Taking Stock

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Local Notes

As reported by us a few months ago, Sprouts has confirmed it will be opening its first Mid-Atlantic store in Ellicott City, MD. The Ellicott City unit (9150 Baltimore National Pike – the site of a former Mars Super Market) will be one of nine new stores that will open in Q1 of 2018 by the Phoenix, AZ-based fresh, natural and organic merchant. All told, the fast growing retailer plans on 30 new stores nationally next year. Maryland will be 16th state where the company will operate stores. Although it’s not yet been confirmed by the company, it appears that Sprouts will add two more states to that list – Pennsylvania – Philadelphia (Broad Street & Washington Avenue) and New Jersey – Moorestown (Moorestown Mall on the site of the former Macy’s)…Weis Markets completed its 210,000 square foot expansion of its primary distribution center in Milton, PA. “With this expansion, we’re enhancing the distribution center’s productivity and viability, and we’re improving our company’s competitiveness,” said chairman and CEO Jonathan Weis. “We plan to continue expanding this distribution center as our company grows, providing new job opportunities for people in the Central Susquehanna Valley.” The expansion of the distribution center, which supplies 204 Weis Markets locations in its seven-state market area, provides all stores with an increased variety of products on its shelves. In 2018, Weis will begin the expansion of the distribution center’s produce storage area. The upgrade and modernization of the facility comes at a time of record growth for the company, as it expanded its footprint by roughly 25 percent in 2016 with the acquisition of 44 new stores. As a result of this growth, Weis has added 150 full-time jobs at the distribution center, bringing the total number of full-time associates at the location to 900. The expansion also helps Weis to realize its mission of reducing its environmental impact. The new expansion includes sustainability measures such as use of an ammonia refrigeration system, which allows Weis to reduce the usage of refrigerants moving forward. The project also further streamlines the company’s supply chain, allowing the company to reduce diesel fuel usage by more than 23,000 gallons a year…we’re hearing that there’s been some movement in Supervalu’s effort to sell its Farm Fresh corporate unit and that there will be an announcement on who might buy the beleaguered 40-store Hampton Roads chain in the next couple of months. Don’t expect all the stores to be sold. I also believe there will be several buyers involved, with Kroger/Harris Teeter being a likely player in that equation…perhaps to counter a decision made by Whole Foods to centralize many of its merchandising functions, Kroger has unveiled a new portal to its website – kroger.com/wearelocal – to emphasize the importance of carrying local and regional brands. The company’s announcement, in part, noted the retailer’s longstanding, 365-day-a-year commitment to support local farmers, ranchers, food producers, wineries, breweries and product makers…Washington, DC is one of eight new markets that Target has added to its “Restock” program, which allows customers to order online from a list of about 15,000 items which will be delivered the next day for a $4.99 fee. The weight limit for deliveries is 45 pounds and includes mostly household and HBC products. “Restock” is now available in 11 market nationally…are private equity firms Leonard Green & Partners and CVC Capital Partners in the process of putting BJ’s Wholesale Club on the sales block? That’s been rumored for nearly a year, but the funky New York Post gave new life to the story, claiming the Westborough, MA club merchant will be available soon. The Post story noted that the financial partners, which acquired BJ’s in 2011 for $2.8 billion, are hoping for an offer in the $4.5 billion range… there was an interesting story last month in the Wall Street Journal about BJ’s chief rival, Costco, which noted that the biggest club operator in the country achieved about 25 percent of its overall annual revenue ($118.7 billion) from its Kirkland Signature private label. And that number keeps growing as the Issaquah, WA discounter looks to grow its private label sales. According to the story, whose premise I agree with, the pressure manufacturers face from private brands is set to increase…building successful store brands is a priority at Wal-Mart and Amazon.com Inc. as they battle to boost margins and attract shoppers. After Amazon acquired Whole Foods, it quickly added the grocer’s store brand 365 to its online food offerings. Wal-Mart and its warehouse chain, Sam’s Club, are also reworking and adding to their store brands…as part of a planned leadership succession at Dollar Tree Stores, Gary Philbin has been promoted to president and CEO following the retirement of the legendary Bob Sasser (who will remain on Dollar Tree’s board as executive chairman). Philbin joined the Chesapeake, VA-based dollar merchant in 2001 and became COO in 2013. Sasser, who came to Dollar Tree in 1999 as COO, became chief executive three years later. During his 15 years at the helm, Dollar Tree grew from a company with 18,000 employees, fewer than 1,200 stores in 33 states, four distribution centers and less than $1 billion in annual sales to become a Fortune 150 company with nearly 180,000 associates, more than 14,500 stores and 24 distribution centers across North America. For 2017, revenues are expected to surpass $22 billion. During Sasser’s tenure, the company completed six acquisitions including its $9.1 billion purchase of Family Dollar stores in 2015…some special shout-outs to a few of my favorite industry friends. Mark Batenic, CEO of IGA since 2006, has announced his retirement. Batenic will be succeeded by John Ross, who currently is president of Inmar Promotion Network, effective next month. Batenic will stay on as chairman until December 2018 (when he will become non-executive chairman). One of the classiest and hardest working industry executives that I’ve ever come across, Mark Batenic is a true mensch – treating people with respect and giving generously to many of the industry’s charitable causes. Dating back to when I first met Mark when he oversaw Fleming’s operations in Philadelphia, he’s always been the same kind person that he is today. And even though he won’t be leaving just yet, I wish him all the best in his future endeavors. Also, a tip of the hat to John Saidnawey, who earlier this month was promoted to chairman and CEO of JOH, the large regional brokerage organization based in Billerica, MA. Additionally, Matt O’Hare will become president and COO while his dad Chip becomes chairman emeritus. My history with the original Johnson O’Hare firm dates back to 1973 when Chip’s dad Harry ran the company and Chip, like me, was just learning his craft (yes, we’re that old). I first met John Saidnawey in the early 1980s and his intelligence, tenacity, people skills and untiring work ethic have earned him many promotions at the company including his leadership role today at one of the country’s fastest growing brokerage operations…sadly, there were several notable deaths to report over the past month, including Jake LaMotta. The former world middleweight champion boxer, who learned his craft in reform school in New York, became a larger-than-life figure following the release of the Martin Scorsese film, “Raging Bull” in 1980 (where he was portrayed by Robert De Niro in what arguably was his greatest acting role). He was also regarded as one of the toughest boxers of all time who fought the great Sugar Ray Robinson five times (he only won once). He originally defeated Marcel Cerdan in 1949 to gain the middleweight title. LaMotta said that the portrayal of him by De Niro was 90 percent accurate, and he credited both the actor and Scorsese with having helped resuscitate his later life which had endured business failures, a prison stint and six marriages. “Without the film, I’d be in bad shape. It made me champ all over again.” LaMotta was 95 when he passed…also passing on was Monty Hall, creator and host of the classic TV game show “Let’s Make A Deal” (Hall hosted “Deal” from 1963 to1976; versions with other hosts continue to this day). Hall, who grew up in Canada, wanted to be a doctor but got bitten by the show biz bug and in 1955 moved to New York to seek fame and fortune. He hosted more than 5,000 episodes of the show that found contestants, who often dressed in zany costumes, vying for a chance to win valuable prizes or get “zonked.” As creator of the show, Hall, 96, became extremely wealthy and in his later years was a major philanthropist…one of my favorite character actors of all times, Harry Dean Stanton, has passed away at the age of 91. I consider Stanton (along with M. Emmet Walsh) to be the one of the most memorable and prolific actors who by his sheer charisma and ability rose to a level well above “that guy” status. His fleeting moment as a leading man came in 1984 in the movie “Paris, Texas,” which won the coveted Palme d’Or at the Cannes Film Festival. I first noticed Stanton as a fellow inmate of Paul Newman in “Cool Hand Luke” (1967) in which he sang three songs (Stanton had an excellent voice and his 2014 album “Partly Fiction” is certainly worth a listen). Other memorable roles included parts in “Repo Man” (1984); “Straight Time” (1978 – a great unsung movie starring Dustin Hoffman which also featured the aforementioned Mr. Walsh) and HBO’s “Big Love” series in which he played Roman Grant, a self-proclaimed prophet with 14 wives (the show was about polygamists)…Hugh Hefner, 91, is dead, too. As an aging baby boomer, I can honestly state that few men of my generation had their adolescent years more influenced by anyone than by the founder of “Playboy Magazine.” The son of conservative Protestants from Nebraska, “Hef” started “Playboy” in 1953 with $600 of his own money. By the time the company went public in 1971, its monthly circulation was 7 million. Playboy also owned nightclubs and produced several television shows. 1971 was also the year that Hefner acquired the Playboy Mansion in Los Angeles (now owned by hedge fund executive Daren Metropoulos who allowed Hefner to live there until his death). “I’ve never thought of Playboy, quite frankly, as a sex magazine. I always thought of it as a lifestyle magazine, in which sex was one important ingredient,” Hefner told CNN several years ago. And he was right, kind of. Although we all looked at the centerfold (never, ever look under a teenager’s bed), many of us enjoyed the monthly Playboy interview as well as interesting literary contributions from such great authors as Ray Bradbury, John Updike and Vladimir Nabokov. Hugh Hefner was truly larger than life, and comedian Patton Oswalt perhaps described Hefner’s ultimate destiny best when he noted, “As per his wishes, Hugh Hefner’s body will be left in a fort in the woods for other kids to find and pass around.”…I was distraught to learn of the passing of Tom Petty, the legendary singer and songwriter who died suddenly earlier this month at the age of 66. To me, in the post-Beatles era, Tom Petty best symbolized what great rock and roll is all about. He was an everyman music junkie who wrote beautiful songs, had a great band (which remained virtually unchanged for 40 years), was respectful of other musicians and very dedicated to his fans. Along with his group, “The Heartbreakers,” Petty released 13 studio albums. He also released two albums with his original band Mudcrutch, three as a part of the supergroup The Traveling Wilburys as well as three solo albums. While many readers might be familiar with Petty’s blockbuster albums such as “You’re Going To Get It” (1978) and “Damn The Torpedoes” (1979), I recommend his solo “Wildflowers” (1994) album as one of Petty’s best and most introspective compilations. Tom Petty was a profoundly talented and popular musician who continued to be prolific into his 60s, with “Hypnotic Eye” (2014), reaching Billboard number one status. In fact, Petty had just completed a more than 50-concert tour as part of the band’s 40th anniversary a week before he died of cardiac arrest. One of the great rockers of all-time – in every sense of the word – Tom Petty will be greatly missed.