While UNFI’s purchase does give it the potential to be the country’s first full-service conventional, organics and specialty wholesaler there are significant challenges for the company which acquired a distributor larger that itself while dealing with a new or differentiated customer base of independent retailers. UNFI’s debt alone is large and its recent earnings report where sales were 10.7 up but earnings tumbled 15.6 percent hopefully won’t be an indicator of things to come. In the meantime, the deal has come under criticism by financial analysts and UNFI’s shares have plummeted from $41.58 per share on July 24 (the day before the acquisition was announced) to $21.13 per share on November 5.
In matters related to other corporate stores besides the Shop ‘n Save/Martin’s deal, nearly 50 corporate stores have been sold thus far, most of which were dealt prior to the consummation of the UNFI purchase. Earlier this year, 24 of 38 Farm Fresh stores were sold and 19 of 36 St. Louis area Shop’ n Save units were purchased by Schnuck’s. The company is actively shopping 46 Shoppers Food & Pharmacy that remain open.
Giant Food (Landover), Safeway and Harris Teeter are reported to be actively bidding on some of those sites. In fact, the Landover, MD-based unit of Ahold Delhaize has acquired three closed Shoppers units in Olney, MD, Alexandria, VA and Herndon, VA, stores that they will relocate to from existing Giant facilities. The Herndon unit opened on November 9, the Alexandria supermarket opens on November 16 and the Olney $21 million remodeling is expected to be completed next spring.
Additionally, the company’s largest retail unit – Cub Foods – is hopeful of finding one buyer for all of its 78 stores which are primarily located in Minnesota. One emerging Twin Cities retailer, HyVee, which has opened 10 units in the market since its debut in 2015, said it is not interested in those Cub stores.
As for the five stores that Giant/Martin’s will acquire (the deal should close during the first quarter of 2019), company president Nick Bertram said: “This acquisition demonstrates our continued commitment to the long-term growth strategy we announced earlier this year. Our Martin’s associates have proudly served many of these communities for years, and we look forward to expanding the Martin’s brand along the Interstate 81 Corridor and within the Eastern Panhandle of West Virginia.”