Taking Stock

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‘Round The Trade

Albertsons also made another financial move in order to strengthen its cash position. It was revealed in an SEC filing on September 25, the Boise, ID-based chain has entered into an agreement to sell and lease back 71 of its stores to a Delaware-based limited-liability corporation in a transaction intended to raise up to $720 million. C.F. Albert LLC will purchase the properties and lease each one back for an initial term of 20 years, with Albertsons reserving eight options for five-year lease renewals, according to a filing by Albertsons with the U.S. Securities and Exchange Commission. The company expects the sale-leaseback of the properties, subject to customary closing conditions, will close by December 2. The filing also notes that 15 individual Albertsons entities were listed as sellers including stores from most of its banners – Acme, Jewel, Randall’s, Safeway and Vons. However, the filing does not include a list of the specific properties involved in the sale leaseback agreement…the “Mary Poppins” award of the month goes to UNFI CEO Steve Spinner, who recently told financial analysts he really feels “excited about the opportunities I believe this combination (with Amazon) brings to UNFI,” While it’s true there’s comfort knowing that UNFI’s contract with WFM won’t expire until 2025 (and it’s unlikely that Spinner will be around that long), but betting on future “opportunities” with arguably the savviest and one of the largest distribution companies in the world (which also prides itself on its ability to execute its low-cost model), isn’t a bet I’d make…Wal-Mart said it will consolidate its U.S. business from six divisions to four with each unit to be managed by a senior VP. It will also reduce the number of U.S. regions from 44 to 36. Moreover, the “Behemoth” announced it will construct a brand new headquarters building in Bentonville, AR. The new facility will consolidate more than 20 buildings that have been added to Wal-Mart’s original home office since it was originally built in 1971. The new facility will be located on a 750-acre tract in Bentonville and, according to CEO Doug McMillon, will “provide a central campus with accommodations for a more digitally native workforce and space that encourages greater collaboration and speed. You’ll see improved parking, meal services, fitness and natural light. Plus, the campus will be integrated into the community trail system for easy walking and cycling access. The combined changes will help us get the most out of our existing team, while helping us attract high quality talent in the future.” The project is expected to take five to seven years to complete. And while the Behemoth doesn’t yet operate stores in New York City, it looks like it will attempt to enter the nation’s largest market via the online delivery mode. The world’s largest retailer acquired Parcel, a NYC-“customer-centric delivery company” earlier this month, and according to a Wal-Mart online posting it plans to “leverage Parcel for last-mile delivery to customers in New York City – including same day delivery – with general merchandise as well as fresh and frozen groceries from Wal-Mart and Jet.” One of Parcel’s existing customers is Bonobos, an online women’s clothing company, which Wal-Mart acquired in June…from the “new retailer CEO” department comes word that Larry Appel has been named CEO of The Fresh Market (succeeding interim chief executive Brian Nicholson who returns to his former post as CFO). Nicholson originally replaced former CEO Rick Anicetti. Appel, who spent a decade at Winn-Dixie and another stint at Home Depot, said he is committed to “re-energizing all that sets The Fresh Market apart as a great brand and retail store.” A lawyer by trade, Appel might have to become a combination of Perry Mason and Alan Dershowitz to fix the myriad of problems at the struggling 176-store Greensboro, NC-based merchant…in news from adjacent markets, it shouldn’t surprise anyone that soft drink purchases outside the city of Philadelphia increased 38 percent, according to a new survey from Catalina that measured the effects of Philadelphia’s 1.5 cents per ounce soda tax during the first six months of the law’s passage on January 1, 2017. That may seem like the ultimate “glass half full” spin on what many consider the worst piece of legislation to ever affect the food industry in the Keystone State. The real story here is that soda purchases are down by 55 percent within the city limits. Additionally, the city only raised $39.3 million in the first 180 days of the law’s implementation (well below its $46.2 million projection). And, as for most of that tax revenue going towards improving early school educational programs, it’s anybody’s guess what those financial contributions will really be or where they might ultimately end up…and from the five boroughs of New York City, national trade associations such as FMI and NACS, along with other grocery and restaurant operators, have settled a suit against the City that was filed after the Big Apple sought to enforce federal menu-labeling guidelines before the FDA’s new timeline which had been pushed back until May 2018. Under ultra-liberal Mayor Bill de Blasio, the city began fining and sanctioning businesses in July for non-compliance with posting calorie and nutrient information at their places of business (groceries, restaurants and convenience stores). According to Lyle Beckwith, senior VP of government affairs for NACS, “There are good reasons for everyone to wait. It is increasingly clear that the federal regulations have real problems that must be fixed before they go into effect.” A recent economic study confirmed that the total cost for the industry under the rule will be more than triple the FDA’s original estimate, reaching more than $300 million per year, and seven times the estimate for convenience stores…