Six weeks ago, Ahold Delhaize chief executive Frans Muller said that new acquisition opportunities would be something the Dutch retailer is open to. On January 4, the company made its biggest supermarket deal since the 2016 merger between Ahold and Delhaize when it agreed to acquire King Kullen’s 37 Long Island stores.
Speaking at Ahold Delhaize’s Capital Markets Day in Manhattan on November 13, Muller noted, “We worked very hard for two years on integration. Now is the time to take us to the next phase of growth and market share gain. Our commitment is to self-fund the investments needed to drive growth, as our new cost savings program will allow us to maintain a stable group margin through 2019. This will allow us to invest in our stores, omnichannel offering and technology, while we explore and seize new leadership opportunities in existing and adjacent markets.”
The King Kullen purchase is certainly an “in-market” deal for the Northeast’s largest retailer and the newly acquired units will be operated by the company’s Stop & Shop brand. Included in the deal are King Kullen’s 32 supermarkets, five Wild by Nature natural/organic stores and the use of its corporate offices located in Bethpage, NY. The acquisition is currently expected to close during the first quarter of 2019, subject to customary closing conditions. Financial terms of the deal were not disclosed.
Stop & Shop is the current share of market leader on Long Island (Nassau and Suffolk counties) with 51 stores and an estimated all channel share of 21 percent, according to Food World’s data. Additionally, it intends to spend approximately $150 million on upgrading its existing stores on the Island.
King Kullen’s current market share is estimated to be 5.6 percent of the large $10 billion retail food and drug market. It is the fifth largest retailer in the two-county market.