Buoyed by boosts in their annual capital expenditure funding, two Ahold Delhaize USA (ADUSA) brands (divisions) – Giant/Martin’s and Stop & Shop – will open new store formats before the end of 2018.
Giant’s new entry, an urban small format store in Philadelphia – Giant Heirloom Market – will open in December while Stop & Shop debuted its new updated look earlier this month with 21 remodeled stores in the Hartford, CT market. Each brand will spend about $70 million in capital improvements in 2018.
To better understand the evolution of these moves, let’s review some history.
In December 2014, Ahold USA opened a new, perishables-driven small format store (3,700 square feet), Everything Fresh, on Walnut Street in Center City Philadelphia. The store was to serve as a laboratory for the big retailer’s recently formed small-format division.
Nine months later, that single store experiment expanded into bfresh, a 10,000 square foot unit that the company opened in another urban setting – Allston, MA.
Another bfresh store opened later in 2015 in tony Fairfield, CT and met with poor results closing within six months. When Ahold announced it was merging with Delhaize in June 2015, the focus on expanding its small-format division seemed to wane as the now even larger retail prioritized other initiatives.
In the past three years, new bfresh units have opened in Brighton, MA and Somerville, MA. The company also announced in mid-2016 that it had secured four locations in Philadelphia – Bainbridge Street, Chestnut Street (University City), South Street and North 2nd Street – and would build new small format units. Except those locations remained dormant as the small-format concept seemingly slipped further into oblivion.
In January 2018, Ahold Delhaize USA began its new decentralized structure giving the company’s brands autonomy over its stores. At Giant/Martin’s, that meant that newly installed president Nick Bertram would have responsibility for those unused sites (which Ahold Delhaize USA still controlled). The company said those stores were still being considered for small-format usage, but not under the bfresh banner.
On October 4, Giant announced that its location on Bainbridge Street would be converted to a new concept – Giant Heirloom Market – which is expected to open in December.
About 60 employees will be hired at the 9,500 square foot store which will include such unique features as a plant-based foods department, a produce chef and the option of mobile app driven scan & go (cashierless) checkout.
“As we celebrate our 95th anniversary, we can’t help thinking about the next chapter in Giant’s story,” said Bertram. “Philadelphia is a natural choice for us to debut our new Giant Heirloom Market format, as we’re able to draw upon our passion for food and our fondness for local purveyors, all while leveraging innovation to bring something special to our new Graduate Hospital neighbors.”
This will be Giant’s first Center City location, and as part of its ongoing commitment to fight hunger, the company donated $1 million to Philabundance, the Delaware Valley’s largest hunger relief organization.
“Our new Giant Heirloom Market is as unique and special as the neighborhood it serves, the direct result of our close collaboration with the local community it will soon be serving,” said Bertram. “From featuring products made locally to being staffed by people who call the neighborhood home, Giant Heirloom Market is a true reflection of the surrounding community, and we can’t wait to see our shared vision come to life in just a few short months.”
Giant noted that it listened locally, it searched nationally and globally for solutions, even going to Amsterdam ‐ a city known for its innovative, small grocery stores ‐ to find a format that would satisfy the community. Back home, Giant scoured Philadelphia for local purveyors who could help them deliver on the promise of a “neighborhood grocery store built by its neighbors.”
Asked whether Giant plans on opening its other three Philadelphia locations, a company spokesman said that decision will likely be based on the results of the Bainbridge St. store.
At Stop & Shop, the decision to spend significant capital on improving its supermarkets has been long overdue as new and existing competitors have captured share from the New England market leader for nearly a decade.
Following release of Ahold Delhaize’s second quarter earnings in August, new chief executive Frans Muller acknowledged that Stop & Shop sales were “challenged.” Muller vowed that his company would invest in upgrading stores at its largest and most profitable U.S. brand and would focus on “fresh meals, ready-made meals, ready-to-cook, ready-to-eat meal kits, different types of packaging sizes, healthier food. That’s all very much geared toward fresh formats across all the categories.”
The first phase of that upgrade – designed to “improve Stop & Shop’s in-store experience” – was unveiled earlier this month in 21 stores in one of the chain’s best markets – Hartford.
The results of the pilot program will be digested and then utilized to plan a company-wide upgrades across Stop & Shop’s more than 400 stores in New England and New York over the next several years. The new format also includes lower prices on thousands of items that customers buy most frequently, while also carrying a bigger assortment of affordable store-brand items, including products from Nature’s Promise.