In its first ever “virtual” vendor meeting (hey, it’s 2020), Weis Markets announced that it is changing its approach to vendor funding and will move to a “trade rate” system in which ad fees, slotting fees, scan handling fees, store ship recap fees, in-store execution fees, electronic marketing redemptions, mix and match redemptions, volume incentives, new store opening billings and joint business plan fees will be eliminated.
In adopting a new go-to-business strategy, which will become effective in Q1 of 2021, Weis’ senior VP-marketing and merchandising Richard Gunn told a virtual audience of more than 1,000 suppliers, brokers and distributors that a goal of achieving simplification, transparency, flexibility and the ultimate ability to sell more cases with a trade rate-based system led to the change. Utilizing a trade rate system (which will be negotiated and customized for each vendor) is not a new concept (it has been deployed by smaller retailers, wholesalers and even regional chains for many years), but one which COO Kurt Schertle believes better fits Weis’ forward-looking strategy.
“We have established a trade rate with all vendors based on their historical spending with us, but obviously we will jointly negotiate for what we believe will result in a fair, and accurate mutual agreement. Our goal at Weis is to earn off-invoice money on every case we buy. No hidden fees, no game playing. As our business grows into new and changing areas, we need to become more creative and flexible. The trade rate approach allows for that better than the old menu-based model,” he said. Schertle, who cut his teeth in merchandising, is familiar with that approach from when he worked for discounter Shoppers Food Warehouse from 1988-2007. Schertle kicked off the hour-long video conference by the past year at Weis, most notably the effects of the COVID-19 pandemic. The 49-year old executive acknowledged that same-store sales have been very healthy (12.8 percent in Q1; 24.1 percent in Q2 – ended June 27) and he praised the regional chain’s 24,000 associates for their dedication and work ethic during very challenging times. He noted that, primarily because of construction delays related to the pandemic, the upcoming calendar will see five new Weis stores opening in the next five months. Included in that new batch are supermarkets in Dingmans Ferry, PA (a net new store that opens in early November); Bethlehem, PA (new replacement store); Gap, PA (new replacement store for an existing store that burned down); Macungie, PA (new replacement); and Martinsburg, WV (net new store). Another net new store in Warminster, PA will open in late 2021.
Schertle also noted that Weis now has more than 100 stores that offer beer & wine (in 2009 it had only a handful of stores) and 139 pharmacies, including a growing number of drive-thru units. He was also praiseworthy of the vendors, thanking them for all their help during the peak of the pandemic when supply chains were severely tested and said that Schertle was hopeful that sales reps will work effectively with its category managers to execute the retailer’s new joint business plan. He also noted that while the vast majority of suppliers have treated Weis fairly during the pandemic, but added that there were a handful of vendors that said they couldn’t deliver product although those items were available at Weis’ competitors. “Treat us fairly is all I ask,” Schertle explained.
Gunn then stepped up to the virtual podium and outlined the new joint business plan which he said was created to “provide a framework of best practices for both brand and category that maximizes opportunities for merchandising, shelf pricing, trade spend and assortment to build mutual sales and profit success while reducing complexities in our partnership.”
He also outlined some of the marketing and merchandising initiatives that Weis plans to create or carry forward into 2021. Those include multiple week print ads featuring separate ads for center store, HBC/GM and private brands. Plans call for Weis to expand its digital coupon offerings including utilizing more digital advertising focused on its successful “Fantastic Friday” promotion. He added that the retailer’s “Low Price Guarantee (LPG)” and “Local Items” marketing efforts will continue in 2021.
As such, Gunn’s “big ask” for next year is that vendors extend their deal periods to create greater efficiencies at store level, tag management, customer satisfaction and supply chain. That means that multi-week deals would be stretched into quarterly programs and semi-annual deals would be extended to annual promotions.
The former Food City executive, who joined Weis in 2015, then highlighted specific planning objectives of the new joint business plan: establish mutual growth goals for 2021; define strategies and tactics around product, pricing, promotion and placement to be used to achieve goals by brands and/or categories highlighted for promotionally priced every day, known value initiatives, low, low prices, and every day low price retails; validate historical and current trade funding rates utilizing “Tradeview Analytics” tools; and submit trade rate contracts in Weis’ vendor portal.
It was certainly a different kind of vendor meeting (although in the reality of 2020, virtual video conferences are now the norm), but one that was well executed with important messages delivered in a concise and timely manner.
And early returns from the vendor community also were positive (we talked to about 15 brokers and reps), with one senior VP of a large national manufacturer stating: “This trade rated-based system is ideal for Weis, which is growing significantly, maintains its own distribution center and wants to promote a transparent partnership with its vendors. All of us on the CPG side are tired of fighting with our customers about phantom fees which often can’t be justified. This is clearly a better system if we can negotiate a rate that both sides feel is fair and equitable.”
C&S Makes Wise Choice Luring Palmer Out Of Retirement And Into CEO Post
Veteran C&S Wholesale Grocers executive Bob Palmer will be returning to the largest wholesale grocer in the U.S. as the company’s new chief executive officer. Palmer replaces Mike Duffy. Duffy’s strength was viewed to be in the strategic supply chain arena, not as an operator or merchant. Palmer is known for his procurement and strong customer relations skills. He will report to chairman Rick Cohen.
Palmer retired from the Keene, NH-based wholesaler in September 2019 after a 33-year career with the privately-held distributor. He had held many positions at C&S since 1986 and most recently was EVP and chief procurement officer of the company before he stepped down 13 months ago.
Palmer originally joined C&S in February 1986 as head buyer and then served as director of procurement until 1995, when he added the title of vice president. In October 1996, he was promoted to senior vice president of nonperishable procurement. He became executive vice president and chief procurement officer in 2015.
Before joining C&S, Palmer spent four years at Riverside Markets, a Penn Traffic Co. division, in DuBois, PA, and served four years as a retail store manager in Albertson’s Southco Division in Florida and Alabama. He was named director emeritus of the Northeast Wholesale Food Distributors Association in 2002.
Duffy had served as CEO of C&S since January 2018, when he took the chief executive reins from Cohen. He joined the company after more than 11 years at pharmaceutical distributor Cardinal Health, where he served as president of hospital solutions and global supply chain. Prior to that, Duffy served as vice president of global value chain for the Gillette global business unit at Procter & Gamble. He was vice president of the North America value chain at Gillette when P&G acquired the brand in 2005.
“C&S has been a leader in the rapidly changing grocery industry for over 102 years. We will continue to drive innovation and adapt to the dynamic market conditions to better serve and support our customers,” said Cohen. “These unique times have required us to refocus our efforts and priorities. Bob is a highly valued leader that has led C&S through times of change with much success. His unrelenting focus on customer service and innovative go-to-market strategies have helped us win in challenging times and will undoubtedly serve us well as we transform for the future.”
C&S, which virtually invented the retail third-party logistics and warehousing model in the late 1970s, has endured some challenging times over the past 10 months. In addition to COVID-related issues which have affected the entire grocery industry, the company’s largest customer, Ahold Delhaize USA, announced last December that it would be shifting to a self-distribution model over the next three years, thereby eliminating the need for C&S to serve as the primary supplier for three of the company’s largest banners – Stop & Shop, The Giant Company and Giant Food. C&S and Ahold’s relationship dates back to 1990. That loss of business is estimated to be worth approximately $11.5 billion annually.
And earlier this month, another large C&S client, Key Food, said it will be leaving C&S late next year (after its contract expires). The Matawan, NJ retail co-operative with 318 stores, will shift its primary supply to UNFI, which is building a new distribution center near Allentown, PA that will open next year. That wholesale business is valued at about $1 billion annually.
By choosing Palmer, the nation’s largest wholesaler made an excellent choice in bringing Bob Palmer out of retirement to become its new CEO. There’s no doubt that the big distributor, controlled by chairman Rick Cohen, has lost some of its mojo in recent years due to a variety of factors including customer losses as a result of: self-distribution decisions (ADUSA); bankruptcies (A&P); competing wholesaler switches (Key Food); and inability to grow its independent base as witnessed by the loss of revenue at its Robesonia, PA regional headquarters. Part of C&S’ problems have lain squarely on management. Cohen is no longer CEO and frankly the last two leaders – president Mark Verdi and CEO Mike Duffy – both very smart men, had little feel for the “inside baseball” part of wholesaling. It didn’t help that executives like Palmer, Christopher Brown, Mike Newbold, Frank Puleo and Joy Sgro who had the grittiness and toughness that’s needed in wholesale, retired or left the company in the past few years. Palmer’s return finally gives the Keene, NH-based distributor a gifted executive who operates best from the playing field, not the skybox.
Spinner To Retire By July 2021 As UNFI Posts Strong Results, Gains Key New Customer
After two dismal years, UNFI, the large Providence, RI-based wholesaler has turned its balance sheet around and fueled by sales increases experienced during the COVID-19 pandemic, posted strong Q4 and year-end sales and earnings gains. The company announced that its current chairman, CEO (and unofficial Pope) Steve “The Spinmeister” Spinner will be retiring no later than July 31, 2020.
No longer needing as much “spin” as in bleaker times, the 60-year chief executive called his company’s 2020 fiscal year “monumental” as UNFI posted a net profit increase of 173 percent to $52 million for the period ended August 1, a 207.1 percent increase on a comparable basis. Revenue-wise, the 52-week numbers were also strong as UNFI posted record sales of $26.5 billion, an 18.9 percent gain over fiscal 2019.
“Our financial results in the fourth quarter and for the year produced record sales and adjusted EBITDA, driven initially by the strength of our innovation work and consumer demand driven by COVID, as well as UNFI’s execution success,” Spinner told financial analysts at the company’s conference call on September 29. “Fiscal 2020 was a monumental year for UNFI as the demonstrated flexibility and strength of our supply chain network led to full year results that exceeded our expectations. At the same time, we’re focused on keeping our associates safe and maintaining the food supply chain for communities across North America through the unprecedented events of 2020, including the pandemic, civil unrest, and natural disasters. We’re continuing to execute with passion and purpose on our strategy and expect further growth in fiscal 2021.”
A day earlier, the veteran distribution executive said he would be retiring from the company he has led since 2008 after the conclusion of the term of his employment agreement on July 31, 2021, or earlier upon the appointment of a successor. Spinner has agreed to remain on the board to serve as executive chairman following his retirement as CEO. UNFI said that its board has already initiated a search to identify UNFI’s next chief executive and, consistent with good governance practices, has engaged a leading executive search firm to assist in the process. The CEO search will include both internal and external candidates.
Commenting about his upcoming retirement, Spinner, said: “It has been my honor to lead UNFI over these past 12 years and a pleasure to have worked alongside our exceptional associates. We serve an important mission of delivering food to millions of people every single day. When reflecting on my tenure as CEO, I’m most proud of our people and our culture, where our shared beliefs drive everything we do. The future has never been stronger for UNFI as our integration work is nearing completion and we now look toward expansion of new services, technologies, brands and our vast supply chain network. In close collaboration with the board, I decided now is the right time for the company to transition to its next leader. As we enter the next chapter, I have great confidence in the strength of our team and the opportunities ahead and look forward to my continued service as executive chairman.”
Other key UNFI metrics in assessing fiscal 2020 include: a net loss of $274.1 million, compared with a net loss of $284.7 million in fiscal 2019 (a 53-week fiscal year); gross profit of $3.87 billion, compared with $3.2 billion in 2019; and adjusted EBITDA increase to $673 million, from $563 million a year ago.
UNFI also said it has paid $388 million of its long-term debt, now totaling $2.44 billion at the end of fiscal 2020.
In its 13-week Q4, the national wholesaler said sales from continuing operations were $6.75 billion compared to $6.26 billion last year when excluding the additional week in fiscal 2019, which accounted for $475 million in net sales last year. Retail identical store sales at its Shoppers Food and Cub Food units for the fourth quarter of fiscal 2020 increased 21.0 percent compared to the fourth quarter of fiscal 2019.
Operating expenses in the fourth quarter of fiscal 2020 were $884.1 million, or 13.09 percent of net sales, compared to $894.3 million, or 13.29 percent of net sales in the fourth quarter of fiscal 2019. The decrease in operating expenses as a percent of net sales was driven by leveraging fixed operating and administrative expenses over higher revenues as well as the benefit of synergy and integration efforts, partially offset by $31 million, or 45 basis points of net sales, of incremental costs related to COVID-19.
Operating income in the fourth quarter of fiscal 2020 was $79.0 million and included $20.6 million of restructuring, acquisition, and integration related expenses and $16.3 million of loss on sale of assets. Operating income in the fourth quarter of fiscal 2019 was $95.7 million and included a benefit from a goodwill and asset impairment adjustment of $39.8 million and a gain on sale of assets, partially offset by restructuring, acquisition, and integration related expenses of $19.4 million.
During the analysts’ conference call, UNFI CFO John Howard detailed an earlier reported realignment of its sales channels. Having put the sales of retailer Cub Foods and Shoppers Food on temporary hold, UNFI has shifted those assets in continuing operations.
In the new structure, the company’s “chain” sales now include all retailers with 10 or more stores (excluding Whole Foods). Independent retailers are classified as having fewer than 10 stores. Its supernatural channel includes Whole Foods.
During the fourth quarter, “Chain” sales increased 21 percent to $10.7 billion for fiscal 2020 (when viewed on an annualized basis) and increased 6.9 percent in Q4. Revenue from “Independent Retailers” grew by 21 percent to $6.7 billion for 2020 (when viewed on an annualized basis) and increased 11.4 percent in Q4. In its “Supernatural” channel, sales jumped 7.4 percent to $4.7 billion for 2020 (when viewed on an annualized basis) and increased 3.6 percent in Q4.
UNFI president Christopher Testa said the “Chain” channel accounts for about 40 percent of UNFI’s sales and stated that three customers filed bankruptcy in the second quarter of fiscal 2020 (Earth Fare, Lucky’s and Fairway), which caused a negative 270 basis points impact.
Looking forward, UNFI said it expects 2021 sales to reach $27 billion to $27.8 billion with net income in the $154 million to $183 million range.
“While we expect continued demand and strong results in the back half of the fiscal year, it’s important to keep in mind that year-over-year comparisons will moderate as we lap the pantry building that occurred at the outset of COVID during March and April of 2020. And while we still expect elevated demand in the third quarter, sales in that quarter are expected to be lower than the third quarter of fiscal 2020 due to the unprecedented stock-up surge as COVID began to spread,” Howard noted.
About a week after UNFI’S earnings release, the company announced that Key Food Stores Co-op has signed a new 10-year supply agreement with UNFI to service its 318 stores, most of which are located in the metro New York market.
The estimated $10 billion deal becomes effective in late 2021 following the expiration of Key’s current contract with C&S Wholesale Grocers, and the opening of a new UNFI distribution center in Allentown, PA.
The new 1.3 million square foot UNFI distribution center in Allentown (Lehigh County) is currently under construction and is expected to open in the fall of 2021. It will serve UNFI’s existing and new customers in the greater Northeast and surrounding areas and essentially replaces UNFI’s second-rate Harrisburg, PA depot, which UNFI retrofitted in 2018 after being forced out if its core Mid-Atlantic DC in Denver, PA when Acme Markets took possession of that greater than 1 million square foot depot after a transition services agreement between UNFI and its predecessor firm Supervalu expired with Albertsons.
UNFI also anticipates the new distribution center will create more than 500 local jobs. UNFI’s primary DC serving clients in the metro New York, Delaware Valley and Central PA areas is based in Harrisburg, PA.
Personally, I’m gonna miss the “Spinmeister.” His smugness and arrogance were rivaled by few in the industry over the past 20 years. However, you’ve got to respect his intelligence and craftiness. Not many could convince the board (which he largely controlled) to give its chief executive a 39 percent raise (to more than $7 million annually) last year when UNFI’s stock price was hovering in the single digits and the bleeding from the Supervalu deal was heavy.
However, the numbers improved markedly this year and the stock price regained some momentum (it closed at $16.69 per share on October 23rd, nowhere near the $35.51 level it traded at when the SVU deal was announced 27 months ago, but far better than the $5.50 nadir it sank to earlier this year).
The new CEO will have plenty of challenges to face including dealing with still significant debt accrued from the Supervalu acquisition, the ultimate divestiture of Shoppers Food and Cub Food stores (likely at less than the originally projected value) and declining comp customer sales, which all retailers will face once school and restaurant activity become more normalized when the pandemic fears subside. And in 2025, UNFI’s single largest customer, Whole Foods, will be free from its 10-year supply deal (reportedly worth $24 million annually) with the wholesaler. That contract was completed two years prior to WFM being acquired by Amazon in 2017, which is essentially a warehousing and logistics company itself. Personally, I view another contract extension as a longshot.
Still, with improved sales and earnings, a slimming of the debt, a diverse customer base and new distribution center ready to open in less than a year, UNFI is better positioned in the Mid-Atlantic and Northeast than any of its rivals.
‘Round The Trade
In addition to its Amazon Fresh retail expansion and its new alignment with SpartanNash, there is other Amazon news to report. “Godzilla” just completed its annual “Prime Day” (actually two days – October 13 and 14) and early results indicate that sales were good but not great. This year’s event was pushed back from July because of COVID concerns and the Seattle-based juggernaut said that third-party sellers, which account for 58 percent of the company’s total merchandise sold, rang up sales of more than $3.5 billion which would indicate that total “Prime Day” revenue would exceed last year’s sales bonanza of $7.16 billion. While Amazon has not yet announced total sales, analysts believed that “Prime Day” sales may have reached the $10 billion mark. Amazon said its single best-selling item was its Echo Dot voice-activated speaker as it offered 25 percent discounts for its six models with “Prime Day” prices that ranged from $18.99 to $99.99. With “Prime Day” being pushed back so close to the beginning of the holiday season and Amazon’s chief rivals Walmart (“Big Save”) and Target (“Deal Days”) also holding e-commerce events at the same time, it’s clear that big retailers are looking to piggyback and begin their holiday sales earlier, especially with most merchants closing on Thanksgiving and reimagining “Black Friday” by “controlling” brick and mortar sales while ramping up online promotions. For example, Walmart will be spreading out its “Black Friday” deals over three weekends in November and will offer exclusive online deals. Not surprising, since as we all know, “it’s 2020.”
Dollar General, the nation’s largest dollar store merchant, will soon open its first two poopshelf, er popshelf, stores in Hendersonville and Clarksville, TN near its Goodlettsville, TN corporate HQ. According to Dollar General, the new concept “aims to engage customers with a fun, affordable and stress-free shopping experience where they can find on-trend seasonal and home décor, health and beauty must-haves, home cleaning supplies, party goods, entertaining needs and much more—with approximately 95 percent of items priced at $5 or less.” Popshelf stores will be approximately 9,000 square feet and will offer a combination of continually-refreshed merchandise, seasonal specials and limited-time items while continuing to emphasize Dollar General’s discount philosophy. By raising the pricing bar to $5, the company said it is targeting customers who are primarily female and are located in diverse suburban communities with a total household annual income ranging from $50,000 to $125,000. If successful, Dollar General could open as many as 30 popshelf units in 2021.
Our buddy, former Giant Food president Anthony “Slick” Hucker, who now serves as CEO at Southeastern Grocers (SEG), is attempting to take his long beleaguered chain public. Gotta give “Slick” a lot of credit; he’s stabilized a once deeply-troubled merchant that’s endured decades of poor performance. In recent times, SEG has posted six consecutive quarters of positive comp sales, amassed $5.3 million in sales and $205.7 million in positive net income over its first 28 weeks of fiscal 2020 and is slowly beginning to open new stores and expand its Hispanic banner Fresca Y Mas further in Florida. He also made a critical decision to cut ties with its Bi-Lo operation and has improved the company’s culture substantially. But even a modest $100 million aggregate price maximum offering seems rather bold. Considering the Jacksonville, FL-based merchant is still losing money on a net basis and the temperature on Wall Street for IPOs is lukewarm at best. I understand that the investors who control SEG want to get their money back. So did Cerberus Capital, which waited 14 years to begin to withdraw some of the capital it infused into Albertsons (which went public in June), and then saw the IPO open at a price 25 percent less than the Boise, ID retailer had hoped. No harm in filing, but if SEG can manage to become a listed company in the next three years, Hucker wins my vote for retailer of the millennium.
Speaking of Albertsons, which launched its IPO in June, the big merchant posted strong Q2 numbers earlier. Identical store sales rose 13.8 percent and overall sales grew to $15.8 billion up form last year’s second quarter number of $14.18. Although earnings dipped a bit ($284.5 million vs. $294.8 million last year), that dip was attributed to a large boost the Boise, ID merchant received when it entered into several sales/leaseback deals. The most prominent gain of all came from digital revenue which increased 243 percent. The retailer said it expects ID sales growth of 15.5 percent for all of fiscal 2020. After informally polling about a dozen retailers during the past month, all noted that they believe the “new norm” has arrived at least in terms of sales performance. “Since early August, our sales have been steady and allowed us to better project volume moving forward,” said a senior VP of one of the Northeast’s largest chains. As long as restaurants remain at current seating capacity levels and schools are not fully open, I see a steady period of solid growth over the next three or four months. Until a safe vaccine that’s widely available, I feel the current buying patterns will remain in place. Asked about his stores’ ID sales performance, he said that based on the most recent 13-weeks, those comps are about 15 percent positive. That number is in line with the other retailers we surveyed who said their recent same store sales were in the plus 12-17 percent range.
Instacart, the San Francisco-based grocery delivery service firm which only began in 2012, just completed another round of funding, pulling in an additional $200 million from investors. While Instacart is the delivery service of choice for most of the country’s top food sellers with the exception of Target (which deploys its own Shipt unit to deliver groceries to itself and other retailers), it is not particularly loved by many retailers, some of whom acknowledged that doing business with Instacart is a “necessary evil” to compete in the grocery delivery game dominated by Amazon. With the new funding completed, Instacart’s market cap rose to a head-scratching $17.7 billion, more than doubling its worth of only 10 months ago. This stratospheric valuation is for what is essentially a $14 billion a year service company with a disproportionate amount of fixed assets vs. intellectual property. That valuation is also higher than most of Instacart’s customers including Albertsons, which amassed $62.5 billion in sales in fiscal 2019, but only has a market cap of approximately $6.8 billion…according to Whole Foods CEO John Mackey’s new book, “Conscious Leadership,” Berkshire Hathaway chairman Warren Buffett passed on opportunity to acquire WFM in 2017 when the health merchant was searching for a buyer. According to Mackey, the “Oracle of Omaha” wasn’t interested in purchasing the Austin, TX-based chain because “it wasn’t a good fit.” The best fit of all was for Mackey who shared in the financial spoils when Amazon payed a whopping $13.7 billion in cash for the company.
Bad name change of the month: Eskimo Pie will now be officially be known as Edy’s Pie. I get it, corporate owner Froneri is trying to connect an iconic item to one of its other well-known brands, but the new name lacks pizzazz and creativity. In attempt to do better, we polled some of our readers for their suggestions. Names we considered worthy included Indigenous Peoples Pie, Igloo Pie, Inuit Pie, Small Batch Ice Cream Pie and Revisionist Ice Cream Pie. Among the names we were forced to eliminate were Cow Pie and Hair Pie.
Local Notes
The Giant Company cut the ribbon on its newest store, a 51,000 square foot former Weis unit in the Swatara section of Harrisburg that the Ahold Delhaize USA (ADUSA) brand acquired last year and spent about $5 million to extensively remodel. Meanwhile, at corporate ADUSA, the Northeast’s largest supermarket chain said it will now disclose the percentage of food sales derived from healthier products. This is certainly an ambitious project and the big merchant will be working with Partnership for a Healthier America to assess branded and private label products that achieve one, two, or three-star ratings as part of its proprietary Guiding Stars nutrition program. I’m assuming that multiple purchases of Oreos, Haagen Dazs and Di Giorno pizza won’t qualify for sales disclosure. Also, on the corporate level at ADUSA, Chris Lewis, executive VP-supply chain for Retail Business Services (RBS) and another dude with a big brain, provided an update about the retailer’s progress in shifting to a fully vertically-integrated distribution model by 2023. Beginning next year, company-owned perishables DCs in Jessup, MD, Carlisle, PA and Freetown, MA (including grocery) will be folded into the corporate model as will newer facilities in Manchester, CT and Mauldin, SC (which was acquired in a deal earlier this year with Southeastern Grocers). In 2022 and 2023, other depots in York, PA (grocery and frozen), Chester, NY, two DC’s in Bethlehem, PA and frozen warehouses in Plainville, CT and Mountville, PA (in partnership with Americold) will join the network. Some of those facilities were originally warehouses operated by C&S Wholesale Grocers, which had served as primary suppliers to original Ahold banners Giant Food, The Giant Company and Stop & Shop since 1990. ADUSA’s other banners – Food Lion and Hannaford – have utilized a self-distribution model for decades.
Wakefern has rolled out its new Fresh to Table store-within-a store concept which focuses on offering its customer healthy meal solutions and other on-trend produce and fresh food offerings (prepared foods, heat & eat items, grab & go products). The Fresh to Table concept was launched at three ShopRite units in Greenwich Township, NJ (owned by the Colalillo family; Joe Colalillo is also chairman and CEO of Wakefern); Burlington, NJ (owned by the Eickhoff family); and Monroe, NY (a corporately-owned store that is part of SRS). If all goes well with the initial pilot, expect more ShopRites to add this new concept to its floor space. Village Super Markets, Wakefern’s second largest and only publicly-traded member, posted solid second quarter numbers for the period ended July 24. The Springfield, NJ merchant saw overall sales increase 19 percent and profit grow by 37.2 during the 13-week period. Same store revenue rose 7.5 percent and digital sales soared 240 percent. With so many people leaving New York City (especially Manhattan) because of the COVID pandemic during the past seven months, Village’s acquisition of five Fairway Markets in May (four in Manhattan) has produced diminishing sales (but a profit gain) at those locations. In 2019, Village opened its first stores in Manhattan when it acquired Gourmet Garage’s three units. “Sales in Gourmet Garage and Fairway have declined significantly compared to historic levels due primarily to population migration out of Manhattan during the pandemic,” the company noted in its press release. The truth of the matter is that things are not likely to change anytime soon for those stores, which are also in need of remodeling and other upgrades. And unlike its high-volume suburban stores which have benefitted from Wakefern’s ShopRite At Home and other delivery services during the pandemic, those ancillary offerings aren’t as strong in Manhattan where FreshDirect and Amazon control the grocery delivery business…Target has confirmed it will build a 130,000 square foot store at a former Sears location in Yonkers, NY. Target has about five other projects under development in adjacent New York City, but most will follow the mass merchant’s urban model with stores under 40,000 square feet. The Yonkers store should open late next year.
Kehe, the Romeoville, IL-based organic, natural specialty and ethnic distributor which has increased its presence on both the East and West Coasts over the past five years, has opened a new 550,000 square foot distribution center in North East, MD. The new depot will serve Kehe’s customers (which include Acme, Safeway, Shaw’s, Sprouts and MOM’s Organic Markets) more efficiently with improved delivery times and increased speed-to-shelf of new items. The North East depot is Kehe’s 16th distribution center in its national network.
This year’s delayed New Jersey Food Council’s (NJFC) trade relations conference was an excellent event, proving that virtual/remote presentations can still be educational and interesting. Albertsons Mid-Atlantic division president Jim Perkins kicked-off the meeting and provided an overview of the retailer’s new organizational structure which recently combined the Acme and Safeway/Eastern divisions which will now contain 275 stores and garner annual sales exceeding $6 billion. He also told the remote audience of how Acme prepared and executed its Pandemic plan, which resulted in high marks from vendors, consumers and even competing retailers in the critical areas of in-store service levels and associate morale. Key pre-planning priorities were aggressively purchasing product in February (before the pandemic created major chaos), increasing inventory at its Denver, PA distribution center, identifying and working with alternative supply sources, creating an operational plan that could be executed, and deploying office staff into the stores to help. The “Hillbilly from Philly,” who’s one of the most humble and gracious executives in the entire grocery biz, also went out of his way to thank the vendors for their “extra effort” during challenging times. When you see Jim in the trade (and who knows when that will be), ask him about his experience with Hometown Foods in trying to wheel and deal for some Pillsbury Flour during the height of product hoarding which made flour and baking supplies difficult to find. If you noticed more Funfetti items in Acme, Jim will explain why that is. After Perkins spoke, the NJFC presented the Max Stone trade relations award to our own Maria Maggio and Kevin Gallagher for their many contributions to the industry which in their combined careers entails more than 70 years of service. As I said earlier, when Maria and Kevin were first announced as winners of the Stone award, I am happy and proud because they are not only talented, executives but also great people. The conference closed with an industry panel featuring Kathryn Fair of Unilever, Kimberly Senter of Advantage Solution and Chris Skyers of Wakefern who discussed some of the lessons learned from COVID-19. KraftHeinz’s Nick Brown moderated the interactive discussion. A tip of the hat to NJFC president Linda Doherty and her team for putting together an unconventional but compelling event under challenging circumstances.
It’s been a tough month on the obituary front, especially for several Hall of Fame baseball players. Earlier in 2020, we lost Al Kaline, Lou Brock and Tom Seaver. And in just the past 30 days, also passing on were Bob Gibson, “Whitey” Ford and Joe Morgan, all of whom had stellar careers at their positions.
Bob Gibson, 84, was a long-time teammate of Lou Brock on the Cardinals and was arguably the most dominant pitcher of the mid-1960s and early 70s. The Omaha, NE native pitched his entire 17-year career with St. Louis and among his notable achievements were winning the National League’s MVP award as well as the Cy Young award in 1968. In that incredible season, Gibson won 22 games, struck out 268 batters and pitched an incredible 13 shutouts while posting an even more other-worldly ERA of 1.12. Like Brock, he was especially dominant in World Series play, where he won seven games in a row and still holds the World Series record of most strikeouts in a game – 17 – against the Detroit Tigers in 1968. Other highlights of his career include eight All-Star game selections, nine Golden Gloves and a no-hitter against the Pirates in 1978. Gibson was voted into the Baseball Hall of Fame in 1981, his first year of eligibility.
Edward “Whitey” Ford, 91, was known as “The Chairman of the Board” for his pitching prowess as a New York Yankee from 1950 to 1967. During his career, “Whitey” (is “Whitey” even a nickname anymore?) pitched on 11 pennant winners and six World Series championships for the Bronx Bombers. During his career, which was interrupted for two years while he served in the Army during the Korean War, Ford won 236 games, the most of any Yankee in their long history. He also had a career winning percentage of .690, still the highest among pitchers with 200 or more victories in the 20th century. He was inducted into the Cooperstown in 1974. Even though I’ve been a Yankee hater for most of my life, I’ve always had a soft spot for Ford, who was a funny, wise-assed New York native who never took himself too seriously. And unlike Bob Gibson, who was the prototype of an alpha-male hurler, throwing the ball 95 mph while also trying to intimidate opposing hitters, Ford was the ultimate finesse magician, fooling hitters with curveballs, scuff balls and a deceptive fastball that probably topped out at 85 mph. His control was impeccable, and hitters seemed baffled as they made outs on what they thought was underwhelming stuff.
Also leaving us was the great Joe Morgan, 77. One of the smallest men (5’7” and 160 pounds) to enter the Hall of Fame (in 1990), Morgan was just a great all-around player. He was a fielding wiz at second base, winning five consecutive Gold Gloves. He hit 268 career home runs and walked more than 100 times and scored more than 100 runs for six straight seasons, and in a career that lasted 23 years, he also stole 689 bases. Morgan began in the big leagues at the age of 20 with the old Houston Colt .45s (now the Astros who were then in the National League) in 1963. In 1972, he was traded to the Cincinnati Reds and became a key cog, along with other Hall of Famers Johnny Bench, Tony Perez and Pete Rose, to form the nucleus of the Big Red Machine teams that won five division titles and appeared in four World Series from 1970 to 1977. He was named the National League’s MVP in 1975, arguably the team’s best season when he batted .327, hit 17 homers, drove in 94 runs and stole 67 bases.
The very underrated Mac Davis, 78 has also passed away. Davis had a solid career as a country singer with 16 Top 40 singles. He was a songwriter of note, penning two of Elvis Presley’s hit songs – “In the Ghetto” (1968) and “A Little Less Conversation” (1970). Mac Davis also appeared in 33 film and TV roles, including a very notable debut in “North Dallas Forty” (1979) which was adapted from former Dallas Cowboy player Pete Gent’s hilarious novel. As quarterback Seth Maxwell, Davis played sidekick to Nick (Poot) Nolte and his cynical view of professional football. Davis’ sarcastic, low-key style contributed greatly to one of the best “inside football” flicks of the past 50 years.
And, finally, music fans have lost one of the greatest guitar players of all time with the passing of Eddie Van Halen at the too young age of 65. Van Halen’s playing, which included his unique tapping style (tapping on the fretboard usually with two hands to create notes), was rarely subtle but his technique, coupled with his ability to create different sounds and tones with his custom built ax, was unique among all rock players and influenced thousands of players over the past 45 years His inspiration was the iconic Eric “Slowhand” Clapton, although Clapton’s and Van Halen’s styles were highly differentiated. All told, the band Van Halen sold more than 56 million albums in the U.S. and they were inducted into the Rock and Roll Hall of Fame in 2007. Perhaps his talent was best summarized by his friend and fellow virtuoso player Joe Satriani who commented: “Eddie put the smile back in rock guitar at a time when it was getting a bit broody. He also scared the hell out of a million guitarists because he was so damn good.”
