The impact of COVID-19 had a major effect on sales and supply chains in all segments of the grocery business. The wholesale grocery channel was no exception as distributors struggled to keep their supply pipelines open during March, April and May, while also experiencing significantly higher volumes because of increased sales activity at their customers’ stores.
Leading the field once again was C&S Wholesale Grocers according to data compiled by Best-Met Publishing Co. The Keene, NH-based privately held wholesaler that supplies retailers such merchants as Stop & Shop, The Giant Company, Giant Food (all Ahold Delhaize USA banners), Tops Markets, Associated Supermarket Group, Foodtown, Gerrity’s, Geresbach’s and Key Food, had estimated wholesale revenue of $16.7 billion in the marketing area that ranges from the Carolinas to New England. The 12-month measuring period for the study ended November 30.
However, C&S’ perch atop the region’s wholesaler list may be in jeopardy beginning next year when Giant Food, The Giant Company and Stop & Shop will begin to transition into a self-distribution model that is scheduled to be completed by 2023. Another big customer, Key Food, has announced it will move to rival wholesaler UNFI late next year, too. And there was more C&S news to report: in October, chairman Rick Cohen tapped veteran executive Bob Palmer as the company’s new chief executive officer, replacing Mike Duffy, who was named C&S’ CEO in January 2018. Palmer returns after originally retiring from C&S as executive VP-chief procurement officer in September 2019 after 30 years with the wholesaler.
Ranking second among all retail distributors in the region was member-owned Wakefern Food Corp. which rang up an estimated $13.1 billion in wholesale volume. The Keasbey, NJ based co-op’s large volume is generated through the success of its more than 354 retail supermarkets under the ShopRite, Price Rite Marketplace, The Fresh Grocer, Dearborn Market, Fairway Market and Gourmet Garage banners in New Jersey, New York, Connecticut, Pennsylvania, Delaware, Maryland, Massachusetts, Rhode Island and Virginia, which includes dominant positions in the large Metro New York and Delaware Valley markets. Over the past year, Wakefern has added four-store Nicholas Markets (Maniaci family) to its roster that now operate as Fresh Grocer units, and its second largest member/owner, Village Super Markets, acquired five Fairway Markets (four in Manhattan and one in Westchester County). In 2019, Village also purchased three Gourmet Garage stores in Manhattan. And recently, the grocery co-op added its 51st member – Madison Foods – which operates three discount stores in the Boston area. Those stores, owned by the Slawsby family, were once Save-A-Lot units which will now operates under the Price Rite banner.
UNFI remained the third largest wholesaler in the market, with estimated volume of $9.2 billion in the Mid-Atlantic/Northeast region. The Providence, RI-based natural, organics and specialty food distributor grew significantly in 2018 with its acquisition of full-service wholesaler Supervalu for $2.9 billion. Since then, the organization has struggled. In 2019 it sold 13 of its Shoppers stores in Baltimore-Washington and closed six others; 24 more Shoppers stores are still on the block with little interest being shown by other operators. The past year has been markedly better, with much of its improvement fueled by sales during the COVID-19 pandemic. Additionally, former CEO Steve Spinner, who oversaw the Supervalu acquisition, announced that he will retire no later than July 2021. As previously noted, Key Food, the Matawan, NJ-based independent retailer co-operative, announced it 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. Other key retailers supplied by UNFI include Redner’s, B. Green, Karns, Graul’s, McCaffrey’s and Western Beef.
Two of the largest national convenience store wholesalers – McLane and Core-Mark – dominated c-store distribution in the region. McLane’s 12 warehouses serving more than 6,000 stores (including many 7-Elevens) amassed estimated regional sales of $2.79 billion; and Core-Mark supplied more than 2,300 c-stores and amassed estimated annual wholesale sales of $2.01 billion.
Family-owned wholesale grocers, the genesis of virtually all grocery distribution, remained an important part of the landscape, despite tremendous industry consolidation and disruption.
Bozzuto’s, owned by the Bozzuto family, continued its tradition of strong customer service and innovation. The Cheshire, CT-based wholesaler serviced approximately 1,180 independent stores, many of which flew the IGA banner, from three distribution centers and rang up estimated wholesale sales of $2.2 billion in 2020.
Merchant Distributors, Inc. (MDI), owned by the George family, remained the leading wholesaler in the Southeast, serving more than 700 stores (including Lowes Foods, the regional chain of nearly 100 stores that parent firm Alex Lee owns). Annual wholesale volume is estimated at $2.03 billion for the Hickory, NC-based firm. Earlier this year, MDI added the nine-store group of independent retailers – Family Owned Markets – that operate supermarkets in Pennsylvania and Maryland.
Two metro New York based distributors – Krasdale (owned by the Krasne family) and General Trading (owned by the Abad family) – also fared well in this year’s survey.
Krasdale Foods, based in White Plains, NY, supplied many independent retailers under such banners as AIM, Bravo, C-Town, Market Fresh, Shop Smart and Stop 1 – whose combined sales paced all independent retailers in the five boroughs of New York City. All told, the company serviced approximately 3,050 stores in the metro New York and Philadelphia markets and accrued estimated sales of $1.6 billion this year. Longtime executive and current president and COO Steve Silver announced that he will retire at the end of the year and will be replaced by Gus Lebiak on January 1, 2021. Lebiak will be moving from his post as SVP/COO at Alpha 1 Marketing, Krasdale’s sales and merchandising arm.
General Trading, based in Carlstadt, NJ, also serviced many independent merchants doing business in the areas in and surrounding New York City. Of the company’s nearly 3,500 stores it supplied, many were ethnic and specialty customers. Annual wholesale revenue was estimated to be $641 million.
Burris Retail Logistics, another family-owned firm that dates to 1925, continued to be a dominant distribution and logistics company throughout the region. Along with supplying supermarkets and club stores through its Burris Custom Retail division, the Milford, DE-based organization operates a public refrigerated warehouse division (PRW Plus), a transportation company (Burris Transportation) and a foodservice redistribution business (Honor Foods). Its retail distribution entity, known for its expertise in temperature sensitive products, supplied about 550 stores (supermarkets and clubs) which produced estimated wholesale revenue of $610 million in 2020.
Rounding out the list of leading wholesale companies in the region are the three club store merchants that operate stores nationally. We have broken out store counts and estimated sales for those units which operate in our coverage area. The nation’s largest club store operator – Costco –led the pack in the Northeast, Mid-Atlantic and parts of the Southeast with 77 stores and $5.92 billion in annual sales (extrapolated to include only food and related products). BJ’s Wholesale operated the most stores – 101 – which produced annual estimated sales of $4.01 billion (extrapolated) while Walmart-owned Sam’s Club’s 45 stores amassed $1.65 billion in extrapolated volume this year.