Taking Stock

Print Friendly

‘Round The Trade

While Wegmans may have lost the battle to gain a beer, wine and liquor license in its new Columbia, MD store (it is appealing the ruling), it did gain approval to build its proposed new store in Owings Mills, MD. By a 6-1 vote, the Baltimore County Council approved the development of a $140 million retail project by developer Greenburg Gibbons (which also developed Wegmans’ first Maryland store in Hunt Valley and is developing Wegmans’ next new store in Gambrills, MD, which will debut on October 28). The Wegmans store will be the largest tenant in the $140 million Foundry Row shopping center, which is located on the site of the former Solo Cup manufacturing plant on Route 140 (Reisterstown Road)…although July and August will never be considered strong sales months (unless you’re on the Outer Banks or in Bethany Beach, DE), retailers tell us that sales have been particularly soft during this year’s post-July 4 period. Of course, there are always exceptions, such as Costco, where comp store sales in August increased 6 percent at its U.S. stores (excluding gas). Also from the alternate channel portal, Target posted flat earnings – $704 million – in its second period ended July 30. However comp store revenue rose a solid 3.1 percent and August comps rose 4.2 percent. Both retailers noted that transaction size and traffic – two metrics that many supermarket operators continue to struggle with – increased. Target also announced it will soon begin to open the first of approximately 130 stores inCanada, its first foray in our neighbor to the North. The Minneapolis based mass merchant also said it was pleased with the initial results of its first three City Target locations in Seattle, Los Angeles and Chicago. Like rival Wal-Mart, Target is developing an urban model about two-thirds the size of a typical Target store and company officials hope to open between 75 and 200 such stores over the next five years as the company pursues its goal to reach $100 million in sales by 2017…more locally, Weis continued its solid sales and earnings run. In its second quarter, ended June 30, the Sunbury, PA regional chain increased its earnings 11.4 percent to $35.3 million while comp revenue inched forward by 0.4 percent. “We are operating in a stagnant sales environment resulting from the poor economy and intense competition. In the second quarter, we continued to improve efficiencies and productivity at store level and in our supply chain while enhancing the quality of our customer shopping experience in terms of our in-stock position and overall freshness,” said Weis Markets’ president and CEO David J. Hepfinger. “We also continued to invest in our growth by acquiring and reopening three units in the Delaware Valley and extensively remodeling six units.” The company also attributed its net income and operating income increases to disciplined promotions and marketing and a decrease in depreciation expenses when it changed depreciation methods from accelerated to straight-line… finally, a judge who understands the free enterprise system as it pertains to selling beer, wine and liquor in food stores.U.S.district Judge John G. Heyburn II has ruled that aKentuckylaw allowing the sales of wine and liquor by some retailers – but not others – violates the U. S. Constitution. Heyburn cited that the denial of licenses to a certain segment is a violation of the equal protection clause of the 14th Amendment. Can’t we arrange a transfer of Heyburn to the Mid-Atlantic so he can rule similarly in Maryland, Pennsylvania and New Jersey?…after Save-A-Lot COO Tom Lenkevich left the extreme value division of Supervalu in July, we learned that Andrea Wagner, Save-A-Lot’s VP-marketing has also recently departed. New CEO Wayne Sales’ job will be challenging enough, he doesn’t need more key executives leaving the nest…Dollar General, the highly successful dollar store merchant, announced it will build a new 900,000 square foot distribution center in Bethel Township, PA, which would add about 500 new jobs. When the depot opens next year it will be the 12th warehouse for the growing Goodlettsville, TN based retailer…Relay Foods (www.relayfoods.com) announced that it has expanded its online home delivery service – featuring 11,000 grocery items – to the Baltimore, Washington and Philadelphia metro areas. The Charlottesville, VA based firm, which also currently services customers in the Richmond area, said it recently raised $1.2 billion in new capital that helped fund this expansion. The company will also establish convenient pickup locations in each market and upgrade its website, which they believe will accelerate the “personalization of the shopping experience beginning with a customer’s initial visit to the site.” According to Zach Buckner, CEO, “Relay Foods is designed to efficiently serve a range of customers – from professionals and parents managing households, to people who care deeply about access to farm-to-table produce and the finest artisan foods, and of course, like to avoid the crowds and hassles of today’s grocery retail environment. We are proud now to offer even more products from the region’s most socially and environmentally responsible farms and artisan food vendors.”…Baltimore based McCormick & Company has opened its first retail store called McCormick World of Flavors. The new 3,800 square foot entity is located on the first floor of the Light Street Pavilion at Harborplace at Baltimore’s Inner Harbor, very close to the original McCormick plant and headquarters that stood at414 Light Street. “The opening of McCormick World of Flavors is an exciting new way to connect with millions of people who love food and flavor,” said Alan Wilson, McCormick chairman, president and CEO. “Visitors will have the opportunity to interact with many of our brands from around the world as we showcase how we bring flavor to their lives each and every day. Having a retail destination in theBaltimoreInnerHarborbrings us back to our roots, offers visitors a chance to have fun, learn and engage.”…Redner’s announced just before presstime that it has signed a lease to build another new store in Dover, DE. This unit will be 48,500 square feet in size and will be located in the Greentree Shopping Center. It is tentatively slated to open next summer and joins other First State Redner’s Warehouse Markets in North Dover, Milford(opened last month) and Camden (to open later this year). The Reading, PA regional chain should also hear soon whether its suit against the landlord at its Joppatowne (MD) Plaza unit was successful. The owner of the shopping center is mega-landlord the Cordish Cos. (which controls the PowerPlant in Baltimore and the new “Maryland Live!” casino in Arundel Mills). Redner’s claims that Cordish’s allowance to let an Amish Market operate in the same center violates its lease, which prohibits competing grocery businesses from operating in the same shopping center. Cordish claims that an exemption in the lease allows for “ethnic markets.” It’s the interpretation of the language that’s the issue. A seven day bench trial concluded in August and a verdict could be issued in a couple of months. Between ethnic markets, dollar stores and specialty retailers that also sell food, the intrusion of “alternate food sellers” in shopping centers is becoming a thorny and painful issue to a growing list of traditional food retailers…a tip of the hat to CEO Michael Bozzuto and the gang from Cheshire, CT for their unbelievable caring and sensitivity to one of their associates. Rick Herrmann, the wholesaler’s south region director, was forced to take a leave of absence because of a medical problem more than a year ago. For a while it looked like Rick might not survive his illness, or at the least, would not be able to return to work. Through a medical miracle, Rick’s health has improved to the point that he was able to return to work last month. And here’s what’s really special: Bozzuto’s kept him on the payroll throughout his long ordeal and when he was ready to return, welcomed him with open arms to the same job that he had when he was forced to leave… I’m still in disbelief about the passing of Weis Markets VP Bruno Garisto, who died unexpectedly on August 10. Bruno was truly one of the shining lights of our business – exceptionally intelligent, extremely hard working and possessing excellent people skills – a rare triple play in any business. An autopsy revealed that Bruno died from the effects of contracting a rare Hantavirus during a recent vacation to Yosemite National Park inC alifornia, and at the age of 45, leaves this earth way too young with so much left to offer. He leaves behind his wife Carolyn and two children, and our hearts go out to them. When I reflect on how difficult and unfair life can sometimes be, it reinforces my belief that this is not a dress rehearsal; we only go around one time – so we all need to be sure we enjoy it. I’m very despondent to report another death, this one more expected, but nonetheless very sad. Al Dobbin, retired senior VP-operations for Giant/Landover, passed away on August 15. Al had been ill with Alzheimer’s disease for several years. But still his passing hit me hard because I considered Al to be one of my mentors. When Dick Bestany and I moved here in 1978, Al served as Izzy Cohen’s first lieutenant and right hand man. Not only was Al a true gentleman, he took the time to teach me about the new marketing area we would be covering and how the trade operated. During the course of many meetings, he explained in detail the uniqueness of the Giant culture and, most importantly, he reinforced the importance of being a professional and treating everyone with respect. A beloved man at Giant, where he worked for more than 40 years, Al Dobbin was respected by everybody who had the privilege of knowing him. I’ll miss his humility, his wit and his sense of fairness…and just before presstime, we learned of several key executive changes at the “new” Supervalu. Kevin Holt, who joined Supervalu this past May as EVP-retail operations, has taken on an expanded role as president of Supervalu Retail. In this position, Holt will drive the overall strategy for the company’s traditional retail and pharmacy divisions, including overseeing the marketing and merchandising functions. As part of this change, EVP-chief marketing officer and chief marketing officer Michael Moore will now report to Holt, as will Tim Lowe, who has been promoted to EVP-merchandising. Lowe, who was president of Shoppers, was named senior VP-merchandising in May. In addition, Janel Haugarth will no longer be heading Supervalu’s retail and wholesale operations. Instead, the 35 year Supervalu veteran has accepted the newly created position of EVP-business optimization and process improvement. She will be responsible for identifying and executing strategies designed to make Supervalu a more streamlined, effective organization. With Haugarth’s full-time focus on enterprise-wide optimization, the company will consolidate logistics and procurement leadership under Fred Boehler, who will now report directly to CEO Wayne Sales as the SVP-supply chain. “We are moving quickly to reinvigorate Supervalu and that starts with leadership,” said Sales. “The changes I have made to my executive team are designed to address two of our most immediate priorities: driving profitable sales in our retail stores and taking costs out of the business. These efforts are critical to our successful turnaround. The team we have in place includes exceptional leaders whose combined experience will help lead us through the revitalization of our business,” said Sales. “I believe this new leadership alignment will allow us to act quickly, efficiently and effectively to drive the successful turnaround of Supervalu.”