Taking Stock

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‘Round The Trade

Supervalu might not be able to sell a lot of groceries, but it appears its legal department is still percolating. The big retailer/wholesaler has sued (in Minnesota) Leon Bergmann, the former president of its independent wholesale division, claiming Bergmann (ex-C&S) violated his non-compete agreement when he recently joined Unified Grocers as senior VP-sales, SVU’s largest wholesale competitor on the West Coast. Unified has also sued in a California court seeking to invalidate the non-compete agreement. Strangely, another former Supervalu senior executive, Sue Klug, former president of SVU’s Albertsons division in SoCal, has also joined Unified as chief marketing officer, but no legal action against her is pending. One last Supervalu note: the company managed to secure the last shipment of Twinkies (20,000 boxes) from Hostess Brands and plans to sell them at its struggling Jewel/Osco stores in the Chicago area. A perfect example of misery loving company…staying out West, now that Tesco has announced it will pull the plug on its failed Fresh & Easy experiment, it should be interesting to see who picks up the pieces. The Fresh & Easy story is really a simple one to recap: haughty, arrogant British retailer thinks it can build a better mousetrap (based on its overall corporate success in the U.K.) only to find that its flawed research led to an instant disconnect with U.S. consumers in California, Arizona and Nevada. Between Marks & Spencer, Sainsbury and now Tesco, perhaps the Brits would be better served choosing another country for expansion. As for those “pieces” (stores), if Wal-Mart is ever going to do more than “talk the talk” about expanding its small format operation, the opportunity to acquire the entire 200 store Fresh & Easy operation is staring them squarely in the eye…back to Minnesota: I was surprised to hear of the departure of Christoper Brown as president and chief operating officer of Minneapolis based wholesale Nash Finch. Brown, 52, was replaced by Kevin Elliott, who most recently was senior VP-merchandising, logistics and marketing at Dallas based 7-Eleven. Brown, who began his working relationship with Alec Covington, Nash Finch’s CEO, nearly 25 years ago, will certainly find new opportunities to choose from given his intelligence, tireless work and industry track record. But sometimes long-term successful relationships run their course, necessitating change (ask Andy Reid about that in another month or so)…on the manufacturing front, ConAgra has agreed to acquire Ralcorp, giving the Omaha based packer one of the best-balanced portfolios of branded and private label products of any food manufacturer. The transaction is valued at approximately $6.8 billion, including the assumption of debt. The acquisition will create one of the largest packaged food companies inNorth America, with sales of approximately $18 billion annually. It will also position ConAgra Foods as the largest private label packaged food business in theU.S., with combined private label sales of approximately $4.5 billion. “The acquisition of Ralcorp is a logical and exciting step for ConAgra Foods. Adding Ralcorp provides us with a much larger presence in the attractive and growing private label segment and accelerates our ‘Recipe for Growth’ strategy,” Gary Rodkin, chief executive officer of ConAgra stated…in news from the Southern tip of the Mid-Atlantic region, I had a chance to visit Kroger’s new Marketplace store in Richmond earlier this month. Wow! What a store. The new 123,600 square foot unit offers more than 300,000 items including furniture, jewelry and home fashion and décor. The food presentation, particularly its fresh departments, was magnificent. Kroger, which recently highlighted its aggressive expansion plans in the Tidewater market, will open a 124,000 square foot Marketplace at an old SuperK location in Virginia Beach next year and will cut the ribbon on its second Richmond area (Staple Mills & Hungary Road) Marketplace in 2014 and according to company officials will have a minimum of 10 Marketplaces by 2017…in union news of note, there’s been a big restructuring at Landover, MD-based UFCW Local 400, the largest local labor union in the country for clerks and meatcutters. Tom P. McNutt, who has served as president of Local 400 since May 2010 (following the retirement of Jim Lowthers), has resigned to accept a position with the UFCW International in Washington. Former secretary-treasurer of Local 400, Mark Federici, assumes the top post at Local 400. Federici issued the following statement: “I look forward to building on the strong foundation President McNutt leaves behind. As the Local union’s leadership changes hands, the entire staff and I will continue to work towards our primary goal of ensuring that the good wages and benefits of our members are protected and that our members receive the same high quality representation that the Local union has always provided.” McNutt’s father, Thomas R. McNutt, an iconic figure in the labor movement, served as president of Local 400 from 1976-1997.