Grocery wholesaling remains the most challenging segment of the entire food matrix and, over the past 12 months, the wholesalers doing business in the Mid-Atlantic and Northeast markets found that significant progress was tough to come by. Year-over-year inflation was slightly down, and increased labor costs continued to be a hurdle in a significantly low earnings business where distributors have seen their inside margins diminish significantly over the past decade.
Remaining at the top of the leaderboard was member-owned Wakefern Food Corp., the largest wholesale grocery co-op in the country. The Keasbey, NJ-based co-op rang up a record $15.4 billion in wholesale volume (up from $15.1 billion last year) which was generated primarily through the success of its nearly 400 retail supermarkets operating under the ShopRite, Price Rite Marketplace, The Fresh Grocer, Dearborn Market, Fairway Market and Gourmet Garage banners. Wakefern’s market area covers New Jersey, New York, Connecticut, Pennsylvania, Delaware, Maryland, Massachusetts, New Hampshire and Rhode Island, and includes dominant positions in the large Metro New York and Delaware Valley markets.
During the past year, Wakefern acquired the Di Bruno Brothers name and plans to use that 85-year-old Philadelphia importer and specialty food distributor’s product line to enhance its members stores; it also plans to sell the DiBruno line of products to other non-affiliated retailers in markets outside Wakefern’s core trading area.
Internally, president Mike Stigers completed his first full year as president of the co-op and brought a new energy that has been praised by Wakefern’s associates, members and vendors. Additionally, company veteran Francisco Albert was promoted to VP-marketing.
C&S Wholesale Grocers, the nation’s largest privately-owned voluntary wholesaler, ranked second among all retail distributors in the Mid-Atlantic region with estimated annual sales of $12.2 billion. It was another active year for the Keene, NH-based distributor. C&S continued to make big news with its potential acquisition of 579 divested Kroger and Albertsons stores, which is still awaiting a ruling from three courts as to whether to $24.4 billion merger between those two chains will be allowed. On the executive front, Mike Papaleo, the well-respected industry veteran who served as C&S’ executive VP and chief procurement officer, retired. He first joined the large wholesaler in 1997.
Although the red ink diminished, UNFI continued to struggle. The Providence, RI-based distributor continued to post operating losses and saw several of its distribution centers become unionized. It also riffed several hundred administrative personnel in what it terms an effort to become more efficient. UNFI did open a new 1.3 million square foot distribution center in Newberry Township (York County), PA earlier this year. Estimated Mid-Atlantic/Northeast volume for 2024 was $10.5 billion.
Two of the largest national convenience store wholesalers – McLane and Core-Mark – once again 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 $3.19 billion; and Core-Mark, which became a division of Performance Food Group in 2021, supplied more than 3,000 c-stores and amassed estimated annual wholesale sales of $3.3 billion in the region.
Family-owned wholesale grocers, the genesis of virtually all grocery distribution, remained an important part of the landscape, despite continuing industry consolidation on a national basis.
Bozzuto’s, led by chairman and CEO Michael Bozzuto, continued its tradition of strong customer service and innovation. The Cheshire, CT-based wholesaler supplied 2,162 independent stores, many of which fly the IGA banner, and rang up wholesale sales of $2.7 billion in 2024. Earlier this year, the privately-held distributor promoted Steve Heggelke to executive VP-merchandising, advertising and procurement; Steve Capanna to VP-sales and Cheryl Gorman to VP-customer support. Recently, the wholesaler acquired 51 percent of Roche Bros., the upscale Boston-area independent which operates 20 stores. Bozzuto’s has been supplying. the family-owned retailer for many years.
Merchant Distributors, Inc. (MDI), another family-owned distributor, 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 $2.18 billion for the Hickory, NC-based firm, which in recent years has expanded its independent retailers bases deeper into the Mid-Atlantic. In the past two months, Michele Azar left as president of MDI to become senior VP and chief product officer clothing firm Gap Inc. Jason Ramsey, who had been heading Lowe’s, was named president.
Two metro New York based distributors – Krasdale (owned by the Krasne family since 1908) and General Trading (owned by the Abad family) – also showed positive growth during 2023.
Krasdale Foods, based in White Plains, NY (with a distribution center in the Bronx), 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 3,020 stores in the metro New York and Philadelphia markets and accrued estimated sales of $1.8 billion this year.
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 is estimated to be $692 million.
Of all the classes of trade, nobody performed better than the three large club operators, which performed well nationally and regionally. 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 Mid-Atlantic with 78 stores and an estimated $8.1 billion in annual sales (extrapolated to include only food and related products). Of note at Costco was the addition of Gary Millerchip, longtime chief financial officer at Kroger, who became CFO of the Issaquah, WA-based club merchant earlier this year.
Costco’s primary competitor in the Mid-Atlantic and Northeast, BJ’s Wholesale Club, also had another strong year. The Marlborough, MA club merchant operated the most wholesale clubs in the region – 106 – which produced annual estimated extrapolated sales of $5.2 billion. Last month, BJ’s promoted Scott Schmadeke to become the club chain’s new chief operations officer.
Second-ranked nationally club store retailer Sam’s Club’s 45 stores amassed $2.06 billion in estimated extrapolated volume this year. The Bentonville, AR-based Walmart subsidiary operated 46 club stores in the region, good for annual estimated extrapolated sales of $2.14 billion. Chris Nicholas, who was promoted to Sam’s CEO last year, continues to move the club retailer in a positive direction sales and earnings-wise.