The Friday Checkout is a weekly column providing more insight on the news, rounding up the announcements you may have missed and sharing what’s to come.
After decades serving the supermarket industry primarily in a supporting role, C&S Wholesale Grocers is getting ready to takecenter stage.
If approved by regulators, thenearly $2 billion deal C&S announced Friday to buy more than 400 grocery stores from Kroger and Albertsons would catapult the privately held company — known mainly as a grocery distributor — into a high-profile role as steward of some of the best-known supermarket banners in the U.S., including QFC, Carrs and Mariano’s.
C&S has yet to say whether it intends to continue operating the QFC, Carrs and Mariano’s stores it is set to acquire under those names, but it will have the right to do so, Kroger CFO Gary Millerchip said Friday during an earnings call.
However it decides to proceed, C&S would have a major presence in some of the nation’s top grocery markets if its planned transaction with Kroger and Albertsons goes through. In addition, the plan — designed to assuage antitrust concerns related to plans by Kroger and Albertsons to merge — would give C&S a license to use the Albertsons name in four states.
The proposed grocery store realignment adds up to an enormous upgrade in C&S’ position in the nation’s grocery industry. The New Hampshire-based company currently runs about 160 grocery stores, including franchise and corporate-owned Piggly Wiggly stores in the Midwest and Carolinas, plus nearly a dozen Grand Union stores in New York and Vermont that it acquired in 2011 in connection with the Tops-Price Chopper merger.
Founded more than a century ago as a supplier to independent grocers, C&S has long focused on its wholesale business. Despite setbacks in recent years, such as the loss of key customer Ahold Delhaize in 2019, C&S remains a force in the grocery distribution business, serving more than 7,500 independent supermarkets and other food retailers.
Millerchip indicated during the conference call that Kroger believes C&S is well-positioned to build its competitive position as a grocery retailer. “From our perspective, we got very comfortable with their financing strategy and feel they both have the financial strength to be able to complete the transaction, but also the financial strength to be able to keep investing in the business going forward as well,” said Millerchip.
Kroger and Albertsons have a distinct interest in ensuring that their store divestiture plan spawns a strong retail competitor with the muscle to keep operating over the long haul. Executives certainly recall Albertsons’ ill-fated sale of 160 stores back in 2015 to Haggen, a much smaller retailer, in connection with Albertsons’ merger with Safeway. Despite Haggen’s best intentions, the company was unable to handle the challenge of managing those stores, driving it to declare bankruptcy and sell the stores back to Albertsons.
In case you missed it
Aldi uncorks new private label wines
The discounter said it is taking U.S. shoppers on an around-the-world journey through wine with the Friday launch of 10 premium selections. Most of the new wines cost less than $10 and are part of the grocer’s Specially Selected Wine Collection, which aims to quench shoppers’ increasing thirst for premium items, per the press release. To complement the new wine offerings, Aldi is also offering new cheeses.
“With the holiday season approaching, these wines are the perfect complement to special occasions like Friendsgiving, holiday parties and birthdays, offering guests a global getaway from the comfort of home,” Aldi’s Director of National Buying Arlin Zajmi said in the announcement.
Instacart IPO filing kicks off a tech-spending spat
Instacart’s first in-depth financial filing spurred some unintended conflict in the tech industry.
Two cloud rivals have been taking swings at each other online in light of Instacart’s recent IPO filing, according to a CNBC report. That filing disclosedthe amount of money Instacart has spent each year with Snowflake, which helps businesses with cloud storage — a required disclosure since one of Instacart’s board members is the CEO of Snowflake.
When the spending figures appeared to show a projected 71% decrease in Instacart’sexpected 2023 payout to Snowflake, rival cloud company Databricks launched what turned into a social media spat. Snowflake’s CEO followed up with a blog post offering additional context and outlining a significantly smaller spending drop from Instacart.
Fareway opens eighth Meat Market
Fareway Stores has opened its latest Meat Market with a new 8,700-square-foot location in Kansas City, Missouri. The grocery chain broke ground on the store last summer.
The newly opened location in Kansas City marks the eighth Meat Market for the Midwest grocery store chain. Fareway debuted the Meat Market concept in 2016.
Last summer, Fareway held a ribbon cutting for a renovated 2,300-square-foot Fareway Meat Market in Luverne, Minnesota, and also opened a Meat Market in Olathe, Kansas.
Number of the week: 400
This is the new milestone number of Sprouts Farmers Market locations across the country, which became official after the specialty grocer held the grand opening of a new location in Haddon Township, New Jersey, on Friday. Sprouts has been on a mission this year to roll out at least 30 new locations under its new smaller store format.
What’s ahead
Inflation figures due
The U.S. Bureau of Labor Statistics’ latest Consumer Price Index data is set to be announced Wednesday. The figures will provide insight into whether the slowdown of inflation that started last fall continued into August.
Retail sales data released
Retail sales data for last month are scheduled to be released by the U.S. Census Bureau on Thursday, offering a look at how factors like inflation impacted sales for the grocery industry during August.
