Having just completed his first full fiscal year as president of Wakefern, it’s time to issue the initial report card for Mike Stigers.
Measurably, the largest wholesale grocery cooperative in the country had a very strong year with its member-owned supermarkets and corporately controlled stores achieving record sales – $20.1 billion – in a marketplace where new food retail stores continued to create an even more competitive landscape than ever. Wakefern was also able to increase its already dominant market share in two of the country’s largest markets – New York Metro and the Delaware Valley. That’s no small achievement, when you add in significant inflation moderation. In fact, growing revenue for any food retailer over the past 12 months has been challenging.
On a more intangible level is the job that Stigers has done in smoothly refashioning Wakefern’s culture since he arrived in June 2023. For many years, there was no better run company than the Keasbey, NJ-based wholesaler. Sure, there were internal skirmishes between the members and owners at times, but when the whistle blew, both sides worked in harmony to offer consumers and the trade a very successful product.
However, over the past decade, Wakefern began to lose some of its luster. Those subtle changes might have been imperceptible to the consumer, but those in the trade could feel the shift which included the departure of several key leaders (executive VP Chris Lane, senior VP Jeff Reagan and several others). Wakefern was still great and powerful and no executive over the past 15 years can claim a better track record than Joe Sheridan, the man Stigers replaced. However, multiple trade observers noted that the culture inside Wakefern had become insulated and somewhat stale.
“Is it a blessing or a curse to have so many talented executives in the same tent?” wondered one New Jersey-based food brokerage executive who has called on Wakefern for more than 30 years. “Because of age and some tunnel vision, some of the sharpness and insight those executives brought to the table for many years waned to a degree. The trade knew Wakefern needed to refine its culture so it could become more vibrant and progressive again. At the same time, the membership culture was also changing – younger generational owners were now taking more control of their families’ businesses, and their demands were often different from their fathers or uncles. Changing horses when your company has had a long history of success might be one of the most daunting challenges any company can face.”
In 2022, Joe Sheridan announced that he would be stepping down as president. He had held that title since 2011 and spent his entire 47-year career with Wakefern. Replacing a beloved industry icon would be difficult. After a detailed five-month search, the co-op announced that Mike Stigers would serve as Wakefern’s day-to-day leader. On paper, he was a curious choice.
After all, he would become the first outside president in the company’s 78-year history. Moreover, he had little direct experience on the East Coast (only a stint as president of Shaw’s/Star Market in New England from 2011-2013) and many felt that absorbing the specific challenges of the New York Metro market would be disadvantageous as would successfully assimilating himself into the unique Wakefern/ShopRite culture. Additionally, at age 64, analysts wondered how much more he had in his tank.
The skeptics were wrong.
For those who did not know Stigers from his previous industry experience (50 years), you would quickly recognize how knowledgeable, prepared and versatile he is. After a few months, one could also appreciate his excellent people skills.
Simply said, shortly after he arrived, he won over Wakefern’s associates with his respectful, easy-going manner. Observers were also impressed by his bluntness.
“From early on, he was honest with us,” said a Philadelphia-area member whose family has operated ShopRites for more than 30 years. “I was excited that he was interested in creating a dialogue between members and corporate Wakefern from the start. The industry has been rapidly evolving over the past decade and we knew changes needed to be made. He sought us out to get our input. Frankly, Mike and his team have improved many aspects of the company.”
There’s still much to accomplish, but when given his own show to run, Mike Stigers has proven to be one of the best leaders in the entire grocery industry.
I’d put his first year GPA at 4.0.
With Albertsons’ Future Unclear, Donald Assumes Sole Chairman Role For Chain
If there was an underpublicized story over the past month, it was the naming of industry veteran Jim Donald as the sole independent chairman of Albertsons’ board. Since 2019, Donald has shared the chairman’s duties with Chan Galbato, a Cerberus Capital Management (CCM) executive who represented the large private equity firm’s holdings in the Boise, ID-based retailer.
Obviously, things remain fluid with Albertsons as they await rulings from two state courts (Washington and Colorado) and a U.S. District Court in Portland, OR as to the legality of the $24.6 billion proposed merger between Albertsons and Kroger which first proposed their alliance more than two years ago.
Many industry observers and analysts have predicted that the FTC will prevail in its argument that the merger would be anticompetitive (although the results of the presidential election might change the makeup of the agency as well as the shelf life of chairwoman Lina Khan).
Nonetheless, Albertsons has to be prepared for the worst-case scenario. Unfortunately, of the 11 men and women on the retailer’s board of directors, only Donald, Kevin Turner (ex-Walmart) and current CEO Vivek Sankaran have any retail food experience as grocery retailers. That’s a problem for a company that is likely to be up for sale (if the merger falls through) as the board primarily consists of executives of other unrelated businesses as well as financial leaders. The prominent example of the latter can be seen in new board member Stephen Feinberg, who essentially replaced Galbato as CCM’s lone board member. Feinberg is no ordinary hedge fund manager – he’s the co-founder and co-CEO of one of the largest private equity companies in the world ($66 billion of assets under management). His new board membership is clearly an indication that CCM is concerned about the future of its investment, which dates back to 2006. Over the past year, Albertsons’ stock price has declined about 15 percent (to a current $19 per share).
If the courts ultimately reject the merger attempt, both Kroger and Albertsons will be in at least short-term scramble mode. For Kroger, a write-down for a quarter or two shouldn’t prevent the forward momentum it’s achieved over the past decade. However, Albertsons’ condition would be much more unpredictable with a sale of its assets likely.
And that leads me back to Jim Donald. He’s the only leader capable of keeping the company stabilized should a transition be warranted. It’s pretty obvious that beyond the balance sheet (which has been solid) the underlying layers are fragile. Old stores, uncompetitive retail prices and apathetic associates are indicators of a much deeper problems.
Donald, from the boardroom, and possibly Susan Morris (current COO and potentially the chain’s next chief executive) are the best solutions to steady the company’s near-term future if the merger effort fails. A post-merger lineup (should the merger be denied) likely wouldn’t include current CEO Sankaran (sorry about the $43 million exit package) as well as several other c-suite geniuses that the former PepsiCo executive brought in on his watch.
If the merger fails and the company attempts to sell, it’s likely that original divestiture partner C&S also won’t be part of the final acquisition process. You can make a case that Jewel in Chicago and Safeway in Northern California would attract tremendous interest. One can also envision that a regional chain like Save Mart (led by former Albertsons executives Shane Sampson and Jim Perkins) could make a play for purchasing supermarkets in California and the Pacific Northwest. However, markets like Arizona, Colorado, Baltimore-Washington, the Delaware Valley, New England and Texas might be much tougher to dispose of.
Having known Jim Donald for more than 30 years, I believe he’s taking one for the team by leading the board in a possible future new direction. This is truly a selfless act, especially knowing that Jim wanted to resign his board seat 18 months ago as he winds down his business affairs.
But this is how Donald rolls. In a world where HR executives, CFOs and general counsels are often strangely viewed as more relevant than operators and merchants, a man who once worked for Sam Walton understands the importance of motivation and humanity.
‘Round The Trade
While we’re on the subject of the Kroger-Albertsons soap opera, a few things have transpired over the past 30 days while we have continued to wait for rulings in the three now-concluded trials (the Washington state decision could come shortly after November 15). According to news site BoiseDev, both Aldi and Save Mart were reportedly interested in acquiring the more than 500 divested stores that are destined to be sold to wholesaler C&S should be merger go forward. That conclusion came from Roger Davidson (remember him? – the former Ahold, Walmart H-E-B and Supervalu executive) who was hired by the state of Colorado to examine the bidding process. In his testimony, Davidson inadvertently appeared to leak the name of Aldi (“a discount format with 2,200 stores that recently acquired another grocery retailer”) when describing an interested pursuer in potentially divested Kroger and Albertsons stores. Davidson also said that Shane Sampson (now CEO of Save Mart, formerly EVP and chief merchant at Albertsons) “has a great reputation in the industry” in describing another interested retailer in those overlapping stores. And then there’s the future of FTC chairwoman of Lina Khan as mentioned earlier.
Khan’s opposition to the merger has been unwavering and if the pending federal decision in Portland favors the FTC, Kroger and Albertsons face an uphill battle to gain victory on appeal. A negative decision would also continue to be costly (with legal fees alone now topping $1 billion) and distracting to each company’s core day-to-day business. In September, Khan gave an in-depth interview with the New York Times on the day that her initial three-year term expired. The 35-year-old Yale law school graduate acknowledged that, while others believe that she’s frequently overreaching beyond the scope of her job, she views her role as “restoring the role of robust, active antitrust enforcement in a legal and economic system that for too long has let those regulatory muscles atrophy to the detriment of consumers and healthier market competition.”
She added: “My role is not one of a policymaker saying thumbs up, thumbs down on a merger. We enforce the law. I get it. There are probably deal-makers out there who wish we didn’t have the antitrust laws.” And in a seemingly indirect reference to the ongoing Kroger-Albertsons merger battle with the large federal agency, Khan noted, “I also think it’s interesting that over the last couple of decades, there have been a set of case studies on mergers that were permitted to go through on the basis that there would be efficiencies passed on to consumers, or to other market participants. A lot of times, those efficiencies don’t actually materialize, and when they do, if you don’t have sufficient competition in the market, the companies are not going to have an incentive to pass those efficiencies on to everybody else. If you’re not enforcing antitrust, you’re allowing decades of consolidation that can create inflationary spikes more readily, because your system as a whole is less resilient to that disruption.”
A day before the election, the NYT ran another fairly lengthy story about Khan’s future as FTC chairwoman. With Trump’s election now confirmed, it’s certain the 3-2 commissioner edge that Democrats held will be reversed and Elon Musk, the world’s richest man and rabid Trump supporter, wrote in his platform “X” she “will be fired soon.” Soon may be longer than some expect, but her powerful role will most certainly end by dismissal or resignation. With a new commission alignment expected early next year, that alone would provide plenty of incentive for Kroger-Albertsons to appeal should they be denied in court.
Another FTC target is Amazon, whose growth seems unstoppable again after a few rocky quarters a couple of years ago. In its recently completed third quarter, “Godzilla” posted an 11 percent revenue increase to $158.9 billion and saw its net income skyrocket to $9.9 billion compared to $2.9 billion in Q3 last year. In his earnings call with financial analysts late last month, CEO Andy Jassy noted that the company’s recently completed “Prime Day” event (October 9) was the most successful in its history. And while Jassy said that his Seattle-based company remains focused on grocery, the results still seem underwhelming.
Maybe that will change now that Tony Hoggett, who headed Amazon’s worldwide grocery operations, has left to join Marc Lore’s ghost kitchen enterprise, Wonder. Hoggett joined Amazon three years ago from large UK food merchant Tesco and frankly did little to change the course of “Godzilla’s” mediocre effort to improve its grocery operations (excluding Whole Foods which was successful long before Hoggett arrived). Clearly, Hoggett’s a bright guy and maybe working under less restrictive conditions with a successful entrepreneur like Lore (who just acquired third-party restaurant delivery company Grubhub for $650 million) will allow him to flourish. Since Amazon has a weak bench (in grocery), it will be interesting to see who is named to revitalize its grocery operations, particularly on the brick-and-mortar side.
In this month’s continuing saga of the “drug chain” death watch, Walgreens has confirmed it will shutter 1,200 of its approximately 8,000 stores with about 500 units scheduled to close over the next 12 months. Meanwhile, on the balance sheet, Walgreens posted a Q4 net loss of $3 billion, compared to the $180 million in red ink it spilled in Q3 last year. Ouch!
UNFI, another company that knows a thing or two about red ink, has seen another DC about to become unionized. About 280 associates at the distributor’s Sarasota, FL warehouse have agreed to join Teamsters Local 79. The next step is negotiating a new contract. And just before presstime, we learned of a class-action lawsuit that has been filed against UNFI. According to the suit, was filed in Rhode Island, by vendor NYSM Organics LLC, alleges UNFI breached its contract when it systematically and intentionally took “prompt-payment” discounts which the supplier said it was not entitled to.
“Because of the magnitude of these deductions, what we have discovered is that certain suppliers, especially smaller ones, quickly find themselves in a situation where they owe UNFI more in deductions than UNFI owes them for products,” said Pat Huyett, from law firm Anapol Weiss, which is representing the organic chocolate manufacturer in this case. “We allege that UNFI is taking these prompt-payment discounts even when it is paying long after the time has passed to do so.”
In August, the company said it was revamping its procurement system, shifting from a national model to a regional one where individual DCs would have more control. The goal was to provide better internal execution and performance which would potentially lead to improved service levels and better outcomes for the vendors that it serves. Improved execution? There may be slightly more than a tad number of suppliers who wouldn’t agree. Despite what CEO Sandy Douglas keeps preaching about the company’s improvement, the Providence, RI-based firm is still not profitable. On a more intangible level, UNFI has lost the faith of some of its suppliers and the independent retailers it services, too. The results haven’t been good, and the optics are worse…Schnuck’s Markets, the dynamic St. Louis-based regional chain, has delisted the beleaguered brand Boar’s Head from its deli department and named Philadelphia-based Dietz & Watson as its primary deli meat and cheese supplier at all 115 of its stores in Missouri, Indiana, Illinois and Wisconsin. I believe that Schnuck’s is the first major retailer to remove Boar’s Head from its lineup, but I’d bet two ranches that list will grow quickly.
Local Notes
Bozzuto’s has acquired a 51 percent stake in Roche Bros., the upscale regional grocer whose 20 stores are all located in the Boston area. “This decision was made thoughtfully with our team, our customers, and our shared values as our guiding priorities,” co-owners Caitlin, Ed, and Rick Roche said in a statement. “After many wonderful years as a family-owned business, this partnership will allow us to reinforce our stability, ensure quality, and continue our positive impact in the community.” In a social media post, the Mansfield, MA-based company, which operates stores under the Roche Bros., Sudbury Farms and Brothers Marketplace banners, noted that there would be “no changes in day-to-day operations,” and the company will have the “same leadership and commitment to quality. Michael Bozzuto (CEO) shares our passion for serving the community and supporting our associates. We are grateful for this partnership, which we believe honors our legacy while bringing exciting opportunities for growth.” This is potentially a big win for both parties. Roche Bros., now in its third generation, will receive the necessary capital and firepower it needs to continue to thrive and Bozzuto’s will maintain control over one of its biggest and most important customers.
Costco had a strong sales month in October with revenue increasing 7.2 percent, a figure Costco said could have even been better if last month’s results hadn’t been negatively affected by a pull forward in sales from the abnormal consumer activity associated with the hurricanes and port strikes in September. In the U.S. comp store sales increased a healthy 4.1 percent.
Also posting strong sales and earnings results was Sprouts Farmers Market. The Phoenix, AZ-based “fresh” merchant saw its Q3 sales rise 14 percent to $1.9 billion and comp store revenue also grew 8.4 percent from the same period a year ago. Additionally, net income jumped to $301 million, a $92 million gain over last year. “We are driving robust traffic growth and continue to execute at a very high level. We remain confident in our long-term growth potential,” said Sprouts CEO Jack Sinclair, the Walmart alum who joined the retailer in 2019.
Weis Markets had a strong third quarter with solid gains in both comp store sales and earnings. For the period ended September 28, the Sunbury, PA-based regional chain saw comps increase to 3 percent (excluding fuel) and net income rise 11.3 percent to $25.8 million. “We continue to make progress in a post-inflationary environment affecting our year-over-year comparisons,” Weis Markets chairman, president, and CEO Jonathan Weis said in a statement. “Despite the challenge, we posted a solid comparable-store sales increase in the period and generated net income results that remain in line with our expectations. We attribute our results to our popular Weis Rewards loyalty market-more than 10,000 high-demand products which added 448 household essential items across eight non-food categories during the period, and disciplined store-level efficiencies that help us effectively balance customer experience and cost management. The hard work and commitment of our associates have been crucial to our progress.”
At rival Ahold Delhaize, its Q3 results were a bit softer in the U.S. Net sales were flat (negative 0.1 percent) and comps at its U.S. stores increased 1.2 percent (ex-fuel). The company said its biggest challenges during the period were the ramping-down of operations at 32 Stop & Shop stores (which recently began closing) and the recall of Boar’s Head products. Also impacting sales was the divestment of its FreshDirect online perishables business and lower gasoline sales. The best news for the Dutch retailer was that that Food Lion and Hannaford continued their winning streaks of consecutive positive comps for 48 and 13 quarters respectively.
All stores and some administrative services at AD’s U.S. divisions are still being impacted by a cybersecurity breach, which was uncovered on November 8. In a statement, parent firm Ahold Delhaize said that its security teams have launched an investigation with the help of outside experts. Law enforcement was also notified. In the release, the international retailer said that areas including pharmacies and some e-commerce operations were impacted and acknowledged that some systems were taken offline to help protect them.
More regionally, Stop & Shop earlier this month closed the last of the 32 underperforming stores it had designated for closure in July. That includes 10 stores in New Jersey, seven in New York, five in Connecticut, eight in Massachusetts and two in Rhode Island. Also closing by year’s end will be The Giant Company’s (TGC) Heirloom Market on Market Street in Philadelphia (inside the Strawbridge building). The last of the four Heirloom Markets that opened in Center City over the past five years, the 32,000 square foot Market Street location was seemingly doomed from the start when it opened in 2021 because of its questionable location in a once thriving area of the city that recently has seen the erosion of several businesses and the decline of foot traffic. The other three Heirloom locations on Bainbridge Street, in Northern Liberties and in University City continue to perform well.
As for TGC’s conventional supermarkets, the Carlisle, PA-based brand will cut the ribbon on its newest store December 13 on South Broad Street in Philly. The 40,000 square foot unit will be the last of three full-service urban supermarkets to open in Center City since 2026. Late next year or early in 2026, the big regional chain will open a 50,000 square foot store in the redeveloped Andorra Shopping Center in the Roxborough section of Philadelphia and will cut the ribbon on a new 50,000 square footer next year in Jenkintown, PA, less than three miles from the city line.
Good to hear that Rick Brindle, who spent much of his career with Nabisco/Kraft/Mondelez before retiring a couple of years ago, is back in the saddle again. Rick will be joining Wakefern as an advisor where he will work to build the company’s newest acquisition – specialty food distributor and purveyor Di Bruno Bros. He will work closely with Mike Day, Wakefern’s senior VP-business development for wholesale and member services, and with Emilio Mignucci, who joined Wakefern after spending his entire career working with the family-owned business which began in Philadelphia in 1939. If there’s one man who knows how to open doors at the country’s leading retailers and wholesalers, it has to be Rick Brindle.
Wakefern’s corporate-store division – Shop Rite Supermarkets – opened its newest unit in beautiful Mount Kisco, NY earlier this month. The 74,000 square foot Westchester County unit replaces an older ShopRite in nearby Bedford Hills. Also opening stores over the six weeks was Amazon Fresh which debuted new units in Langhorne, PA and Willow Grove, PA as well as two new stores on Long Island – one in Plainview, the other in East Setauket.
Some CEO departures of note include RJ Sheedy who abruptly “resigned” as chief executive at Grocery Outlet just prior to the release of the Emeryville, CA-based discounter’s less than stellar third quarter earnings performance. Chairman Eric Lindberg, who formerly held the chief executive’s job, gets to ride the same horse again. Stepping aside for a different reason was Rick Dreiling, top dog at Dollar Tree, the troubled Chesapeake, VA dollar store chain. Dreiling, who once spearheaded DT’s chief rial – Dollar General – and joined Dollar Tree in January 2023, has resigned due to “health challenges.” COO Michael Creedon, a former U.S. Auto Parts executive, now becomes CEO.
TGI Friday’s, Inc. has filed for Chapter 11 bankruptcy protection. The national restaurant chain said all 39 corporately-owned facilities will remain open. Unaffected are 56 other stores owned by franchisees. Earlier this year, the Dallas-based firm closed 36 underperforming units. Much like the situation with the “big three” drug chains, consumers can spot inferiority. And in my opinion, there is no worse player in the “fast casual” portal than Fridays.”
It’s with great sadness that I report the death of George Endrigian, 73, owner of the highly successful George’s Market in Dreshertown, PA. George was not only a great merchant but also one of the finest people I’ve known in my 51 years of writing about the grocery biz. He loved people, mentoring many in the business and in the community while also contributing to many charities. George was also one of the funniest dudes you could ever meet. Imprinted in my brain forever is George’s somewhat bawdy impression of Santa Claus at the old RMG holiday parties. Nobody was above ridicule, especially those with the biggest egos. True to his selfless manner, George was one of those rare people who made you feel better about yourself whenever you spent to time with him. You will be missed by many, my friend.
Another industry leader has left us. Al Plamann, former CEO of Commerce, CA-based wholesaler Unified Grocers (now owned by UNFI), passed away earlier this month at the age of 82. Plamann entered the grocery business in 1989 with Unified’s predecessor company, Certified Grocers of California, after 13 years with Atlantic-Richfield (ARCO). In 1993, he was named president and chief executive of Certified and was the catalyst in Unified’s merger with United Grocers of Portland, OR in 1999. He retired as CEO of Unified in 2013. During his career he was also vice chairman of the 12th District Economic Advisory Council of the Federal Reserve and a director of FMI, which presented him with its Herbert Hoover award for his humanitarian business achievements in 2017. “Al was a man of great integrity – he enjoyed and respected people. And he was the driving force in solidifying Unified when it was in financial trouble. A smart and nice person, I’m proud to say he was my friend for nearly 40 years,” said Dick Goodspeed, former CEO of Lucky Supermarkets and Von’s, who worked with Plamann for seven years when Goodspeed was Unified’s board chairman.
Our condolences also to Jonathan Weis, chairman, president and CEO of Weis Markets, on the recent death of his mom. Patricia Ross Weis was 94 when she passed. I vividly remember talking to her at several annual shareholders meetings in the past and always found her to be delightful and engaging. While the death of a parent is always difficult (no matter at what age), Jonathan should feel thankful that both Patricia and his late dad Bob (former CEO of the company) were not only were blessed with longevity, but also served as tremendous role models for Jonathan and his two sisters.
We have several more deaths to report from the entertainment world: Quincy Jones, one of the most influential forces in popular music for the past 60 years, has left us at the age of 91. A jazz trumpeter by trade, Jones’ career was highlighted by his deftness as an arranger, film score composer and producer of some of the most iconic acts of all time. Whether it was arranging, conducting or producing records for Frank Sinatra, Ray Charles and Michael Jackson – the album “Thriller” remains the best-selling album of all-time – composing film scores (“In the Heat of the Night,” “In Cold Blood,” “The Pawnbroker”) or organizing a global event which attracted 40 of the world’s most popular singers (We Are the World in 1985), Jones had his pulse on virtually every facet of the music industry. During his long career, Jones won 28 Grammy Awards (he was nominated an astounding 80 times) and was given honorary degrees by Harvard, Princeton and Julliard.
Another musician, who was also very influential (but in a much smaller circle), was Phil Lesh, bass player for The Grateful Dead. An original member of the band since its formation in 1964, Lesh died late last month at the age of 84. Lesh’s bass playing was also unique – he had the ability to play off of (lead guitarist) Jerry Garcia’s abstract riffs, often providing counterpoint rhythms that seemed like he was playing a solo within the same song. It’s not a style that would work for most bands, but for the Dead, it was perfect. Lesh also wrote or co-wrote several of the group’s biggest hits – “Trucking,” “St. Stephen,” “Cumberland Blues” and “Box of Rain” where his standout high tenor singing was masterful. Lesh was also somewhat of a medical marvel having survived a liver transplant as well as prostate and bladder cancer. As Phil once wrote: “And it’s just a box of rain, or a ribbon for your hair, such a long, long time to be gone, and a short time to be there.”.
One of the best (and most underrated) comedic actresses of our time has also passed on. Teri Garr, 79, a local girl from Southern California, enjoyed a successful career in Hollywood that spanned nearly 50 years and about 160 film and TV roles. Garr had a diverse career – she appeared in four Elvis Presley movies, two movies from the great director Robert Altman, and also in a much-underrated Francis Ford Coppola film, “The Conversation” (1974). Arguably her greatest role was in Mel Brooks’ “Young Frankenstein” (also 1974) in which she played dimwitted Inga, the German lab assistant who worked with and was hopelessly in love with mad scientist Dr. Frederick Frankenstein (“it’s pronounced Fronken-steen”), grandson of the original Dr. Frankenstein (played by the great Gene Wilder). Teri Garr had that special touch – a cross between a ditsy blonde and a sassy friend or wife. In 1982, she was nominated for an Academy Award for her performance in “Tootsie.”
