What a difference a year can make. Or not.
Twelve months ago in our annual Retail Market Study, I predicted “more of the same.” More overstoring, more consumer economic worries and more progress for those retailers who were perceived to be price/value disrupters.
Actually, it wasn’t a very difficult prediction that in previous years. Except for the COVID era, these market realities have existed for the past decade. But the longer that Mid-Atlantic gridlock persists, the more challenging it’s going to be for the retailers that can’t separate themselves from the rest of the pack. And at some point in the near term, some merchants will look to close more stores, reduce jobs, or withdraw from the market altogether.
Based on the factors listed in the first paragraph of this story, it wasn’t a great year for any retailer. But it was a good one for several including Walmart, Costco, Trader Joe’s, and Aldi. Of that group, only Trader Joe’s and Aldi opened new stores in the Mid-Atlantic region over the past 12 months (see gridlock). The gains made by all of those merchants were primarily achieved by cementing the price/value connection with their customers.
Of course, diversification, fierce competition, and overstoring aren’t the only reasons that retailers have slowed expansion in recent years. Real estate continues to be both scarce and expensive. And the average cost to build a 60,000 square foot supermarket today runs somewhere north of $30 million – it’s no wonder that most retailers are prioritizing remodeling their stores rather than gambling on building new units.
Looking forward to next year, I believe conditions will be even tighter. Fear of recession is greater than 12 months ago. And with the direction of tariffs unclear, retailers don’t view higher prices (whatever they may be) as a good thing. SNAP benefits could take a hit in the next year, too, and then there’s this remaining gridlock/overstoring situation to contend with.
Here’s my annual analysis of some of the largest retailers in the $123 billion 70-county Food Trade News marketing area.
ShopRite – There was a period shortly after the worst of COVID ended when the perennial leader of the Metro New York and Delaware Valley markets wasn’t operating on all cylinders. There were pronounced disagreements among some of parent firm Wakefern’s membership (leaked to us). Moreover, the company’s once great management team was showing the wear and tear that comes with age. The change wasn’t profound and there wasn’t enough internal disruption to significantly affect the dominance of the retail network that began in 1946. Fast forward to today – the performance of ShopRite’s stores from Connecticut to Maryland remains dominant, with solid comp store sales and its continuance of adding, replacing and remodeling stores is well above the industry norm, especially for supermarkets. And there’s another chapter of the book that needs to be told. Part of the improvement at Wakefern can be largely attributed to Mike Stigers, who was named president 25 months ago. First, it’s never easy to replace a legend – and former president and COO Joe Sheridan was just that: an iconic leader who helped shape virtually every aspect of the Keasbey, NJ-based company for 48 years, 15 as its day-to-day top dog. What Stigers has done in two years is remarkable. His laid-back, humble style, off-the-chart skills, and deep knowledge of the grocery industry have made him extremely popular among Wakefern’s 45 members as well as with the co-op’s associates. Strategically, he moved the company in a new direction with the purchase of Di Bruno Bros. last year and we hear that another major independent group might be joining or selling to Wakefern soon. In a marketing environment where so many merchants are struggling, ShopRite/Wakefern is booming!
Stop & Shop (New York Metro Div.) – Ouch! The rubber really hit the road over the last 12 months for the now third largest retailer in the region. Radical surgery was performed late last year when the once largest Ahold Delhaize USA brand (now second in size to Food Lion) closed 23 stores in the market (32 overall) and vowed to return to its glory form of decades ago. In order for that to happen, more store surgery is needed as well as significantly increased cap-ex to modernize its supermarket fleet. An upgrade in morale is needed, too. That job now belongs to company veteran executive Roger Wheeler, who was named president of Stoppie when the talented but hamstrung Gordon Reid retired. Closing stores was actually the right move, but more units need to be shuttered. The problems of Stop & Shop go back further than Wheeler, Reid or former president Mark McGown (now at C&S). The deadly combo of “profit milking” and not enough capital investment made this one-time retail gem lack its former luster for too long. The company’s locations are still very good (stronger in New England than metro New York), but the bigger issue reminds me of a Carole King verse (in question form) – (Is It) “Too Late Baby?”
The Giant Company – Solid, but far from spectacular year for the Ahold Delhaize USA non-union brand. TGC experienced the same competitive roadblocks that most other traditional supermarket operators faced – protecting market share from discounters Walmart, Aldi and few other small box discount or specialty merchants in an economically challenging environment. During the year it opened the last of its currently planned Center City stores on S. Broad Street and closed a smaller Heirloom Market on Market Street in Philly. Thus far, the “Center City expansion” has been less than stellar. However, in its core Central PA market as well as in the Lehigh Valley and the counties surrounding Philadelphia, The Giant Co. still rocks. President John Ruane remains one of the steadiest hands in the business and the promotion of Rebecca “Swiss Army Knife” Lupfer to chief merchant was an excellent move.
Acme Markets (Kings/Balducci’s/Safeway) – Perhaps now that the Kroger-Albertsons merger soap opera has ended (except for the ensuing FU litigation), perhaps Albertsons can re-focus (and re-spend) on its stores. New CEO Susan Morris is certainly better connected to the culture and much more store knowledgeable than c-suite “all-star” Vivek Sankaran was. But will Albertsons/Acme actually spend the money needed to improve store conditions and lower everyday pricing? Like some other large supermarket chains, despite its strong market share and excellent locations in the Delaware Valley and on the Jesey Shore, Albertsons/Acme is stuck in the “mushy middle,” which makes it vulnerable to the likes of Walmart, Aldi and Lidl. And when it has to battle against ShopRite (especially in Central and Northern New Jersey), the outcome is often lopsided. I consider Mid-Atlantic president Tom Lofland extremely savvy and very aware of the realities of the markets in which he oversees. Much like his predecessor Jim Perkins, the question remains as to whether the Albertsons corporate leadership team, its board of directors, and its greedy institutional shareholders will give him the resources needed to compete more effectively.
Walmart – Two months ago, Walmart CEO Doug McMillan simplified his belief that, during difficult economic times, consumers will look to Walmart for lower prices. At the company’s annual community meeting in Dallas, he said: “Price leadership drives our business.” And so it goes. Another year of no new store openings, but in “gridlock city” that hardly mattered. Strong comp sales anchored by low prices and a continued focus on improving store conditions (cleaner units with fewer out-of-stocks) helped Walmart sell more stuff than it did a year ago. At some point in the next few years, its stores in the Mid-Atlantic market will receive the cap-ex needed to remodel older units as well to build new locations, most likely SuperCenters (if it can find the real estate), now that the company has re-committed to improving its brick-and-mortar foundation. There could be a few bumps along the road (tariffs, SNAP cuts), but nobody on the entire planet is better positioned than the “Behemoth.”
Weis Markets – Another solid year for the Sunbury, PA-based regional chain. Comp store sales were not as good as a few years ago, but given the economic and competitive environment, Weis remained in the groove. The biggest internal news of the year came last October when COO Kurt Schertle left. His friend and former teammate at Shoppers Food, Bob Gleeson, chief merchant at Weis, was elevated to chief operating officer while maintaining his role as head of all marketing and merchandising. Weis has been way above the supermarket industry average in terms of new store openings, with five new planned in the next 18 months – four in Maryland and another in Middletown, DE, which would make it the merchant’s first store in the First State. Before that, it opened its newest unit in New Market, MD on June 19. Weis will never be the biggest or the flashiest retailer in town, but it knows how to run a conventional supermarket and make money.
Wawa – Once again, one of the best performers in the entire retail market study with 18 new stores and solid comp store gains. The Wawa, PA-based merchant continues to produce the highest per store volumes (excluding gas) of any convenience store operator in the region (and likely the country). It also continues to push the expansion envelope, opening three new c-stores in Central PA, the domain of convenience store dynamo Sheetz. However, its ambitions go further than Dauphin County – in the last 12 months it debuted locations in Alabama, Georgia, Indiana, Kentucky, North Carolina and Ohio. Over the next year, it will also enter new states West Virginia and Tennessee, while continuing to add stores in its core markets – New Jersey, Pennsylvania, Delaware, Maryland and Virginia.
Wegmans – I’m repeating part of my analysis from last year because I think it still holds true: a very solid year for the Rochester, NY-based uber-merchant despite an economy that could make one think that the family-owned retailer might be vulnerable. During our measuring period, the upscale merchant opened one unit in late March in Lake Grove, NY, its first store on Long Island (and it’s doing extremely well). Another new mega-unit will debut on July 26 in Norwalk, CT, its Nutmeg State debut, and the battle between that store and Stew Leonard’s flagship location less than 4 miles away should be titanic. For this year, comps were solid, and Wegmans continued to overcome some (but not all) of the labor staffing, retention, and morale issues that other retailers are facing at store level A hidden part of Wegmans’ success is its site planning and demographics research. While all economic strata have been impacted by the uncertain economic conditions, the company’s great (and very, very expensive) store locations – in addition to size, selection, overall product mix and execution – have protected it against major slumps. When you’re averaging more than $80 million per store in sales annually, you are doing a lot of things right.
New York Metro Independents (Allegiance Retail Services, Associated Supermarket Group, General Trading, Key Food, Krasdale Foods) – The competitiveness of the independent retailers and those marketing groups and wholesalers that supervise them is akin to a WWE death match (without the weapons, mostly). It’s a subculture that’s difficult to understand unless you’re in it. Folks like Dean Janeway Jr and George Knobloch (Key Food), Gus Lebiak and Dennis Hickey (Krasdale), Joe Garcia and Zulema Wiscovitch (ASG) Joe Fantozzi, Samer Rahman and Donna Zambo (Allegiance), and Jonathan Abad (General Trading) understand the street rules very well. But knowledge and experience only get you so far – serving and supplying the smaller supermarkets, superettes, bodegas and greengrocers that abound in the five boroughs of New York City is uniquely difficult. Over the past year in NYC, Key Food continued to lead the pack by a narrow margin against Krasdale. Each of those players supply hundreds of independents which are a story to themselves. They are mostly Hispanic (of which there are multiple sub-groups), some Koreans and a mix of several other ethnicities. Many of the groups have large inter-connected families who own multiple locations, not only in New York City, but also in other parts of the region and in North Carolina and Florida, too. It’s a tough environment in which to operate, but most of these smaller retailers aren’t just entrepreneurs they have an important other mission – to provide a shopping opportunity for their customers who often live in economically challenged areas.
Amazon Grocery – A tale of two banners – Whole Foods (WFM) continues to chug along at a high level (although not quite as high as before COVID) and Amazon Fresh (AF) still needs to go back to school to educate itself on the improvements that are necessary for it to become a “go to” retailer. It’s strange that the parent company now has internally connected all of its grocery entities yet can’t seem to implement most of the good stuff that WFM features into its AF model. The intangible advantage that WFM (and others like Trader Joe’s and Sprouts) have is that its vibe of retailing aligns well with millennials and Gen X, Y and Zers. As for Amazon Fresh, to be fair, it has improved. The newer generation stores that opened in the past year in Eatontown, NJ; Bensalem, PA; Langhorne, PA; Willow Grove, PA; East Setauket, NY; and Plainview, NY are significantly better than their first-generation counterparts. But even those larger stores aren’t close to offering customers the full experience they desire. The new stores have some price, selection and merchandising mojo, just not enough. At the end of the day, the most successful retailers stand for something. AF stores aren’t there yet.
Aldi – If we could award a “best in class – small store division” trophy, Aldi would win. Its model is not for all shoppers and it’s still tough to buy one’s total weekly purchases in a footprint that’s typically smaller than 25,000 square feet, but for what it is, Aldi scores very highly. There’s enough product diversity to fill most of one’s shopping cart and its relationship with its private label vendors is strong, yielding high-quality products. If you’re Giant, Acme, Weis, Stop & Shop or even ShopRite, you already know that Aldi is an excellent “nibbler.” Unlike German discount competitor Lidl, Aldi stores are easy to shop and radiate that “connective vibe” that other discounters like Lidl, Amazon Fresh and Grocery Outlet lack. Their decade-long record of success rivals Walmart (only in the small store division), so it’s no wonder that Aldi is poised to open 800 new stores nationally (about 15 in the Mid-Atlantic) in the next 18 months. Strong management, excellent store design and in-store execution, and deep corporate pockets make Aldi a top-tier food retailing powerhouse for today and in the future.
Kickin’ Out The Jams: C&S Makes Bold Move With $1.77B Spartan Nash Acquisition
The renewal of the C&S-Key Food relationship is a huge deal in itself, but it’s already been a big year for C&S with the affirmation of its partnership with Southeastern Grocers (Winn-Dixie, Harveys), this time as an equity owner.
Additionally in May, the Keene, NH-based wholesaler announced a partnership with large produce distributor Atlantic Grocery Supply (AGS), to help “provide wholesale supply solutions to retailers in the Caribbean, and Central and South America.”
AGS is the grocery division of Pompano Beach, FL-based Sun Commodities Inc. In this agreement with C&S, export customers will be supplied with competitive pricing and a vast grocery assortment of more than 40,000 items.
The new partnership will operate out of C&S’s 1 million square foot distribution center in Miami – with C&S and AGS partnering in sales to Florida-based independent retail customers and AGS leading sales to export customers. The Sun Group will continue to service produce to retailers and food service customers throughout the Southeast of the United States and the Caribbean.
Then, just before presstime, came even bigger news: C&S will acquire SpartanNash (SN), the Byron Center, MI (near Grand Rapids) wholesaler/retailer for a purchase price of $26.90 per share of SN’s common stock in cash, a deal valued at $1.77 billion, including assumed net debt.
The transaction price represents a 52.5 percent premium over SN’s closing price on June 20, 2025, of $17.64, and a premium of 42 percent to its 30-day volume-weighted average stock price as of June 20, 2025.
Together, the combined company will operate almost 60 complementary distribution centers covering the U.S. (about 40 of those DCs are C&S depots). and will serve close to 10,000 independent retail locations, along with more than 200 corporate-run grocery stores including D&W Fresh Market (10 stores in Michigan) and Martin’s Super Markets (20 stores in Indiana and Michigan).
This is a big deal by any standard and it clearly reflects C&S’s continuing goal to change the long-held perception (by some) that the privately-held wholesaler’s primary strength (and legacy) is as a third-party distributor.
“Our industry is facing critical challenges, including rising fixed costs and slowing topline growth,” C&S CEO Eric Winn said in a company email. “Our integration is key to diversifying our capabilities and expanding our wholesale and retail geographic footprint to support long-term, sustainable success.”
SpartanNash president and chief executive Tony Sarsam (ex-CEO of Borden Dairy and Ready Pac), who joined the company in late 2020, has done a fine job of shoring up SN’s wholesale business while also expanding its corporate store retail network including the acquisition of 49-store Midwest regional chain Fresh Encounter (stores in Ohio, Indiana and Kentucky) late last year.
“We are energized by the opportunities this combination provides for our associates and customers. With our organizational values in close alignment, there will be exciting new career opportunities for our people and a continued commitment to a People First culture,” the 63-year-old leader said. “For our customers, this transaction creates the necessary scale, efficiency and purchasing power needed to enable independent retailers to compete more effectively with larger big box chains. “Neighborhood grocers are essential pillars of our communities that we want to preserve and strengthen. A thriving hometown grocery store supports local farmers, bolsters the local economy, and enhances the overall health and well-being of the community.”
SpartanNash has a limited presence in the Mid-Atlantic region. It operates two warehouses in Virginia – a conventional depot in Bluefield, VA and a military facility in Norfolk. In Severn, MD, it operates a 365,000 square foot DC which serves as both a military warehouse and a depot that supplies 22 Amazon Fresh stores in the region.
For C&S, the SpartanNash acquisition bolsters the company’s presence in the Midwest while also adding a team of experienced industry veterans who will strengthen C&S’s bench in both corporate retail and independent wholesale.
And beyond the momentum gained by C&S with the addition of Key Food, this deal also poses a real threat to UNFI’s Central Region’s business, one of its largest operating areas in the country.
‘Round The Trade
An enlightening interview with newly appointed Albertsons chief executive Susan Morris was published in the Wall Street Journal earlier this month. Morris, who began her career at the Boise, ID-based chain as a high-school student in the chain’s Denver division, demonstrated in the interview that she’ll be a lot more hands-on and energetic than her staid predecessor, Vivek Sankaran, who retired on May 1. Morris acknowledged that under her aegis, Albertsons will become “a little bit leaner” (there will be more store closings and likely more layoffs as the retailer seeks to save $1.5 billion over the next three years).
Morris will have a lot on her plate leading an $80 billion supermarket organization that is coming off a failed merger attempt with Kroger and which has a store base that desperately needs upgrading (even with many great locations). The ongoing litigation with Kroger is complicated and potentially distracting and Morris will be the Albertsons pilot when it comes to dealing with Wall Street, a new seat for her. For the year, Albertsons’ shares have been ticking upward a bit and closed at slightly below $22 per share as of June 26 (low for the past 52 weeks was $17 per share, high was $23.20). It won’t be easy and the potential to sell the company will always be on Albertsons’ horizon, but we like Susan Morris. Her combination of grit and grace is exactly what the retailer needs.
In Amazon news: Prime Days are coming and this year the extravaganza has been extended from two days to four (July 8-11). A new wrinkle this year is “Today’s Big Deals,” discounted deals to Amazon’s Prime Members that launch daily at midnight (Pacific Daylight Time) and will be available while supplies last.
And here’s part of an internal Amazon memo about AI that I’m betting Jassy wasn’t happy about when it was leaked and released: “We will need fewer people doing some of the jobs being done today, and more people doing other types of jobs. It’s hard to know exactly where this nets out over time. But in the next few years, we expect this will reduce our total corporate workforce and we get efficiency gains from using AI more extensively across the company.” While that statement isn’t shocking, to see it in print can’t be uplifting for associate morale current economic outlook.
Local Notes
June was a big month for store openings as Sprouts cut the ribbon on two perishables-driven units – in Woodbury, NJ and on Christopher Columbus Boulevard in Philly; Aldi also debuted two discount stores earlier this month on Staten Island and on Washington Avenue in Philly; and Grocery Outlet opened its stores in Deptford, NJ and Fairless Hills, PA. What do all those retailers have in common? None of them are traditional supermarkets and their footprints are all smaller than 30,000 square feet.
If you want to find a new supermarket that opened in June in the entire Mid-Atlantic region, you have to travel to Maryland where Weis opened a new 65,000 square foot in Lake Linganore (the company’s seventh store in Frederick County and the first of five Maryland and Delaware units it will open by the end of this year). Also opening in the Old Line state was Wegmans which opened its ninth Maryland unit in Rockville, an 80,000 square footer. Next month, Sprouts will debut in Montgomeryville, PA and Lidl will cut the ribbon on a long-delayed discount market in Bear, DE.
Wakefern announced that it has acquired an old Ollie’s Bargain Outlet in Waterbury, CT (the birthplace of the immortal Bill Grize who led Stop & Shop and Ahold USA for many years). The 34,000 square foot discount unit will open this fall.
We have an obit to report this month from our industry with the passing of Bob Spires, 71, former executive with Acme and Saker and Zallie ShopRites and husband of Judy, who recently retired from the grocery biz after serving as president of Acme Markets and Kings Food Markets. I knew Bob for many years and his kindness and generosity towards others was what made him special. A line is his published obituary really stood out: “…he was a humble man who provided a steady presence, always offering unwavering love, support and wisdom. In addition to Judy, he is survived by his son Rob and daughter in law Hayley and grandchild Sloane.
