Taking Stock

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Local Notes

It was good to hear new Delhaize America CEO Roland “Chainsaw Jr.” Smith address the analysts following the retailer’s earnings conference call last month (see story on page 1), but I’m still clueless on what his vision or plan is to turn around the troubled retailer. Overall sales, comp revenue and earnings are still declining (not Smith’s doing), but all I’ve witnessed thus far are about 45 store closings and restructured management team that doesn’t include significant new blood and asks the executives who survived the whacking to absorb more responsibility. I’ve been visiting Food Lion stores and Bottom Dollar units more regularly since Smith took the helm from the retired Ron Hodge last October, but I haven’t seen any game changing moves that I believe will significantly improve the company’s current “stuck in the middle” image or volume potential. Maybe we’ll learn more at Delhaize’s “Capital Markets Day” on May 8, the same day the retailer will release its first quarter earnings…two new “stores of the month to note: Safeway’s reconstructed Alexandria, VA (Belleview Boulevard) unit is a real winner. The 45,000 square foot store reopened last month (it had been closed since September 2012) and the new version was crafted beautifully with outstanding fresh departments and an impressive décor package. The Belleview location is unique too: a favorable demographic that it still protected from competitive overstoring – it’s a neighborhood store that will pay big dividends for Safeway. Another neighborhood unit, this one also in an overstored local market – Ellicott City, MD – opened earlier this month and will certainly upset the competitive of that upscale berg. I’m talking about the new 48,000 square foot Harris Teeter that opened adjacent to Turf Valley Golf Club on Route 40. While there’s no shortage of shopping choices in the town where I reside, the new HT did it right with its typical perishables-driven, service-oriented style. And when you make the seven mile drive from the Howard County line to the new Harris Teeter, you’ll find plenty of shopping choices, but not much excitement in terms of new physical plants or merchandising sizzle. Harris Teeter also announced that it will reopen its Potomac Yard unit in Alexandria, VA later this year. That store, which debuted in 2007, has been closed for nearly a year due to an interior flood. The new store will be virtually rebuilt. Harris Teeter has also broken ground on a new 50,000 square foot unit in Gaithersburg, MD at the site of the former Crown Farm (Sam Eig Highway and Route 270). The new store, which should open next year, is part of 180 acre mixed use development. And, nothing more specific to report about the Teeter’s “sales exploration” process to report, but I expect a prospectus to be on the street with the next month. I’ve been hearing some rumbles from my Wall Street friends that if the company is sold, this no longer is setting up as a private equity deal…there’s an interesting little battle going on at the site of the Rotunda in Baltimore. Ever since Giant/Landover left that site after a 41 year run (it acquired the old Super Fresh-Fresh & Green’s site at nearby 41st Street), the iconic mall has been seeking a new tenant as it also undergoes a major facelift. It appeared that Graul’s Market had the inside track (which would be a great fit for the neighborhood), but apparently the Rotunda’s developer, Hekemian & Co., is reviewing all proposals, which now reportedly include strong interest from MOMS (My Organic Market) and The Fresh Market…also in Baltimore: it appears that Wal-Mart’s long-term interest in the site of the former Pemco International plant in East Baltimore (across from the Johns Hopkins Bayview campus), is back on again with the potential sale of the 19 acre parcel…I was fortunate enough to be invited to Carl Schlicker’s retirement dinner in Philadelphia last month and it was really a special evening. Not only was it great to see so many old friends, Carl’s speech to the 150 attendees was truly touching. The highlight for me was when Carl spoke about his nearly 40 year journey in the food business and noted that his days as a store manager represented “the best job I ever had.” Intelligent, humble, hard working, self-deprecating, street-wise and charitable – that’s a special combination. Also, something that bears watching at Ahold USA: one of the first important moves made by new COO James McCann is the abandonment of the company’s slow-moving, expensive and labor and capital intensive Oracle Retail Solutions project, which was begun several years ago and designed to create a modern and efficient technology tool set. Over the past two years, I’ve heard plenty of criticism from Ahold associates and vendors about the bureaucracy that the Oracle project had become, pulling key people away from their primary duties at the company and costing Ahold tens of millions of dollars. Glad to see McCann step forward and clear the decks for what hopefully will result in more simplified, efficient solutions. And at AUSA’s Stop & Shop-New England division (its largest unit), five UFCW Locals (328, 371, 919, 1445 and 1459) representing 40,000 clerks and meatcutters have agreed with the retailer on new three year contracts, retroactive to February 24…happy to hear of the promotion of one of the hardest working men in the business, Mike Mignola, to senior VP-store operations at Weis Markets. Also deservedly being elevated recently was Jan tenPas, from director of finance and operations at the Maryland & Virginia Milk Producers Cooperative (Marva Maid, Maola Co.). I’ve known Jan since his Richfood days and he’s one of the hardest working, brightest dudes in the dairy business… a belated tip of the hat to my buddy, Tom Potter, who recently retired after a sparkling 45 year career in the grocery business. Tom has spent the last 12 years as a VP for Acosta, but cut his teeth in his 30 years with Campbell Sales. A tireless worker and a true student of the business, it was Tom’s candor and no BS approach that made him a unique individual among all peddlers. Best of luck my friend, in all things that you seek to do down the road. ..another excellent “Food Industry Summit” at Saint Joseph’s University last month. This year’s topic, “Leveraging Consumer Insights at the Moment of Truth,” was not only a sellout at the Haub School of Business, it attracted 10 excellent speakers from the grocery and technology industries. The highlights for me were the presentations of Erik Keptner, executive VP-marketing at Ahold USA who teamed with Jeff Gregori, VP-consumer and shopper insights at Nielsen; and Cheryl Williams, VP-digital commerce and innovation at Wakefern, who partnered with McCormick chief information officer and VP-digital commerce Jerry Wolfe. There’s always choice meat to be devoured at the annual Food Summit confab…Peter Ackerman, the founding investor of web-based grocer FreshDirect and managing director of Rockport Capital, a private equity firm has been appointed to a three-year term as a director of the Capital Area Food Bank,… some obituaries of note this month to report. From the food industry, I was very said to hear of the passing of Don Zettle, 83, who for many years served as director of advertising for Safeway’s eastern division and, all told, spent an incredible 49 years with the Pleasanton, CA retailer. Don was a true gentleman who mentored many people in his long career with the company. Also passing on was Bill Heintzelman, veteran food broker in the Balt-Wash market (Mid-Atlantic Sales & Marketing) who left this good earth on February 28. I received a lovely note from his wife, Shirley, who expressed how much he loved the food business, adding that his passion for selling never wavered, even during his illness. It’s sad to say goodbye to another good guy who was part of the strong fabric that binds the grocery business…dying unexpectedly last month was Alvin Lee, founder of the pioneering rock band Ten Years After (one of my early influences) and a very fine guitar player to boot. Lee was only 68 when he passed away during a routine surgical procedure. Ten Years After was formed in 1967 in England, but made its first big mark on the music scene at a memorable performance at Woodstock in 1969 (great Lee solo on “I’m Going Home”). All told, Lee released more than 20 albums in a variety of musical genres and recorded with many of the rock’s greatest musicians including Steve Winwood and George Harrison…

Jeff Metzger can be reached at jmetzger@best-met.com