At The Giant Company’s (TGC) vendor summit, held earlier this month at the company’s corporate headquarters in Carlisle, PA, the importance of partnerships and “winning together” highlighted the five-hour event which attracted nearly 500 suppliers, distributors and food brokers.
TGC president John Ruane kicked off the meeting with a video celebrating The Giant Company’s 102-year legacy of delivering value and freshness – stating, “it’s in our DNA.”
As times change and customers have more choices than ever, he underscored the need to continue evolving to meet customer expectations, especially around value and pricing.
Ruane, who began his career at a Foodtown store in Caldwell, NJ at the age of 14 and has been president of TGC since 2022, shared the company’s bold ambition to be a brand everyone is proud to talk about. Noting that “In a highly competitive retail landscape, this requires a clear path and aligned strategy. Success depends on all of us. Every function plays a role, from merchandising to marketing.”
He told the crowded room about TGC’s commitment to support its mission and vision for sustainable growth and asked for continued partnership – “because winning together is the Giant way.”
One of TGC’s most valuable associates is Rebecca Lupfer, who has worked in many senior level roles over the past 20 years for the regional chain – finance, store operations and merchandising. Last year, she was named chief merchant of the company and is well-respected by her peers and by the vendors. In reiterating the significance of working with the company’s partners and creating an accessible communications pipeline, Lupfer urged the vendors to bring ideas that will help grow categories and solidify relationships. “We can only win together,” she asserted.
Circana exec Howard Sherr, VP-client solutions at the consumer insights firm (formerly IRI and NPD), noted that a deeper dive into the seemingly rosy economic data indicates that consumers are hurting and are therefore changing their buying patterns. He stated that hard-pressed shoppers are increasing their store visits, but are cherry-picking more, and spending less. He also recognized that the mass and discount channels are growing share against the traditional supermarket channel.
A highlight at many of TGC’s vendor meetings over the past 20 years is its team merchandising approach to discussing issues relevant to their categories. This year, executives Brian Lorenz, VP-fresh; Steve Allison, VP-center store; Darla Rieg, director of commercial planning; Steve Kruger, director of price and profitability; Chris Keetch, director of produce and floral; Deb Kreider, director of meat and seafood; Rob Palmeri, director of deli and bakery; Ted Williams, omnichannel merchant and leader; Katie Cunningham, director of category management; Kyle Kirkpatrick, director of center store; and Bryan Beck, director of field merchandising addressed the audience to deliver their perspectives and area of future focus within their areas of responsibility.
During the lunchtime sessions, John MacDonald, VP and chief marketing officer for the Ahold Delhaize USA brand (and one of the sharpest minds in the business), noted that partnerships go beyond the company’s relationship with its vendors, but also extend to consumers where earning and maintaining trust were key components toward continued success. MacDonald also talked about branding, the growth of social media, and its hidden positive marketing benefits underscoring TGC’s growing presence in that space. In assessing the company’s priorities, the industry veteran stated that delivering on value, freshness, and “winning the center of the plate” was very important as was maintaining TGC’s program of being “famous for produce.”
The afternoon session also featured a panel discussion led by Kruger and included TGC category managers Jen Rush and Jim Brinser and vendors Ray Nemeth of Campbell’s and Todd Kostick of Clemens Food Group. The lively panel discussion focused on the benefits of collaboration and open communications between retailers and their vendor partners.
All told, an informative and productive day!
In Rebuilding Save A Lot, Mayo’s Got A Boatload Of Challenges
I’m happy for Bill Mayo, who earlier this month was named CEO of Save A Lot stores to replace the re-retiring Fred Boehler. Bill’s a talented, hard-working and highly intelligent executive who has waited a long time to get his shot at running a retail organization.
In his nearly 30 years at Wakefern, where he rose to the senior position of chief administrative officer, Mayo knew only success – and he was an important part of a stellar lineup particularly under the regimes of Dean Janeway and Joe Sheridan.
Since joining the St. Ann, MO-based discounter 18 months ago as chief development officer, Mayo has experienced a much different perspective.
In essence, he left a team that resembled the 1998 New York Yankees to join one that could be compared to the New York Mets – something close to their 1962 version.
Of course, what Mayo will inherit has almost nothing to do with his skill level – he’s taking the helm of one of the perennially worst retailers currently operating in the U.S.
Sure, there was a time when SAL was viewed as the best-in-class discount grocery chain in the country, but that was two decades ago. Led by founder Bill Moran, the company was sold to Supervalu in 1992, but Moran and his team were allowed to operate somewhat autonomously from the parent firm. Moran also helped develop other future Save A lot leaders like Bill Shaner and Tom Lenkevich before then-beleaguered Supervalu sold to Canadian private-equity firm Onex Corp. in 2016. And then the floodgates opened.
Even more than some PE companies, Onex was totally clueless on how to run a national discount grocery chain that was comprised of nearly 1,400 stores, owned both corporately and by independent licensees.
Onex quickly dumped former A&P chief executive Eric Claus and replaced him with Kenneth McGrath, the first U.S. president of Lidl who at the time had been selling mobile phones in the Caribbean. McGrath lasted about four years before he defected back to rival Lidl.
During McGrath’s tenure, Onex sold its interest in Save A lot to a new group of investors and decided that it wanted to become a pure wholesaler, selling off more than 300 formerly corporately-owned stores to more than 30 independent retail groups (some new licensees, some existing SAL owners).
After McGrath’s surprising resignation, Save A Lot chose ex-Supervalu chief executive Craig Herkert (is there a level beyond inept?) as its interim leader, before settling on former Supervalu and C&S Wholesale executive Leon Bergmann as its new CEO in early 2022.
Bergmann was the right choice, but by then SAL was in such a state of disarray that it seemed that bankruptcy might have been the most viable option to restart the company’s broken engine.
Chapter 11 never occurred, and Bergmann left in late 2023 to be replaced by board member Fred Boehler, who had been retired from any active day-to-day business responsibilities since leaving Americold in 2015.
Boehler accomplished little in his 22-month tenure as SAL’s top dog; now Mayo gets his shot.
A major part of the company’s problems stems from the performance of many of its new licensees. They have made SAL’s transition from retail to wholesale extremely difficult. That move prompted the company to add more than a dozen new licensees to its member base and first-time players such as Sunshine Stores, Jane’s, Fresh Encounter and Yellow Banana performed so poorly that those collective 130 stores were taken back by the parent company and now operate again as corporately-owned Save A Lots. Even some units purchased in 2020 by existing licensees are struggling.
Established and successful licensees are frustrated by the company’s lack of management focus, its (at times) non-competitive wholesale pricing system and the financial constraints placed on management by SAL’s investors.
“The core model can still be effective if executed properly,” said one Save A Lot independent owner. “But at times, and increasingly so, management can’t get out of its own way. Their internal distractions, caused in part by their attention to these failed stores, adversely impacts their ability to provide what we as long-standing successful operators need, especially in the hyper-competitive retail food landscape that currently exists in all markets. I’m hoping Bill can clean up some of these long-term internal problems and help get us back on track.”
I hope so, too.
‘Round The Trade
Could Kroger be changing its thoughts on continuing its relationship with Ocado, the creator of automated fulfillment centers? According to interim CEO Ron Sargent, who said his company is reviewing its current sites, and a report from Reuters, that’s a possibility. Currently, Kroger operates eight facilities (two more are planned for next year) and multiple trade analysts have told us that the Ocado “sheds” are not yet profitable. The partnership between the Cincinnati-based supermarket chain and the British-owned firm began in 2018 and Kroger originally said as many as 20 fulfillment centers could be built. One of the champions and driving forces behind the Ocado partnership was ex-chief executive Rodney McMullen, who was forced out last March. With economic conditions tightening nationally coupled with major internal changes at the nation’s largest pure-play supermarket chain (including a new chief executive), further major investment into unprofitable entities might indeed be tabled. More anecdotally, I’ve visited the Kroger (Harris Teeter) “shed” in Frederick, MD numerous times since it opened in early 2023 and I have yet to see a lot of truck delivery traffic emanate from that 350,000 square foot facility. It makes you wonder if Kroger was too ambitious in its effort to try to match Amazon and Walmart’s internal digital fulfillment network.
Happy 30th birthday to Costco’s Kirkland Signature private label brand. What began in 1995 with the debut of Kirkland products in two categories – shampoo and vitamins – has exploded into hundreds of SKUs which now comprise about 33 percent of the club store operator’s sales. Costco and the Kirkland brand have earned their success – their suppliers will tell you nobody vets quality assurance more intensively than Costco and consumer surveys consistently rate the Kirkland brand (named for the site of Costco’s original headquarters in Washington State) tops among all private label brands from all retailers.
While there was much hype about Amazon’s July “Prime Day” sales success, according to Reuters, one area that fell short was the number of new Prime sign-ups from the event, which this year was doubled in length to four days. Reuters said that Amazon registered 5.4 million new sign-ups for the 25-day period (the 21 day run up and the four days of the event), which was 116,000 fewer than in 2024, and 106,000 below Amazon’s internal target…the August inflation numbers are in and, with an increase of 2.9 percent, they represent the highest increase this year. And those numbers reflect only a small part of the price increases created by tariffs. With the labor market tightening and economic concerns mounting, there’s not much optimism about upcoming Q4, the busiest and most important period of the year for most merchants whose prices will certainly be increasing.
A tip of the hat to my buddy Jim Donald, who announced his retirement as chairman of Albertsons. Jim’s had a spectacular career both in the grocery industry – Walmart, Albertsons, Safeway, (before Albertsons acquired it in 2015), Pathmark and Haggen – and outside of it – Starbucks and Extended Stay. I know he wanted to leave his role on Albertsons’ board earlier, but elected to stay during the Kroger-Albertsons merger process to avoid any perception of disruption. Kim Fennebresque, a current board member since 2015, becomes Albertson’s new chairman and David Zinsner, CFO at Intel, joins the board as an independent director. I’m delighted that Jim, perhaps the most energetic person in the history of the grocery biz, will now get to do what he wants to do on his terms.
Local Notes
Boyer’s Food Markets, the 18-store independent based in Orwigsburg, PA, is switching wholesalers. Beginning next month, the privately-owned merchant will be utilizing Wakefern as its primary supplier after many years with UNFI and predecessor – wholesaler Supervalu. Additionally, Anthony Gigliotti, one of the owners of Boyer’s and the man who supervised sales and marketing, will be leaving the company early next month after 22 years. The move is voluntary, and I was especially touched by Anthony’s heartfelt letter to the trade in which he expressed his thanks and gratitude to the many people who have shaped his 37-year industry career. Anthony, you’re a class act all the way and we wish you continued success in all future endeavors. From a business perspective, the Boyer’s addition is a feather in Wakefern’s cap, especially its contract wholesale division which has struggled for decades. However, when Mike Stigers (a wholesaler at heart) took the helm in 2024, he made growing that non-ShopRite unit a priority. For UNFI, it’s another gut punch. Since June, the Providence-based wholesaler/retailer has lost the Key Food account and last month announced it will close four underperforming Shoppers Food stores in the Baltimore-Washington market. That brings Shoppers down to 17 operating stores (from 55 supermarkets a decade ago). Additionally, the recent news that Schnuck’s is acquiring Skogen’s/Hometown Grocers’ 51 stores is potentially adversely impactful for UNFI if Schnuck’s decides to supply those stores directly (UNFI currently supplies Skogen’s/Hometown Grocers).
Trader Joe’s will build a new 921,000 square foot distribution center on Long Island. The facility, housed on 66 acres, will be based in Islandia (Suffolk County) and is expected to create 800 jobs. The new depot is expected to serve at least 30 TJ’s stores located on Long Island, New York City and New Jersey. The company’s next closest DC is in Bath, PA.
New store openings this month include a Grocery Outlet in Medford, NJ and ShopRite’s fourth supermarket in Staten Island. The 62,000 square foot unit is located in the Great Kills area and like the other three ShopRites on SI, it is owned by the Mannix family. More ShopRite news: the McMenamin family has acquired the SR located in Hatfield, PA from the Miller family. This will be the McMenamins’ third ShopRite store (the other two are located in Philadelphia). The Miller family (KTM Supermarkets) will continue to own and operate the ShopRite located in West Chester, PA.
A tip of the hat to Jim McCaffrey III who was recently presented with the “Paul Harris Fellow Award” by the Rotary Club of Newtown, PA, an honor given to individuals for their exemplary work in community service. McCaffrey’s Markets has donated every year to the Rotary Club’s “Hope on the Vine” fundraising gala which allows the group to hold bi-annual food drives in front of McCaffrey’s Newtown store. “As a small independent business, we are always happy to support people who do good in the communities we serve,” said Jim. “Contributing to the Newtown Rotary Club, who in turn, partners with the Newtown Fire Rescue, is a no-brainer for us. We are all in the business of helping our neighbors.” Another class act from one of the classiest people in the grocery business.
From our obituary desk, I was extremely saddened by the death of Dave Andrews, 66, one of the most popular vendors in the Mid-Atlantic supplier community. For the past 15 years Dave served as VP-sales and marketing for Kreider Farms and was instrumental in the egg and dairy producer’s explosive growth. Dave was a man of high intelligence who possessed a tireless work ethic and an ability to make people look on the positive side of things. He had many interests beyond the food business, and I’ll remember him for his infectious smile and great sense of humor.
Robert Redford has also passed away at the age of 89. One of America’s most popular actors, Redford starred in some of biggest box-office films during a 15-year period – “Butch Cassidy and the Sundance Kid” (1969); “ The Sting” (1973); “The Way We Were” (1973); “All The President’s Men” (1976); “The Natural” (1984); and “Out of Africa” (1985). Redford also won an Academy Award for his first directorial effort – “Ordinary People” (1980) and, all told, appeared in 82 TV shows and films in an acting career that spanned 65 years. Additionally, he was the founder of the Sundance Film Festival and was an avid environmentalist who won the Natural Resources Defense Council Forces for Nature Award in 2004. Apart from “Butch Cassidy,” my favorite Redford film was his role as CIA researcher “Turner” in the spy thriller “Three Days of the Condor” (1975).
Jeff Metzger is publisher emeritus of Food World and Food Trade News and founder of Taking Stock LLC, a grocery industry advisory and consulting firm.
