Taking Stock

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Local Notes

Turkey Hill Minit Markets, the Conestoga, PA (Lancaster County) convenience store chain owned by Kroger, could be on the selling block soon. Cincinnati-based Kroger acknowledged that it is considering selling its entire c-store unit which includes other banners such as Quick Stop, Tom Thumb, Kwik Stop and the tantalizing Loaf ‘N Jug. As it continues to evaluate its overall portfolio, which has been adversely impacted by falling share prices, the merchant believes that it could receive greater value for its 784 c-store from an outside buyer or investor. “Our convenience stores are strong, successful and growing with the potential to grow even more,” said Mike Schlotman, Kroger’s executive VP and CFO. “We want to look at all options to ensure this part of the business is meeting its full potential. Considering the current premium multiples for convenience stores, we feel it is our obligation as a management team to undertake this review.” Turkey Hill Minit Markets alone operates about 250 c-stores whose estimated annual sales are approximately $350 million. “Our convenience store management and associates are an important part of our success,” Schlotman continued. “They put our customer first every day. We value what they do and thank them for what they will continue to do as we conduct this evaluation.” More Kroger news: 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…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 (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 is moving forward with two other previously reported new projects – in Philadelphia (Broad Street & Washington Avenue) and Moorestown, NJ (Moorestown Mall on the site of the former Macy’s)…MOM’s Organic Markets opened its first Center City store last month (and 18th overall) when it cut the ribbon on its very healthy location on 34 South 11th Street. This is MOM’s third Del-Val store (Bryn Mawr, PA and Cherry Hill, NJ)…another huge opening for Wegmans, which debuted its 108,000 square foot Montvale, NJ unit on September 24. Next up for the Rochester, NY-based uber retailer is its new Medford, MA store on November 5 followed by new mega-units in Natick, MA, Chantilly, VA and Lancaster, PA next year…multiple sources have told us that Ahold Delhaize’s bfresh small-sized perishables format concept is still alive. After three years of near inertia with only three stores to show for its efforts, we’re told that significantly more units are planned (two other Philly stores were previously announced) and that even more units could also appear in the Carolinas…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…Nine-store independent Gerrity’s Supermarkets has begun its first “click & collect” and home delivery service. In partnership with e-commerce technology provider Rosie, the Scranton, PA-based merchant has begun deliveries to customers in 25 ZIP codes in Lackawanna and Luzerne counties, which the company said will make online shopping simpler and more enjoyable. Earlier this year, C&S Wholesale Grocers announced that it is working with seven of its retail banner partners – including Gerrity’s – to create customized e-commerce and omnichannel programs for their stores…Washington, DC is one of eight new markets where 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 markets 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. Costco also announced it is stepping up its e-commerce game by announcing two new home delivery initiatives – one a “same day” program; the other a two-day delivery option. While critics continue to criticize Costco’s slow entry into the digital world, the club store king’s financials speak for themselves: Q4 earnings were up 18 percent and total sales increased from $36.6 billion to $42.3 billion. These guys profoundly understand the difference between too much process and selling more stuff…from the obituary desk, we report the passing of 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 died 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 interviews 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 very 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.