Taking Stock

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Local Notes

Wegmans will open its 82nd unit on September 15 in Germantown, MD. The 123,000 square foot mega-store will be the family-owned uber-retailer’s first Montgomery County unit and seventh store in Maryland. We’ve also talked recently about Wegmans’ potential interest in opening a new unit in the District of Columbia. According to a memo from Wegmans’ senior VP-real estate development Ralph Uttaro to Advisory Neighborhood Committee (ANC) commissioners, that interest for a site in the soon to be redeveloped former Walter Reed Army Medical Center on 16th Street NW is real. However, Uttaro told the ANC that any possible deal at the location would have to involve DC-based real estate firm Roadside Development LLC, which Wegmans works with exclusively. Uttaro noted that Wegmans has been studying the Walter Reed site for more than 18 months and has worked with Roadside to develop a plan “that meets Wegmans’ needs to create a successful store.” Uttaro expressed his concerns to the ANC that other developers that made presentations about the site have included Wegmans’ logo in their proposals or claimed that the Rochester, NY-based retailer has been having discussions with them regarding Wegmans’ plans. By the way, Wegmans’ next opening after Germantown will be in Montgomeryville, PA on November 3…while it was certainly major news in itself that The Fresh Grocer will be joining Wakefern as its 50th ShopRite member, there are a few important sidebars related to this move to recognize. Not only is Wakefern adding a solid and established merchant into its fold (about $165 million in annual retail sales), it now will also control The Fresh Grocer trademark, a potentially useful name and differentiated format (smaller size, perishables-driven) to attract prospective new members and offer existing ones an alternative growth option (along with the much speculated upon report that Wakefern will soon also offer the use of its PriceRite discount banner – currently all 53 PriceRites are corporately-owned – to existing members as another competitive weapon. Conversely, the loss of The Fresh Grocer is a big hit for Supervalu’s Eastern Region, which will lose its second largest independent banner. In speaking with owner Pat Burns about the shift, he emphasized the move was primarily driven by Wakefern’s opportunity to afford him long-term security as well as new programs and opportunities. And when asked, he went out of his way to praise the management team at Supervalu-Eastern Region (particularly president Kevin Kemp and senior VP Joe Della Noce). He also admitted that Supervalu’s corporate problems and challenges (mainly created by the previous Jeff Noddle and Craig Herkert regimes) were factors in his decision to leave Supervalu. However, all the Supervalu-Eastern Region news was not so glum as B. Green & Co., owner of three supermarkets, two cash & carries and a sizeable redistribution business, has signed a new supply contract with the wholesaler. Actually, B. Green has been a Supervalu customer ever since it sold its own wholesale grocery business to Richfood in 1993 (Supervalu acquired Richfood in 2000), but has been operating without a new long-term agreement for about six months. The new deal will now make the Baltimore independent Supervalu-Eastern region’s second largest customer and CEO Benjy Green has been named to SVU’s new retail advisory board. “We considered several very competitive offers, but in the end were impressed with what the new Supervalu team brought to the table,” Green stated.  “I want to thank (CEO) Sam Duncan and (Eastern Region president) Kevin Kemp for their creativity and tenacity in getting this deal done. Their personal involvement was invaluable.” Benjy later acknowledged that Duncan made two visits to B. Green’s Baltimore headquarters (apparently that’s two more than former CEOs Jeff Noddle or Craig Herkert made) and Kemp personally handled many of the final, intricate details… Don Ciotti, a veteran of Genuardi’s and Wal-Mart, before joining DA’s Bottom Dollar Foods (BDF) unit in 2010 has left the fledgling discounter as director of operations and has joined Giant Eagle’s Good Cents Grocery + More discount division in a similar capacity. In switching to Giant Eagle, Ciotti will now toil for one of BDF’s chief rivals and the largest grocer in the Pittsburgh/Youngstown market. Ironically, after a recent lull in new store activity, DBF recently opened new stores in Souderton, PA; Homestead, PA; and Woodbury, NJ. Delhaize America recently acknowledged that BDF has trimmed its losses, but is still unprofitable…the ageless Bernie Kenny and his team at Delaware Supermarkets opened their sixth ShopRite August 25 in Glasgow, DE. The former Super Fresh and Pathmark  (A&P) location has been expanded to 73,000 square feet and will be the second ShopRite operated by the company along the U.S. Route 40 corridor…another former  Tea Company unit (Pathmark) that recently reopened under a new banner was Weis’ 55,200 square foot Hillsborough, NJ unit which has been totally refurbished and looks great. Weis will soon open at the site of another former A&P unit in nearby Flanders, NJ, the western New Jersey berg where the Sunbury, PA regional chain once operated (that store is now a high-volume ShopRite). Weis also announced that the new Hillsborough unit, as well as stores in Newton, Franklin and Hackettstown, NJ along with stores in Conshohocken, Doylestown, Norristown (all former Genuardi’s locations) and Lansdale, PA have been added to the retailer’s online shopping service. With the addition of those eight units, Weis’ online service is now available at 14 locations…more obits than usual to report this month and that’s never a good thing. It’s with a heavy heart that we report the passing of the great Shirley Howard, founder and president of the Children’s Cancer Foundation (CCF). I’ve been fortunate to meet many great people in my life, but I can’t think of anyone who has made a more lasting impression on me than Shirley. Her sole mission was to improve the lives of hundreds of children who were afflicted with cancer. In fact, in nearly 39 years, she personally raised more than $30 million for CCF. And if you ever had a personal medical concern involving family or friends, Shirley would have the top doctor at Johns Hopkins, University of Maryland Hospital or Georgetown University Medical Center contact you within 24 hours. Her credibility and access were that powerful. During most of those years she didn’t accept a salary and worked tirelessly out of her Baltimore home (Shirley didn’t drive either, making her accomplishments even more astounding). During the funeral service, five distinguished speakers spoke about her unyielding persistence, all adding that it was Shirley’s passion and deep commitment to her cause that made her truly unique and special. Despite a difficult past 18 months, Shirley carried the torch until the end, determined to help as many young people as she could. I’ll miss her compassion and friendship very much. Also passing was another Baltimore original, Art Donovan, former defensive lineman for the original Baltimore Colts and one of the great characters to play during the NFL’s golden era. Actually, Donovan called the period from the early 1950s to the early 1960s the “blue collar” era, noting that the game was played primarily by “oversized coal miners and West Texas psychopaths.” I met Art numerous times after his retirement from pro football (he was elected to the NFL Hall of Fame in 1968), but there was one meeting that was unforgettable. Artie was the honoree at a charitable function and I was asked to serve as his unofficial aide (go-fer) prior to the event. Part of those duties included handling his food and beverage needs. A few hot dogs satiated Artie’s food whims, but satisfying his thirst desire was another story. That’s because Artie’s only request was for some Schlitz beer. Unfortunately by the mid-1980s, the once popular brew was almost impossible to find. I must have called more than a dozen liquor stores before disappointedly telling the big man that I could not locate his favorite beverage. Artie smiled and said, “Listen kid, there’s only one place in Baltimore that still carries Schlitz. Here’s the phone number, go pick up a case.” A case? Sure enough, the owner of a small liquor store in Dundalk, MD knew exactly what I was talking about. And while Artie didn’t drink the entire case, he came close. Also passing away last month was Joe McCarthy, one of the great old line warriors in the food business. McCarthy, who began his career with First National Supermarkets in the late 1940s (that’s where I first met him), spent 30 years at that now-defunct chain, rising to the position of senior VP. He later joined Grand Union for a four year stint (1977-1981) and spent the last nine years of his career with A&P where he started as senior VP of the company’s Metro New York group and later became EVP and COO for the entire Tea Company. Joe McCarthy was a no nonsense, tough, old school executive who knew virtually every aspect of the grocery business, and despite his gruffness, was always kind and helpful to me when I first began my career in 1974. He died in Naples, FL at age 91. One of the great modern crime novelists of our time, Elmore Leonard, has also died. Elmore was still writing almost every day (he wrote all of his books in longhand on unlined yellow pads) until nearly the end. His volume of work, which began in 1953 with “The Bounty Hunters,” was one of the most prolific and interesting of the past 50 years. Among his many novels which were ultimately made into motion pictures were “Out of Sight” (1998), “Jackie Brown” (1997), “52 Pick-Up” (1986) and one of my all-time favorite movies “Get Shorty” (1995). Born in New Orleans and raised in Detroit, where he lived most of his life, Leonard’s spare writing style and gritty realism made most of his novels a fun and absorbing read. Leonard was 87…a few final thoughts about the recent surprising departures of Giant/Landover president Anthony Hucker and Delhaize America CEO Roland Smith. I was disappointed to hear the news about Mr. Hucker. Anthony is an extremely intelligent and engaging personality who, unlike his predecessor, Robin Michel, was genuinely liked by Giant’s associates. There’s no question that the transition from his expertise in strategic management to a more operational-driven job was a challenge, but Anthony worked hard to make Giant a better place to work and a more visible presence in the community. In the end, it’s always about “the numbers” and clearly Giant has been struggling due to many factors that include economic and competitive issues and some that involve Ahold USA transitioning into a changing organization following the integration of many functions to Carlisle, PA. There’s also a new management structure in place led by James McCann, another talented Brit with an extremely high level of smarts and perhaps a different vision and makeup than the person who originally helped choose Hucker – the now retired Carl Schlicker. Sometimes the chemistry doesn’t work out, particularly if business at Giant (and for many retailers in the Baltimore-Washington market) isn’t clicking on all cylinders. With the search for a future fourth president in five years now under way, Giant not only must deliver better results, but it needs more management stability. We wish Anthony the best of luck in his future endeavors. As for Roland Smith, clearly the changing of the guard at parent company Delhaize Group (and subsequent loss of control of day-to-day U.S. operations) was the probable cause of his exit. It’s hard to evaluate Smith’s tenure, which lasted less than a year. While we heard the moniker “Chainsaw Jr.” tossed around by associates and vendors, it’s only fair to note that Smith was brought in to tighten the ship (he sold DA’s losing unit in Florida to Winn-Dixie) and change the culture, so “whackin’ and hackin’” would have been the first offensive deployment for any new leader. And while the trimming of the executive team and the brand “repositioning” of Food Lion has helped same store revenue and earnings, there’s so much more that’s needed to restore most of the Delhaize America store fleet back to sea level. It’s difficult to fathom any supermarket executive being able to successfully complete that task, given the damage that the Belgian retailer has inflicted upon it is flagship Food Lion unit over the past decade and the ferocity of the current competitive environment. Ask yourself this questions objectively: given the convenience of its locations and the recent pricing and merchandising upgrades, is there a significantly more compelling reason to make Food Lion your primary shopping destination today than there was 18 months ago? Even Beth Newlands Campbell, who late last year was named Food Lion president replacing the ousted aforementioned Cathy Green Burns (one of Smith’s first moves), acknowledged in a recent Charlotte Observer interview: .“…we have to get better.” Clearly, Newlands Campbell, a 26 year alumnus of sister firm Hannaford, gets the big picture, admitting that “…there’s an imperative to set us apart, You can’t be middle of the road.” But talkin’ it and walkin’ it in Food Lion’s case are still miles apart. Somehow, me thinks that a new non-American CEO (Frans Muller) based in Brussels, isn’t going to offer Delhaize the best opportunity to improve its U.S. business.