Mars To Close Depot; Bozzuto’s To Supply Balto. Independent
Although it’s been widely speculated for several months, Baltimore-based Mars Super Markets announced on January 8 that it will close its distribution center on Edison Highway March 9.
About 75 warehouse associates and truck drivers will be impacted by this move.
In turn, Bozzuto’s, the fast-growing voluntary wholesaler based in Cheshire, CT, will begin supplying the 17 Mars stores for all departments except frozens and HBC/GM, which are already being serviced by Burris and AWI respectively.
Bozzuto’s has been servicing some of Mars’ dairy SKUs since September in a cross-docking arrangement and expects to fully phase-in all other departments (grocery, meat, deli, candy) by March.
This is a huge move for both Mars and Bozzuto’s. Despite a more challenging and competitive landscape and the continued aging of an already inefficient warehouse (the old 300,000 square foot Food Fair depot which was built in the 1940s), the D’Anna family, which owns Mars, had steadfastly continued to serve its stores on a direct basis for most of its departments.
Certainly part of that had to do with local control, but Mars’ strong connection and loyalty to its associates have reportedly been important considerations in its minimal use of outside distributors in the past.
However, times are continuing to change for all supermarket operators as retailers, from the largest chains to one1store independents, seek greater efficiencies and productivity. That said, Bozzuto’s will certainly enhance those qualities by helping expand Mars’ product line, utilizing its buying power to extract better deals and giving Mars a broader perspective and periphery about the entire business.
We’re told that Mars’ current merchandising/procurement staff will remain intact and that the regional operator will still be handling product decisions, ad planning and strategic merchandising objectives from its Baltimore headquarters (although product will be drayed from Bozzuto’s large depot in Central Connecticut). Several sources told us that it was important for Mars to stay closely connected to the local vendor/broker community.
Sources have indicated that Bozzuto’s will occupy some, if not all, of the space in the Mars DC and could rehire some of the warehouse workers who were impacted by the depot closure.
For Bozzuto’s, the addition of the Mars business represents a potentially major opportunity – not only in the volume of new business that will be gained, but in the fact that it positions the family-owned wholesaler for greater growth in the Mid-Atlantic and southward.
We’ve heard from several independent retailers in the Mid-Atlantic who were visited by Bozzuto’s in the past few years. All said they were impressed with Bozzuto’s presentations and recognized their strong reputation with the independent retailer community. However, they were reluctant to switch to a wholesaler with a limited customer base in the region and one that might have distance issues in terms of potential drayage.
Now, with the addition of Mars’ business, Bozzuto’s gains further credibility and traction in terms of supplying a foundational customer in the region. Additionally, we’ve learned that Bozzuto’s is exploring sites in the northern Maryland/Delaware area to build a potential one million square foot new distribution center which would certainly resolve the drayage/distance issue.
Having known the Bozzuto’s leadership team for many years, don’t underestimate their talent, resolve and risk-taking abilities to expand their business.