It’s difficult to follow someone like Jeff Metzger – an industry expert, a certified character, and, I’d like to think, a friend. For decades, Jeff has been chronicling this industry, explaining not just what happened, but why it mattered. That’s not something you replace overnight. In truth, it’s probably not something you can replace at all. Jeff, you’re an impossibly hard act to follow. We simply hope to carry the conversation forward in your stead…
The biggest regional story, of course, is Kroger’s proposed acquisition of Giant Eagle. The company has quietly been on the market for years, and once Laura Shapira Karet stepped down in 2023, it became increasingly clear that the family was preparing for its next chapter.
The purchase includes $1.2 billion in cash and the assumption of nearly $400 million in liabilities. For roughly $1.6 billion, Kroger acquires 197 supermarkets and 11 stand-alone pharmacies across five states representing approximately $9 billion in annual sales. In today’s grocery landscape, that valuation looks like a bargain – until you start adding up the renovation bills.
Giant Eagle may be one of the clearest examples of what happens when a retailer underinvests in its stores. Years of deferred capital spending left the company struggling not only against Walmart and hard discounters, but also against its own aging fleet.
It reminds me of Sandra Bullock’s line in “Speed” after Keanu Reeves accidentally punctures the fuel tank: “What, you thought you needed another challenge?” Kroger CEO Greg Foran already had his hands full. Then again, what’s another 200 stores to modernize when you’re already working through nearly 2,800?
Unlike the debt-heavy Albertsons proposal, Kroger can comfortably fund the Giant Eagle acquisition with its more than $2.8 billion in cash and temporary investments. That’s welcome flexibility at a time when mounting operating costs and softer consumer spending continue to pressure earnings at the nation’s largest traditional supermarket operator.
There will most certainly be regulatory hurdles. Kroger will likely be forced to divest some of its Ohio locations like Columbus – where the combined market share approaches 43 percent. I wouldn’t expect the Trump administration to provide much obstruction as they sort out planes and pool coatings… but anything is possible there.
Outside of a handful of overlapping markets, however, the portfolios complement each other surprisingly well, making this a much cleaner transaction than the potential merger with Albertsons ever was. Barring objections, the deal is expected to close in 2027.
The proposed buyout of Giant Eagle definitely changes the regional math, as the Keystone State now looks like one of the most contested grocery markets in the country. Kroger has effectively acknowledged that future growth comes through geography rather than simply squeezing more sales out of existing markets.
Consumers may see another merger, but retailers should see a renewed competitive race for scale. The best locations have already been built, and in the mature, over-stored Northeast, there are very few premier sites left to develop. That’s why established store networks have become so valuable. The real estate executives at Giant Food understood this decades ago; today’s secondary location often becomes tomorrow’s prime location as demographics shift. Today, buying geography is increasingly easier – and sometimes cheaper – than building it.
That also makes you wonder who’s next. Outside of Kroger and a handful of well-capitalized retailers, few companies have the balance sheet to go on an acquisition spree. I’d still keep an eye on Amazon. If the company decides it wants a meaningful grocery footprint in the Northeast, buying an established regional chain may ultimately prove faster than building one store at a time.
For me, though, the real prize for Kroger isn’t the stores – it’s the data. Every acquisition expands Kroger’s Retail Media Network (RMN), adding millions of shoppers with billions of data points on purchasing behavior. Scale matters in retail media. National advertisers increasingly want fewer partners with larger audiences. In the long run, Kroger may earn more from advertising to their customers than from selling them groceries. That could be a real win for Foran.
One question I can’t shake: where was Ahold Delhaize? They’ve had multiple opportunities over the years to acquire another regional stalwart, yet their European leadership never seemed convinced the economics justified the investment. Did the appointment of Claire Peters as the new ADUSA CEO accelerate Kroger’s move before Ahold could revisit the opportunity? We may never know, but it’s difficult not to wonder.
If the Kroger deal falls through, I’d be hard pressed to come up with an excuse why ADUSA shouldn’t be the partner of Giant Eagle…
By all accounts, Claire Peters is exceptionally well-qualified to lead ADUSA. The U.S. business is operationally strong and continues to outpace Ahold Delhaize’s European operations in both growth and opportunity. The bigger question isn’t whether Peters can lead – it’s whether the board will allow her to. Her predecessor, JJ Fleeman, was seemingly constrained by decision-making that ultimately rested in Europe.
If Peters is given the latitude to operate as a true chief executive rather than simply the head of a regional division, Ahold Delhaize may finally be positioned to play something other than defense.
Lidl already learned the hard way that the European playbook doesn’t always translate to the American grocery business. Meanwhile, Aldi has largely ignored convention and written its own rules – with remarkable success. With Kroger now expanding deeper into the Mid-Atlantic and the Northeast, this feels like the moment for Ahold Delhaize to rethink not just its strategy, but also where decisions are made.
Of course, Kroger is still cleaning up the Albertsons merger. Albertsons continues to pursue its $600 million breakup fee along with additional damages, arguing Kroger failed to use every available avenue to close the deal. Eventually, this probably ends the way most corporate divorces do – with one of the parties writing a very large check. Until then, we’ll all have to endure the public he-said, she-said.
The ripple effects of former Kroger CEO Rodney McMullen’s failed Ocado distribution center strategy continue to be felt. After years of disappointing returns, warehouse closures and a scaled-back U.S. rollout, Ocado founder and CEO Tim Steiner has agreed to step aside following a boardroom succession battle. While McMullen is long gone from Kroger, his mess is still being cleaned up.
Ahead of Wakefern’s Local Produce Supplier Summit – happening as this issue was going to press – the retailer-owned cooperative announced that it intends to invest $500 million over five years in Northeast fresh produce. That’s great news for local and regional farmers and growers.
Moreso, it’s another signal that supply chain resiliency and local differentiation are becoming strategic priorities, not just marketing slogans. “Buy Local” isn’t just a bumper sticker – consumers want to support local brands and local producers. There’s a competitive advantage for retailers that can deliver on this mission.
Around the Trade
Here’s another reminder that AI isn’t exempt from antitrust law. Albertsons, Sam’s Club, Walmart, et al have been sued by consumers in the U.S. District Court in California for using an AI-powered fuel pricing algorithm to increase gas prices.
The Kalibrate company at the center of this lawsuit, tracks retail petroleum prices with an extensive database of current and historical petroleum retail prices, wholesale prices, refineries, and even taxation histories amongst a host of other metrics. The companies collectively used Kalibrate’s software to recommend optimal price points and automatically push changes to pumps.
Businesses are prohibited from using shared pricing algorithms to coordinate prices with competitors under Bill AB 325. Plaintiffs also include 7-Eleven, Circle K, Marathon Petroleum, BP, Cumberland Farms, and almost a dozen additional fuel retail companies in California.
This is going to get messy as it opens up a host of ancillary questions like: At what point does sharing pricing information online become coordination? Add this to the list of other AI-complicated questions that your compliance departments will need to ask about.
We all remember the fallout from Instacart’s pricing ‘tests’ earlier this year that have spurred multiple states to take up laws preventing these ‘shenanigans’. Legislatures continue to target electronic shelf labels (ESLs), often conflating the technology with dynamic or “surge” pricing.
Legislatures continue to blur the line between electronic shelf labels and dynamic pricing nationally and in our region. New Jersey and Rhode Island have advanced legislation restricting the use of ESLs amid concerns over algorithmic or surge pricing, while Connecticut recently enacted a law prohibiting retailers from using personalized or dynamic pricing on food and other essential consumer goods. The growing patchwork of state regulations signals that retailers adopting digital pricing technologies will need to pay as much attention to compliance as they do to implementation.
Speaking of execution. We hope the Mamdani administration learns quickly that its government-owned grocery plan might be a bridge too far. It’s been reported that in a meeting between New York City Deputy Mayor Julie Su and bodega representatives, the store owners were asked ‘What items are sold the most at your stores?’ and ‘Where is your profit margin the greatest?’ It reminds me of an old “Saturday Night Live” comedy skit about a press conference during the first Gulf War where an Iraqi reporter asked “Where are your troops, and may we count them?”
To be fair, the administration was reportedly trying to avoid undercutting the very bodegas it claims it wants to protect. But asking independent retailers which products generate their highest margins is an astonishing way to begin building trust.
The other unanswered question is who supplies these stores. Wholesale distribution isn’t something government agencies simply invent overnight. Finding manufacturers and distributors willing to participate may prove considerably harder than drawing campaign promises on a whiteboard. We’ve heard whispers that wholesalers are being told that they better not be supplying these locations if they want to keep their existing business.
We love the idea of solving hard problems like affordability, but in this case it seems there was probably a better way of helping average people than the government getting into the grocery business. Jeff often liked to say that a “horribly flawed plan was doomed to fail.” I’m not ready to go that far. But, I do think this one begins with several flawed assumptions. Time will tell.
Retailers should also keep an eye on the evolving SNAP landscape. Consumer participation is already beginning to decline, reducing grocery spending in many communities. Unfortunately, the ‘good news’ keeps on coming. Beginning this fall, states will assume 75% of SNAP administrative costs, and those with higher payment error rates could be required to cover up to 15% of benefit costs starting in 2027. Those changes create a powerful incentive for states to further tighten enrollment, putting additional pressure on retailers that rely on SNAP sales.
Quietly, UNFI appears to be making meaningful progress. For the better part of the last several years, the company’s story has been one of restructurings, cost-cutting, and repairing operational missteps.
UNFI also announced a significant leadership realignment designed to further harmonize its commercial and operational functions. Matteo Tarditi was promoted from CFO to President and Chief Operating Officer, assuming responsibility for sales, customer relationships, supply chain operations, technology and continuous improvement. Alfredo Luchini succeeds him as CFO, while Chief Commercial Officer Louis Martin will focus on supplier partnerships, merchandising and value-added services.
It’s a notable change in tone for a company Jeff spent years writing about for all the wrong reasons. Sandy Douglas seems to have helped UNFI finally find its footing. Perhaps these moves will reinforce a strategy centered on better execution rather than simply another round of organizational change and triage.
For independent retailers, that’s welcome news. A stronger, more disciplined UNFI doesn’t just benefit shareholders – it benefits thousands of grocers who depend on the company every week to keep their shelves stocked… and who can’t afford to switch providers. After several years of turbulence, it finally feels like UNFI is beginning to play offense again.
Despite a hard-fought loss to Belgium in the knockout round, the U.S. Men’s National Team gave fans plenty to be proud of. Just as importantly, the tournament showcased America to millions of international visitors, replacing perceptions with firsthand experience. Early reports indicate watch parties and celebrations generated a welcome boost for retailers, and we hope the momentum carries forward. If soccer continues its rise in the U.S., grocers may have another recurring promotional season to add alongside football, Thanksgiving, and the holidays.
Few executives have left a bigger imprint on convenience retailing than Richard “Dick” Wood Jr. Over five decades, he helped transform Wawa from a regional dairy company into one of America’s most admired convenience brands. The industry lost one of its quiet architects.
Circling back to Jeff, In the short time we’ve worked together, he has been an incredibly generous mentor, always willing to share his knowledge. And for reasons I still don’t fully understand, he’s managed to hold onto much better hair than I have. It’s magnificent, and I’m envious.
As Jeff begins his next chapter, we’ve decided to give our column Taking Stock a well-deserved rest. Out of respect for Jeff and the remarkable legacy he built over so many years, it feels right to pause the title rather than simply hand it to someone else.
In its place, this space will become The Long View.
Our goal and format is much the same: to look beyond the headlines and to consider what the news around the trade means – not just today, but for the months and years ahead. We want to connect the dots, identify the broader trends shaping our industry, and provide context that helps readers make sense of a rapidly changing marketplace.
I don’t pretend to have my predecessor’s mastery of the grocery business. What I can promise is that we’ll approach this space with curiosity, humility, and commitment. We’ll speak confidently about what we know, be honest about what we don’t, and continue learning from the people whose experience built this industry.
The Long View is a bit aspirational, I think that’s exactly as it should be. I’m always happy to report about good people doing good things to help the industry.
Thank you Jeff for your decades of service to this industry, to its people, and to the readers who looked forward to your perspective each month. Your knowledge, generosity, and steady voice have left an imprint that can’t be measured by column inches alone.
I’m sure there’s a good-natured joke in here somewhere about them breaking the mold after/while they made Jeff, but I’ll leave that roasting to some of his long-time friends and colleagues… Perhaps in another edition.
Again– Jeff, you’re an impossibly hard act to follow. We can only hope to carry the conversation forward. Thanks.