In the five years since Sprouts Farmers Market opened its first store in the Mid-Atlantic region in 2018 (in Ellicott City, MD), the Phoenix-based fresh-oriented retail has grown at a very modest pace.
That’s about to change with the recent announcement that the retailer will open six new stores in the next 24 months in Pennsylvania, three of them in Philadelphia. That announcement comes about a month after the chain cut the ribbon on another Philly area store in Haddon Township, NJ, Sprouts’ 400th overall store.
Philadelphia is where the company opened its first PA store in late 2018 (at S. Broad and Carpenter Streets). The new Philly stores that are set to open by the end of 2025 are located on Roosevelt Boulevard (Roosevelt Mall, which was previously reported), 23rd and Oregon (also previously reported), and Columbus Boulevard. Other PA units are scheduled for York, PA and Limerick, PA with details about a sixth location not yet revealed by the company.
Earlier this year, Sprouts said it would add 30 new stores to its growing almost national store base in 2023. In addition to its Haddon Township debut in September, the natural and organics merchant plans another Mid-Atlantic opening on November 10 in Burtonsville, MD. Other ribbon cuttings planned for the entire region include new stores in Westminster, MD and Leesburg, VA. Earlier this year, another unit opened in Manassas, VA. In 2024, the publicly-traded chain said it will open 40 new stores.
Under the leadership of one of the best store operators in the country, Dan Croce, senior VP-real estate and new store development, Sprouts has produced solid sales at its current 12 stores in the Mid-Atlantic but is somewhat handicapped by not having its own distribution center in the region.
It’s an issue that I’ve discussed with the former Acme Markets president, who has said finding the right property in the right location has been a challenge, but one that he feels confident will eventually happen.
In an era, when very net new stores are opening (Except for limited assortment discounters Aldi and Lidl), it’s impressive to see a company like Sprouts step on the gas and aggressively seek increased market share in a region as overstored and competitive as the Mid-Atlantic.
‘Round The Trade
And the winner is…Tim Wentworth. Hold on, did I say “winner?” Let me rephrase that. And the new chief executive officer of Walgreens is Tim Wentworth, former senior executive for Cigna Health. Specifically, he was CEO of Evernorth, the large insurance carrier’s health services unit. Prior to the he was chief executive of Express Scripts, a large pharmacy benefit management (PBM) company. Wentworth replaces Roz Brewer, who departed last month after a short two-year tenure as the leader of the Deerfield, IL-based drug chain. Here’s what Wentworth is facing as he onboards on October 23: a Q4 earnings decline of 29.4 percent (ended August 31) coupled with Walgreens’ comp store sales declining 3.3 percent. At parent firm Walgreens Boots Alliance (WBA), the 4th quarter numbers are far worse: net operating loss of $180 million in Q4 (a whopping $3.1 billion for fiscal ’23). Add to that, hundreds of Walgreens pharmacy associates in multiple states have walked off their jobs on October 9 That move is in protest of working conditions that employees say have made it difficult to do their job. Pharmacy workers say they’re facing staffing shortages that put patient safety at risk. About 300 of Walgreens’ pharmacies have been impacted thus far, but associates say that more walkouts will occur if conditions don’t improve by the end of October. And then there’s billions of dollars of opioid-related litigation exposure that needs to be resolved. Good luck, Mr. Wentworth
Inflation continues to be a sticky wicket in the national economy and also for retailers. According to the September Consumer Price Index (CPI), overall inflation inched forward by 0.4 percent (mainly driven by increased fuel prices) and food-at-home costs increased only 0.1 percent but the cumulative double-digit price hikes over the past two years continue to put a strain on the American shopper. According to Andy Harig, FMI’s VP-trade sustainability and policy development: “The September CPI report demonstrates that food-at-home inflation continues to stabilize and provide shoppers with a more consistent and predictable shopping experience. The monthly inflation number for food at home declined to 0.1 percent and – particularly heartening – cereals and bakery products dropped for the first time since the summer of 2021. This continued leveling off – and for certain commodities lower inflation levels – provides reason for consumers to be optimistic.” Reason to be optimistic? – I don’t think so, but the proof will be in the pudding as merchants release their Q3 and Q4 earnings over the next six months. And September data from the Brick Meets Click/Mercatus Grocery Shopping survey indicates that online grocery purchases were down once again, declining 3.1 percent (year-over-year) and continuing a monthslong dip in ecommerce sales.
Dollar General, the dollar store juggernaut which operates some of the most hazardous stores in the business (according to OSHA), has brought back former CEO Todd Vasos to helm the ship of the struggling Goodlettsville, TN discounter. Vasos, who was chief executive of the country’s largest dollar store chain from 2015 to November 2022 (he remained on the company’s board), will replace the newly “retired” Jeffery Owen, who took Vasos’ place. Gee, all of these “retirements” seem so sudden…at rival Dollar Tree, the Chesapeake, VA-based merchant said it will invest $100 million to “reimagine and refresh” its 850,000 square foot distribution center in West Memphis, TN which closed in 2022 because of a massive rodent infestation. That “rathouse,” which was operated by Dollar Tree’s Family Dollar unit, is slated to reopen in about a year…Walmart (and Sam’s Club) said that it will reclassify its corporate staff’s job titles next month in an attempt to be more market competitive. There will be fewer groups of titles, but the responsibilities and roles and their associates will not change. Kim Lupo, who runs the “Behemoth’s” global rewards program, recently told The Wall Street Journal that the move is “good compensation hygiene and will ensure that Walmart appropriately rewards similar levels of work.
At UNFI, Chris Testa, president of the company who first joined UNFI in 2009, has departed. Testa was a holdover from the Steve “The Spinmeister” regime. Douglas will now also assume his duties.
Local Notes
Just before presstime, on a quiet Sunday evening, Rite Aid finally announced it would seek Chapter 11 bankruptcy protection. The Philadelphia-based drug chain, the third largest in the U.S., had few options left after years of mounting losses and the prospect of having to pay billions in fines in lawsuits stemming from its role as an opioid dispenser. In the filing, Rite Aid said it has raised $3.45 billion in new funding from lenders which will allow it to provide “sufficient liquidity” to continue operations as it undertakes its restructuring plan. Additionally, Jeffrey Stein, founder of Stein Advisors, a financial advisory firm that works with troubled companies, has been named CEO and chief restructuring officer replacing Elizabeth “Busy” Burr, who served as interim chief executive when former CEO Heyward Donigan departed earlier this year. Rite Aid, which employs 45,000 associates, could close as many as 500 stores (it operates about 2,000 units). In its filing, the drug chain listed its largest creditors as the McKesson Company and Humana Health. The company also said that it is working on a potential deal to sell Elixir, the pharmacy benefit manager it bought for $2 billion in 2015, to MedImpact. After an especially poor first quarter which ended June 3, Rite Aid’s value really began to plummet. Its market value dwindled to less than $40 million (in 1998, its market cap was nearly $13 billion) and its share price was down to $0.65 per share, an 80 percent decline since the beginning of 2023.
At The Giant Company (TGC), kudos to company veterans Dave Lessard and Rebecca Lupfer, who have both been given new assignments. Lessard has been named senior VP-operations, customer experience and perishable distribution. He will now oversee TGC’s retail operations, perishable distribution and transportation teams. The Virginia native has been with the parent organization (then Ahold USA, now Ahold Delhaize USA) since 2002 when he joined Giant Food as director of produce after 25 years with A&P (remember them?). He began working for TGC in 2018 as VP-fresh merchandising, where he supervised all perishables departments. Last year, Lessard was given additional duties to oversee the company’s perishable distribution center in Carlisle. As for Lupfer, she has been named the regional chain’s chief financial officer, marking a kind of full circle for the talented executive. Lupfer began her grocery career at Ahold Financial Services in 2005. In 2016, she shifted gears at the parent company to become portfolio lead for seasonal merchandising. After the Ahold merged with Delhaize and the two companies became less centralized, Lupfer joined TGC as director of merchandise planning and then to VP-merchandising for center store. In early 2022, she was named VP of the retailer’s Mid-Atlantic division overseeing store operations at 100 Giant and Martin’s stores in Central and Western PA, MD, VA and WV. As CFO, Lupfer will now lead the finance, format, real estate and strategy departments.
There are several new and future store openings to report including the newest McCaffrey’s Market which opened last month in Gladwyne, PA, one of the most affluent areas of the Delaware Valley. Despite several delays, Jim McCaffrey III, his son Jim IV and the entire team did a great job of designing and merchandising the 25,000 square foot unit, the company’s eighth store.
After an even longer wait, Whole Foods announced that it will cut the ribbon on its 51,569 square foot store which will debut in Jersey City on November 9. We first reported this store as a future opening way back in 2016, however, there were multiple issues – planning, zoning and a change of location – that caused the protracted delay. About 15 miles northwest of Jersey City, Stew Leonard’s officially broke ground on its eighth store and second in the Garden State. The 56,000 square footer is scheduled to open next summer.
Earlier this month, the largest Asian grocer in the country, H Mart, celebrated the grand reopening of its first store in Woodside, Queens after closing the store about two years ago for extensive renovations. H Mart now operates about 90 stores in 14 states.
The most anticipated opening of the month was Wegmans’ first Manhattan unit on Astor Place (770 Broadway). The 87,500 square foot two-story supermarket was originally a John Wanamaker department store and later became a Kmart (1996-2021) before Wegmans announced it would build its second NYC store (its Brooklyn store debuted in 2019. Approximately 600 associates have been hired to work at the uber-retailer’s 111th store. The Rochester, NY-based merchant also said it has begun hiring and training at its 88,000 square foot Yardley, PA store which will open early next year. Wegmans will also debut its first Long Island store later in 2024 in the upscale community of Lake Grove.
Discount operator Dollar Tree and solar energy solutions company DSD Renewables have formed an alliance to construct seven new solar-powered facilities in upstate New York. The community solar portfolio will be utilized to power select Dollar Tree and Family Dollar stores in the area and will be located in East Syracuse, Cortland, Remsen, Medina, Silver Creek and Brier Hill. Earlier this year, Dollar Tree announced its commitment to set a science-based Net Zero target of no greenhouse gas emissions) by June 30, 2024.
From the obit desk this monhth, Dick Butkus, one of the greatest football players of all-time, and arguably the best linebacker in the history of the NFL, has left us. In his era (1965-1974), nobody was more feared than Butkus, whose bone-rattling tackles made opponents focus their game plans around defending him. Knee injuries prevented him from playing for more than nine years, but during that span he was elected to the Pro Bowl eight times and was inducted into the Pro Football Hall Of Fame in 1979, the first year he was eligible. His number 51 has also been retired. Ironically, Butkus and his fellow teammate and HOF member Gale Sayers never played in a playoff game. After he retired, Butkus was asked if he ever attempted to injure an opposing player. “I wouldn’t ever go out to hurt anybody deliberately,” he facetiously said. “Unless it was, you know, important…like a league game or something.” After football, Butkus turned to film and television work (62 acting credits) and also served as the color analyst for the Bears for a time. The toughest “Monster” of the Midway was 80 when he died.
