Our first story will focus on the Mid-Atlantic grocery stalwart, Shoppers Food. It's something I have covered quite a bit since first getting into retail in 2014, in pertinence to its history and current events.
The last major update was in December 2019, when UNFI finalized its plans to sell thirteen Shoppers locations and close another four outright. This news followed almost two years of speculation, stemming from SuperValu's initial plans to exit their own retail brands. The time period in question had already shown dedication to the wholesaler's goal, with a string of other Shoppers closings and the sale of sister chains such as Farm Fresh, Hornbacher's and Shop n' Save.
Among the supermarket outfits who bought into SFW included Lidl, Compare Foods, and McKay's. Sales began within days; most stores on the list had wrapped by mid-January 2020, with some finishing only two weeks after the announcement. An additional two stores (Kensington, MD and Franconia, VA) were added later on, closing in tandem with the original 17 announced earlier in the month.
In the aftermath of this round, grocery industry analysts wondered what would be UNFI's next move. All that they had indicated was that SuperValu's holding company was still in the process of selecting buyers for the remaining 24 locations. This version of the story held true until the month of March. As COVID-19 cases began to pop up in the region as they were nationally, customers flocked to the stores to take in essential products in advance of lockdowns. Once the dust had settled, the sales numbers for the chain had grown higher than the usual. This would provide not only for better financial stability, but a greater return down the line.
This brings us to the actual story. In May 2020, the first reports of UNFI retaining the Shoppers brand appeared. Speaking in a BMO conference, UNFI CEO Steve Spinner declared his intent to delay the sale of their Shoppers and Cub chains as a result of the aforementioned sales increase. Both chains had previously been marked as having "discontinued operations" - a code which meant the two banners were in autopilot, no longer to expand on their brands as their individual locations were in talks for sale.
During this two-year period, Shoppers will continue to close and sell select branches as they had previously. There, however will remain some stores by the time the period will lapse. It is yet unknown if these final stores will continue (whether under the Shoppers name or not), or close down simply. Regular maintenance, and probable remodels are also to continue for the rest of these stores.
Will Shoppers survive as a brand or not? What locations do you believe will be sold in the meantime, and to whom? Let me know if you wish.
Sources
- https://www.washingtonpost.com/local/maryland-news/shoppers-food-is-leaving-13-locations-heres-what-is-happening-next/2019/12/17/d5ccbd5c-2041-11ea-bed5-880264cc91a9_story.html
- https://www.grocerydive.com/news/unfi-delays-sale-of-shoppers-and-cub-foods-stores/578048/
- https://www.supermarketnews.com/retail-financial/cub-foods-shoppers-stores-be-spun-unfi
- https://www.bizjournals.com/washington/news/2020/06/11/shoppers-stores-will-stay-open-for-up-to-two-years.html
The "discontinued operations" bit is actually very interesting to me. What that's saying is that the operations from Shoppers had been moved into a different portion of the parent company's income statement, pending the outcome that the chain was to be, well, discontinued. Presumably, the related assets and liabilities were reclassed on the balance sheet, too. Now that that course has been reversed -- even if it's only temporary -- it sounds like the "normal" accounting treatment has been reinstated as well. I'd be very interested to know what effect that has had on their F/S, and just how many things they had begun to reclassify that they've now had to roll back on.
ReplyDeleteThe Lorton, VA store is closing despite the sale of Shoppers being delayed. Any reason as to why it might be closing?
ReplyDeleteThe articles above, as well as my post, did mention that Shoppers was to continue unloading stores to individual buyers before the chain is bought out/closed entirely. At this moment I am unaware of such a buyer, or even if it might have been another issue (lease expiring).
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