Taking Stock

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Local Notes 

We’re hearing that that A&P is very close to finalizing a deal for its Food Emporium unit (16 stores in Manhattan). We’re hearing that private equity firm Angelo, Gordon & Co. is in the mix, which would reportedly include multiple buyers. That would be great news for our friend, Judy Spires, CEO of Balducci’s and Kings, both controlled by Angelo, Gordon…it will be interesting to watch what culture changes might occur at Ahold USA once James McCann takes the helm as COO, replacing Carl Schlicker who is retiring on February 1. Schlicker, as noted in past reporting, was one of the best leaders (and finest people) of this generation in the grocery business. An operator by nature, Schlicker’s people skills and blunt approach were greatly admired. McCann is said to be more introverted and process-oriented. We’ll see how the potential difference in styles plays out. In the meantime, there already have been some personnel changes in the past month. Senior VP-fresh Steve Mayer has departed and been replaced on an interim bases by John Ruane, the ex-Pathmark executive who’s been at Stop & Shop’s New York division for more than a year. Ruane’s another executive with strong people skills and excellent street smarts and he should fit in well in Carlisle. Also departing is AUSA’s John Dettenwanger, who served as the retailer’s chief information officer (CIO). He joined Ahold USA in 2010 from E.I. DuPont. Just before presstime, Ahold announced its fourth quarter and year-end sales for 2012 (the full earnings report will be released in about a month). The Amsterdam based retailer posted a 7.5 percent net sales increase to $10.4 billion in its fourth quarter. For the full year, consolidated net sales were $43.75 billion, an increase of 8.5 percent compared to 2011. In the U.S., which accounts for more than 60 percent of Ahold’s revenues, overall sales were up 4.3 percent. The company said its strong performance in the quarter was partly driving by the “exceptional efforts of our teams during Hurricane Sandy, which enabled our stores to remain open and serve our customers during these difficult times.” However, Ahold also noted that the positive impact of Sandy was partially offset by a negative calendar due to the timing of year-end, adding that the retailer continued to  gain market share in all divisions. It also stated that the 15 Genuardi’s stores it acquired in 2012 performed in line with expectations and that it opened another four “pick-up points” related to its Peapod internet business,  bringing the total to eight in the U.S. On the divisional level, Dean Wilkinson has been named VP-sales and merchandising at Giant/Landover. Wilkinson, who has been G/L for 14 years and Stop & Shop before that, replaces Jim Nazzaro, who likely will remain in the AUSA family in a yet unspecified job that will place him closer to his Boston area home. At Giant/Carlisle, a new partnership has been announced between the regional chain and Philadelphia based Di Bruno Bros., an iconic name in Delaware Valley foodie-land. G/C is expanding the brand (just like Kroger did with landmark Manhattan cheese merchant Murray’s) and on January 24 will open a brand new cheese and specialty food shop at its 100,000 square foot flagship store in Camp Hill, PA…just a stone’s throw down the road in Camp Hills is Rite Aid’s headquarters and we’re happy to report that the beleaguered drug merchant posted its first profitable quarter in more than five years when it earned $60.5 million in its third quarter ended December 1 (compared with a $54.5 million loss in the corresponding period in the prior year). The Camp Hill, PA drug chain last posted black ink in May 2007 and has gone through a series of tumultuous management and operational changes that really dates back to the late 1990s when Martin “My Ass Is” Grass, corruptly served as Rite Aid’s chief executive (his father Alex founded the company in 1962). In her seven year tenure as CEO, Mary Sammons (another Bob Miller connection) was unsuccessful in changing the scorecard at Rite Aid, but the nation’s third largest drug retailer seems to be finally on the right track under the guidance of John Standley, who took the helm in 2010 (he also served as CEO of Pathmark from 2005-2007). Still, big challenges remain as overall sales fell 1.5 percent and same store sales dipped 1.2 percent. Rite Aid said it was helped by increased prescription sales (which were aided by Walgreens’ dissolution of its agreement with Express Scripts for most of 2012; it has subsequently resumed its relationship with Express Scripts) and rising sales of general merchandise products at its nearly 4,600 stores. And the unexpected good news pulled Rite Aid out of the “penny stock zone” – its stock price rising from 97 cents a share on December 6 to its current value of $1.40 per share (the earnings announcement wasn’t issued until December 20)…Village Super Markets saw its first quarter earnings dip 13 percent to $5.9 million in the period ended October 27. Overall sales increased 4.5 percent to $358.2 million. Same stores sales also rose 2.8 percent. The Springfield, NJ ShopRite operator attributed the decreased earnings to higher expenses and lower gross margins, even with a boost in revenue from Superstorm Sandy. Village, which celebrates its 75th anniversary this year, currently operates 29 stores in New Jersey, Pennsylvania and Maryland and is the second largest member of Wakefern and its only publicly-traded retailer…Weis Markets has named Profitect as its newest analytics provider. The Waltham, MA based firm will utilize its cloud-based Profit Amplification tool to aid the Sunbury, PA with pattern seeking analytics throughout its 162 store network. Weis also announced that it will continue with its 90 day price freezing program which began in January 2009 and involves price reductions and stable pricing on more than 2,000 products… a tip of the hat to Tom Dempsey, former president of Utz Snack Foods, who retired at the end of the year. Me thinks that Dempsey, who spent 24 years helping grow the Hanover, PA snack food firm, still has a lot in his tank and will emerge again as a key contributor in this business. Also kudos to Charlie Schuster, who runs the day-to-day affairs at Horsham, PA based RMG (Retail marketing Group) will be stepping down later this year. Charlie has served the industry with dignity for almost 40 years and in his most recent gig has been a very positive force with the independent Thriftway and Shop ‘N Bag independents. I’m really going to miss the Charlie’s insights and opinions about the business. The most capable Bill Gable, who has served as Schuster’s deputy for many years, will replace Charlie when he steps down… sadly, a lot of obits to report this month. Former president of UFCW Local 1776 Wendell Young III passed away last month. Young III, 74, presided over the Delaware Valley’s largest labor union for an incredible 43 years (he was elected president at age 22). For many years, Young III wrote a monthly column in Food Trade News, penning his views about labor issues. Although our perspectives often differed, Young was always prepared and well-versed to defend his position. He was also a man of great warmth and wit who handled difficult, often adversarial situations with a twinkle in his eye, never losing sight of the goal at hand and showing respect for the party sitting across the table…also passing on was the great General Norman Schwarzkopf has passed away at the age of 78. A 1956 West Point graduate, Schwarzkopf served in the U.S. Army until his retirement in 1992. Stormin’ Norman was best known for his role in leading the U.S. effort in Operation Desert Storm in 1990. His quiet but steely demeanor made him popular as a no-nonsense take charge leader in America’s first Mideast war. After his death was announced on December 27, President Barack Obama said, “With the passing of General Norman Schwarzkopf, we’ve lost an American original. From his decorated service in Vietnam to the historic liberation of Kuwait, and his leadership of United States Central Command, General Schwarzkopf stood tall for the country and the Army he loved. Our prayers are with the Schwarzkopf family, who tonight can know that his legacy will endure in a nation that is more secure because of his patriotic service.”…and from the world of entertainment passing on was character actor Charles Durning, 89, who also served his country in a heroic fashion. Durning, who appeared in more than 200 movies, television shows and theatrical roles, is best known for his roles as a corrupt police officer in “The Sting” (1973) and as Dustin Hoffman’s wannabe boyfriend in “Tootsie” (1982). Although he didn’t make his mark as an actor until he was nearly 50, Durning had quite a career as an infantryman in the U.S. Army during World War II. He was among the first soldiers to land on the Normandy beaches during the D-Day invasion of June 6, 1944. Durning was wounded in battle three times, captured by Nazi troops and escaped a deadly massacre of U.S. troops during the war. He later helped liberate the Buchenwald concentration camp. He also fought in the Battle of the Bulge and was bayoneted eight times. Durning was awarded the Silver Star, Bronze Star and three Purple Hearts…Jack Klugman has also died. His portrayal of sloppy sportswriter Oscar Madison on the TV series “The Odd Couple” (1970-1975) defined Klugman’s image as an actor (he reprised the role originally played by Walter Matthau in the 1968 movie of the same name). But Klugman’s talents transcended his iconic character. He starred in the TV show “Quincy, M.E.” from 1976 to 1983, but also had strong co-starring roles in Sidney Lumet’s “Twelve Angry Men” (1957) and Blake Edwards’ “Days of Wine and Roses” (1962). Klugman, 90, was born and raised in Philadelphia…Fontella Bass, 72 has also died. The former R&B singer had only one major hit during her long career, but what a voice she possessed. Her own composition “Rescue Me,” rose to the top position in 1965 (the song featured one of the great bass lines in R&B history – performed by Louis Satterfield, who later was with the band Earth, Wind & Fire). Bass, who began her professional career in her native St. Louis in 1957, continued to perform until 2005…finally, a very special salute to Mike Keba, who retired at the end of the year from Food Trade News. Mike joined us nearly 20 years ago after a very successful career at A&P and Wetterau. The fact that Mike knew little about the newspaper business and even less about selling advertising didn’t matter at all. His professionalism, tenacity (which he still maintains to today in his mid-80s), and sagacious level of industry and street intelligence made him a very special person. Mike, we’ll miss your industry perspective, your sense of humor and your humility.

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