dedication of the Unified team, and look forward to welcoming Unified associates to Supervalu and supporting them as we continue the important work of contributing to the growth and success of our customer network and helping to deliver value to our stockholders. We will make a great team together.”
“We believe this transaction will benefit the members and customers of Unified Grocers as they look for new and innovative ways to serve the communities in which they operate,” said Bob Ling, Unified Grocers’ president and CEO. “Supervalu and Unified share a common vision of providing best-in-class services and products to the independent grocer. The cultural fit between Supervalu and Unified well positions the combined company to pursue a shared dedication and commitment to growth and innovation, providing increased value to customers.”
Unified’s earnings have declined in recent years – it posted a loss in each of the last four years, including a loss of $7.6 million in its most recent fiscal year that ended last October. Additionally, the wholesale co-op has seen its membership decline annually since 2008. Unified had 345 members at the end of fiscal 2016, down from 520 at the end of fiscal 2008.
In a conference call with analysts on April 11, Gross noted that Unified’s assets were very strong, adding that there was an opportunity to improve process particularly in the diverse Los Angeles market. Additional synergies lie in the Northwest U.S. where the two companies currently operate three distribution centers, all of which are underutilized.
The former C&S executive has previously touted Supervalu’s “back-end” services as an important value added benefit, and with the Unified deal he envisioned similar opportunities to create more efficiency.
“The infrastructure necessary to support a wide variety of different formats is very expensive,” he said. “It’s a tough world out there for smaller distributors who want to give a broad-based level of services and different types of product support. The world of having a vanilla-set of warehouses has long disappeared. But item variety is expensive, and IT infrastructure and sophisticated leadership all come with cost. And that’s what drives this type of deal and why I’m so excited that this creates this platform for the innovative, progressive, independent to compete in today’s market.”
The transaction, which was unanimously approved by each company’s board of directors, is currently expected to close in mid-to-late summer 2017, subject to approval by Unified’s shareholders and other customary closing conditions. Following completion of the acquisition, Unified Grocers will be a wholly-owned subsidiary of Supervalu and the Eden Prairie-based company will maintain an important and visible presence in Commerce, CA, Unified’s headquarters, and throughout the West Coast, including management and employees of the combined company.
Supervalu said it expects that by the end of the third year of operations after the completion of the transaction, the combined business will achieve a run rate of at least $60 million in cost synergies. These synergies will be primarily derived from utilizing the scale and expertise of the combined company as well as consolidation of select back office functions. To achieve these synergies, Supervalu expects to incur transition and integration costs of up to $60 million within the first two years following the completion of the transaction. The transaction is expected to be accretive to earnings per share, excluding the transition and integration costs as well as potential purchase accounting adjustments, in the first full fiscal year following closing which begins on February 25, 2018.
At Farm Fresh, 21 merchandising positions will be eliminated and those duties will be absorbed by current Shoppers’ merchandisers. The move reportedly will be effective on June 23. A Supervalu spokesman said that Farm Fresh’s current headquarters at 833 Seahawk Circle will remain open and that 40 associates involved in operations, loss prevention, IT, human resources and food safety will remain based out of that office. Additionally, 19 people will continue to work at the division’s central floral warehouse, also based in Virginia Beach. He added that Shoppers will be adding some new jobs to support its expanded organization.
As a part of this realignment, former Farm Fresh president Micky Nye now becomes regional VP of operations for an enlarged Shoppers division. She will report to Bob Gleeson, who will remain president of Shoppers.
The expanded Shoppers structure will now include 51 Shoppers Food & Pharmacy stores, 40 Farm Fresh Supermarkets and 22 Shop ‘n Save stores, which were acquired last year from Food Lion as a part of the government-mandated divestiture of more than 80 Ahold Delhaize owned units.
To several industry observers, the downsizing of Farm Fresh was not surprising given the fact that sales and market share have been shrinking for the last five years. Moreover, no new stores have opened during that period and the real estate pipeline for new stores and major remodeling has been negligible at Farm Fresh over the past decade.
With new CEO Mark Gross now even more clearly focused on SVU’s core wholesale business, the recent sale of its Save-A-Lot discount unit to Canadian private equity firm Onex Corp., industry speculation has been strong that the company is also looking to sell its more than 220 corporate stores.
Claus Out As Save-A-Lot Names Ex-Lidl Exec McGrath CEO
After approximately six months as CEO under new Save-A-Lot owner Onex Corporation, Eric Claus has departed. Effective April 21, he was replaced by Kenneth McGrath, the former Irish-born former Lidl executive who was named to president and CEO of the German discounter’s U.S. effort shortly after Lidl announced it would be entering the U.S. in 2013. He left Lidl in mid-2015 to be replaced by former Lidl Irish CEO Brendan Proctor, who still remains at the helm of Lidl’s U.S. operation based in Arlington, VA. The division of the privately-held Schwarz Gruppe is slated to open its first of more than 100 Mid-Atlantic and Southeastern U.S. stores beginning in June.
McGrath, 41, spent most of his adult career at Lidl Ireland beginning in 2001. He left for a brief period to join another Irish retailer, Superquinn, and returned to Lidl in 2009 to head up the discounter’s Irish operations. For the past 22 months he was chief executive of Digicel, a mobile phone network based in Jamaica that operates in 33 markets across the Caribbean, Central America and Oceania regions.
“We are thrilled that Kenneth has chosen to lead Save-A-Lot as we chart a new course for the company after its separation from Supervalu,” said Matthew Ross, chairman of the Save-A-Lot board of directors and managing director at Onex. “Kenneth is a strong executive that brings to Save-A-Lot tremendous experience in hard discount retailing. He is highly capable of building a world-class organization, investing in the company’s capabilities and systems, and returning Save-A-Lot to industry-leading growth by leveraging its unique market position.”
“The opportunity to lead Save-A-Lot at this exciting phase is a real privilege,” McGrath said. “Save-A-Lot has a proud history of delivering exceptional value to its customers throughout the U.S. I am looking forward to working with Save-A-Lot’s dedicated associates and licensees to serve customers in ways that enhance their experience and, in doing so, driving a period of sustained growth for the organization.”
And just before presstime, we learned that McGrath’s former right hand man, Kevin Proctor, has also joined Save-A-Lot as chief investment officer (according to his LinkedIn page). Proctor (no relation to current U.S. CEO Brendan Proctor) was another Lidl veteran who joined McGrath in the discounter’s initial foothold in the U.S. four years ago as executive VP-real estate and central services. He left with McGrath to join Digicell as COO in 2015.
Claus, 60, was named CEO of Save-A-Lot in December 2015 by then owner Supervalu. He continued as chief executive after Supervalu sold the discount chain to Canadian private equity firm, Onex Corporation for $1.37 billion last October. Claus has spent more than 30 years in the grocery industry, most notably with Red Apple Stores in Canada and with A&P as chief executive from 2005 to 2009.
Save-A-Lot operates 1,344 stores in 37 states and the Caribbean – 477 corporately-owned units and 877 which are owned by licensees.
‘Round The Trade
Personal surprise of the month: Justin Dye’s resignation as chief administrative officer at Albertsons. Not only is he a member of the vaunted “30 Pound Brain” club, Justin possesses a very unusual skill set that combines finance, M&A experience and a street sense of the grocery industry (his family was involved in the supermarket biz in his native Indiana). Plus he’s a great guy. Non-compete clauses aside, I expect Justin Dye to be the first pick on somebody’s draft board as CEO before very long…worst surprise of the year: the new supermarket tenant at 40th and Walnuts Streets in Philadelphia is (according to landlord University of Pennsylvania) – Acme Markets. Uh, not so fast. Current tenant Fresh Grocer disputes the university’s claim that the Wakefern member failed to renew its lease for the 34,500 square foot supermarket, which expired on March 31, in a timely manner. And the final decision, barring a settlement, will be decided in court of law. Fresh Grocer has occupied that space since 2001. This could get ugly…nobody should be shocked by the recent spate of industry speculation concerning possible sales of several grocery chains. The Jana Partners investment in Whole Foods has only added fuel to industry conjecture that the company will ultimately be sold. And it’s no secret that BJ’s Wholesale Club might be put on the selling block by principal owner, PE firm Leonard Green. Or that Albertsons might be eyeing Sprouts for a potential deal. And don’t forget that many regional supermarket chains, including Price Chopper and Giant Eagle, might be listening to outside offers. Currently, there are only two clearly identifiable strategic supermarket buyers – Kroger and Albertsons. But don’t discount Amazon from entering the bricks and mortar arena (a BJ’s purchase would help them). And while private equity has shied away from most retail food acquisitions in recent years (with the exception of Apollo’s strange decision to buy The Fresh Market last year), the money guys (who are never afraid of debt) could re-enter the buying derby, too. The effects of overstoring coupled with the diversity of retail styles in virtually every market in the U.S., is clearly creating more and more merchants to think about putting up the “white flag” while their companies still have significant value…two new VP spots have opened up at Weis Markets as VP-center store Kevin Broe and VP-marketing Brian Holt have recently left the company. Holt will be moving to a similar post at Spartan Nash, the Grand Rapids, MI wholesaler/retailer…veteran perishables executive Paul Kneeland, formerly of Kings/Balducci’s and Roche Bros. and most recently with Ahold’s Fresh Formats (bfresh) unit, has joined upscale Los Angeles-based merchant Gelson’s Markets as its new senior director of produce and floral…an update of a story from last month: the $15 an hour Baltimore City minimum wage bill is dead for now. Mayor Catherine Pugh vetoed the proposed legislation last month after the City Council voted to approve the measure in early March. Pugh, who first expressed support for the bill and then wavered, said she ultimately decided that if the bill became law it would have cost the city $116 million and also significantly impact other businesses…kudos to Colleen Wegman, who was recently promoted to chief executive of the family-owned uber chain. Her dad, Danny, who has served as CEO since 2005, will move up to the chairman’s role, and will continue to be active in the company’s activities which include 14 future store openings. “The time has come to create a structure for the future that will allow us to remain strong, vibrant and family-owned. I have no doubt that our company will be in good hands”…the gears are currently grinding at Ahold USA as the large retailer’s new merchandising realignment org chart should soon be revealed. Meetings were held recently in Quincy, MA (Stop & Shop’s headquarters) to determine which executives will be assigned to which divisions as the company essentially blows up its centralized merchandising department in Carlisle and will now focus on supporting its banners (brands) on a divisional basis…Kroger announced that it will reduce its new store and expansion plans this year by about 35 percent as part of an overall plan to reduce cap-ex by about 13 percent (from $3.7 billion to $3.2-$3.5 billion). Approximately 55 new projects are planned for this year – as opposed to 85 in 2016 – but the Cincinnati-based chain said about 175 major remodels will be completed by the end of the year. Kroger is essentially following an industry trend over the past few years in which supermarket operators have scaled back on building new stores (because of the cost and scarcity of prime real estate and overstoring from multi-channels) and concentrated on improving its existing physical store base. While we’re on the subject of overstored markets, is there a more competitive market on the East Coast than Richmond (which happened to be one of Kroger’s fastest growing areas – until Wegmans opened two stores last year)? The last three Martin’s stores (Ahold USA) that will be sold to Publix (as part of a 10-store package) will close in July. Publix has already taken possession of the other seven units it acquired as part of the Ahold/Delhaize divestiture effort and is working on remodeling them as I write this. The first Publix store in the Old Dominion’s capital should open later this summer. Publix will also be building two additional “from the ground up” units – a previously reported new store on Nuckols Road in Glen Allen and another supermarket Brandy Creek Drive and Mechanicsville Turnpike in Hanover County. Martin’s will also close another of the nine remaining stores it did not sell to Publix (Hull Street Road in Chesterfield County) on June 30 due to expiring leases. Ahold USA officials have not revealed Martin’s long-term exit plan for its Richmond area stores, but it seems like it’s only a matter of time before those store will also be shuttered. Not only will Publix be entering the market shortly, but so will Lidl. Multiple sources have told us that the German discounter has pushed back its U.S. debut to mid-June when as many as 20 stores could open the first week (followed by multiple store openings in subsequent weeks). The first group of openings will take place in Virginia, North Carolina and South Carolina. We hope to publish the opening round of locations in next month’s issue…more good news for the fine folks at Burris Logistics which recently renewed its contract to supply Acme Markets with frozens at its 178 stores in the mid-Atlantic. Burris and Acme have been frozen partners for more than 40 years in one of the industry’s strongest business relationships…7-Eleven will add to its national c-store dominance with the addition of more than 1,100 convenience stores from Sunoco. The deal is worth $3.3 billion (cash) and will significantly increase 7-Eleven’s store base in 18 states including the Mid-Atlantic and Northeast. When the deal is completed in Q4 of this year, the Dallas, TX-based c-store monolith will control nearly 10,000 stores in the U.S. and Canada…another small-format merchant with a big store count is about to get bigger. Dollar General, the “7-Eleven of the dollar store channel,” which lost out to rival Dollar Tree in its 2015 bid to buy Family Dollar, will gain 323 former Family Dollar units, after agreeing to purchase those stores from PE firm Sycamore Partners. Sycamore acquired that batch of “conflict” stores two years ago, which cleared the way for Chesapeake, VA-based Dollar Tree to spend $8.5 billion to buy the remainder of Family Dollar (Dollar General’s higher $9.7 billion offer was rejected because of antitrust concerns). Nearly half of the acquired stores are located in the Mid-Atlantic and Northeast… from the world of music we regret to report the passing of talented guitarist. J. Geils, founder of the very popular Boston-based J. Geils Band, died unexpectedly earlier this month at the age of 71. Geils
founded the band in 1967, while a student at Worcester Polytechnic Institute. His band mates included Danny Klein “Magic Dick” Salwitz, Stephen Jo Bladd, Seth Justman and the great Peter Wolf (who is still performing and remains “must see” live act). I have probably seen the J. Geils Band perform more than 30 times in my life and it was almost always a great show. J. Geils was a creative lead player whose style was blues-rock oriented. If you want a taste of the J. Geils band at its finest, I’d suggest listening to their “Live Full House” album…two influences from my youth have also moved to new headquarters. Joe Harris, the illustrator of both the Trix Cereal rabbit and superhero Underdog (voiced by Marlon Brando’s best friend Wally Cox), died earlier this month at the age of 89. In addition to creating the floppy eared white cartoon rabbit, Harris also wrote the signature line: “Silly rabbit! Trix are for kids.” A few years later, he created Underdog, which debuted in 1964 and became a staple of NBC’s Saturday morning lineup for three years. And although his career ran much longer than my ill-spent youth, my initial impressions of Don Rickles were formed from his many appearances on “The Tonight Show” with Johnny Carson. Rickles passed away at the age of 90 on April 6 in Beverly Hills, CA. One of the first of the insult comics, Rickles was actively performing until two years ago. He began his career in the late 1950s as a dramatic actor. An early role as an unscrupulous carnival owner (aren’t they all?) in the classic Roger Corman 1962 horror movie, “The Man With The X-Ray Eyes” remains a favorite. However, Rickles’ best role remains as ultra-nervous casino manager Billy Sherbert in the great Martin Scorsese film “Casino (1995).” But, if you are my age (as a few of you are) who could forget the many Rickles late night appearances with Carson, where his improvisational “attack dog” schtick was always delivered with lightning speed and cutting impact. How could you not laugh out loud? There may have been better comedians than Rickles, but few had his ad lib talent and amazing timing. May you rest in peace, hockey puck…finally, our condolences are extended to the Redner family on the passing of the company’s founder and patriarch, Earl Redner, who died earlier this month at the age of 91. “The Chief” truly personified his character in how he created and built the company that began with one store in Leesport, PA in 1970 after spending 29 years as an executive for the old Grand Union organization (where he was the youngest GU employee to hold the title of manager, district manager and store superintendent). He was also an innovator, creating an ESOP plan (employee-owned stock ownership) in 1975, the first such company in Pennsylvania to do so. Earl Redner was a tough guy with a heart of gold. His family, associates and community always came first. Having met “The Chief” in 1978 after acquiring Food World, I was not only initially impressed by his humility, but also by his razor sharp knowledge of how to properly operate a grocery store. It’s no wonder that the company remains very successful today with 53 grocery and convenience stores. “My father was a role model for not only myself and our family, but also the food industry. He lived a long, successful life and made a tremendous difference in the community. I’m thankful he was able to see his dream and company become more successful than he ever imagined. His spirit and enthusiasm remained high and he continued to attend board meetings, visit stores and would enjoy speaking with our employee-owners often,” said his son and current Redner CEO Dick Redner. A giant of a man, “The Chief” will be missed.
