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2016’s Top 10 Stories Of The West

year-in-review-2016

Last updated on November 30th, 2016 at 02:32 pm

2016’s Top 10 Stories

New formats, new top executives and new store ownership were at the center of most of the biggest stories of the year in the West.

A number of Kroger banners, in particular, saw leadership changes this year; Kroger also got in on the format experimentation with a rebranded store in Washington State. Several companies gained existing stores from Haggen’s demise, and new stores opened from Aldi, Whole Foods Market (its new 365 banner among them), Fry’s and many others. Many stores tout their local (and affordable) products; numerous prepared food choices and places to dine inside the store; and healthy/organic/natural options across the store. And competition shows no sign of letting up.

1. Executive changes abound

The year saw numerous top-executive changes at grocery companies in the West.

Pete Van Helden
Pete Van Helden

Pete Van Helden was elevated to CEO and president of Stater Bros. Markets in San Bernardino, California, on Jan. 4, having formerly served as president and COO. Jack H. Brown, who previously held the CEO title, became executive chairman of Stater Bros., which celebrated its 80th anniversary in 2016. (Brown died on Nov. 13, after the writing of this report.)

At Portland, Oregon-based Fred Meyer, Lynn Gust retired Jan. 31 after nearly 30 years with the company and was succeeded by Jeff Burt, who previously led parent company Kroger’s Central Division operating stores in Indiana and Illinois.

Kenny Kimball was named president of Smith’s Food & Drug in Salt Lake City, Utah—another Kroger subsidiary—effective April 30. Kimball succeeded Jay Cummins, who retired. Kimball started his career at Smith’s in 1984.

QFC, a Kroger banner that’s based in the Seattle area, saw President Dennis Gibson relocate to the company’s King Soopers Division in Denver, Colorado, on July 1. A month later, Pam Matthews, who had served as VP of operations for Kroger’s Delta Division in Memphis, Tennessee, became president of QFC.

Donna Giordano retired as president of Ralphs Grocery Co. in Southern California on July 23 following 44 years of company service. Valerie Jabbar, who had served as VP of merchandising for the Kroger-owned chain, was promoted to the top spot.

Karl Schroeder, former top executive of the Northern California Division of Safeway who most recently served as SVP of corporate merchandising for Albertsons after Albertsons acquired Safeway, was named to lead the Albertsons-Safeway Division in Seattle in late summer. Schroeder succeeded Dan Valenzuela, who moved to the East Coast to lead the company’s Maryland-based Eastern Division.

2. Haggen retrenchment completed

Haggen, the Pacific Northwest grocery chain that multiplied its store holdings and geographic reach by purchasing 146 stores divested as part of Albertsons’ purchase of Safeway in December 2014, filed for Chapter 11 bankruptcy protection in September 2015, and most of its stores were auctioned off before the end of 2015. Thus, 2016 was a year that saw other operators “digest” those stores.

Smart & Final added 33 lease locations in Southern and Central California that it finished converting to its Smart & Final Extra! concept by mid-May. The Los Angeles-based company expects to end 2016 with a total of 254 stores.

Albertsons LLC also got 33 locations—in Arizona, California, Nevada, Oregon and Washington—including 15 of Haggen’s core stores in Washington and Oregon that now operate as a stand-alone business unit of Albertsons. Another 14 of the stores became part of the Albertsons, Vons and Pavilions Division in Southern California, which Albertsons actually had owned prior to its merger with Safeway.

Gelson’s Markets added eight stores to its existing 18. Phoenix-based Sprouts Farmers Market bought three stores in California and one in Las Vegas; Tawa Inc., which does business as 99 Ranch Market, bought two stores in California and one in Oregon; and Carnival Supermarkets bought two California stores.

Single stores in California were purchased by: Tustin Safe LLC, Tustin; Regency Centers LP, Woodland Hills; Balboa Retail LLC, Lomita; Donahue Schreiber Realty Group, Camarillo; Stater Bros. Markets, Simi Valley; SB Grocery LLC (Roxy’s Market), Santa Barbara; RJS Investment Group, Poway; and Good Food Holdings (Bristol Farms), San Diego.

Yoke’s Foods Inc. purchased one store in Washington, at N. Liberty Lake Road in Liberty Lake.

3. Kroger opens first Main & Vine format store

In Gig Harbor, Washington, The Kroger Co. converted a former QFC store to its new Main & Vine concept, which has as its slogan, “Where eating is healthy, affordable and fun!” The store had its grand opening on Feb. 3, according to Tacoma’s The News Tribune, which said the 27,000-s.f. store features an open floor plan and several dining and takeout food areas. The store director, Dann Kohl, told the paper in March that the store had become a popular place for Friday date nights.

A June article in the Cincinnati Business Courier cited Kroger CEO Rodney McMullen as saying that the company was still in the learning phase with Main & Vine and thus has not decided about expansion of the concept. The store has an “events center” in the heart of the store, where cooking demos and food tastings are featured.

4. Walmart closes 154 U.S. stores, buys Jet.com

A dozen stores in the West were among those shuttered by the Arkansas-based retail giant. On Jan. 15, it said it would close 269 stores globally, 154 of them in the U.S. The U.S. closings included 102 of the retailer’s smallest-format stores, Walmart Express, which it launched in 2011. Stores that closed in the West included four traditional Walmart discount stores in California (San Jose, Long Beach, Oakland, Los Angeles); a Supercenter on Nellis Boulevard in Las Vegas; five Neighborhood Markets in California (Altadena, Bell Gardens, Los Angeles, San Bernardino, Hawaiian Gardens) and two Neighborhood Markets in Oregon (Portland, Lake Oswego).

Walmart said at the time that it would instead focus on its Supercenters, Neighborhood Markets and growing its e-commerce business as well as expanding pickup services for customers. On the e-commerce front, Walmart closed on its purchase of Jet.com in August to help expand its customer reach and its capabilities in that arena.

5. Fry’s invests millions in Arizona

Fry’s Food Stores planned to expand its presence in Arizona with seven new stores in 2016, according to a March 4 announcement from the Tolleson, Arizona-based division of The Kroger Co. Fry’s planned to spend $260 million to build six new Marketplace stores in Maricopa County; one new Fry’s Food Store in Tucson; and fuel centers at those properties. Part of the capital was allocated to build additional fuel centers and complete store expansions and remodels. The chain said the projects would create more than 2,000 full- and part-time jobs.

Steve McKinney, president of Fry’s, said, “We’ve operated here since 1960. In that period, we’ve grown our footprint to 119 stores and 82 fuel centers. Fry’s successfully reached this point by closely monitoring the unique needs of this market and evolving to meet the requests of our customers.”

Fry’s Marketplace units, which opened in summer and fall, were located in Mesa, Phoenix (a replacement store on Bell Road), Litchfield Park, Chandler, Peoria and Phoenix (Dove Valley Road). The new Fry’s in Tucson is at 1795 W. Valencia Road.

6. Aldi makes long-awaited debut in California

6-aldiGerman-born discount grocery format Aldi opened its first locations in Southern California on March 24. The eight stores were just the beginning of a busy year for Aldi, as it prepared to roll out approximately 45 stores and employ more than 1,100 people in Southern California by the end of 2016. A second wave of 10 stores opened in Los Angeles and Orange counties on April 21, and a third wave of seven stores opened May 19. Aldi built a distribution center in Moreno Valley to supply the stores.

“Ever since we announced our plan to bring Aldi to Southern California, the positive response from people across the Southland has been overwhelming, and we’re excited to start opening stores next month and throughout the year,” said Gordon Nesbit, Moreno Valley Division VP for Aldi, in a Feb. 23 statement. “There is a strong appetite among Southern Californians for an alternative place to shop, and we are eager to show them the significant benefits that can come from shopping at Aldi, both for their wallets and lifestyles.”

The discount chain is known for its Aldi exclusive brand products. In California, the stores feature a large selection of local favorites, including California-sourced wine and produce. The new stores also incorporate a variety of sustainable initiatives, including energy-efficient and green-building design, according to Aldi.

The California stores are part of the company’s five-year strategic plan to open 650 new stores across the nation. By the end of 2018, the grocer expects to operate nearly 2,000 stores.

7. First 365 by Whole Foods Market debuts in L.A.

The first 365 by Whole Foods Market opened in the Silver Lake neighborhood of Los Angeles on May 25, in a former Ralphs store.

7-365-grandopeningWhole Foods Market describes the 365 concept as providing “simple, affordable and convenient everyday shopping without sacrificing the quality standards and dedication to food transparency that Whole Foods Market pioneered. 365 by Whole Foods Market features a thoughtful product selection curated for convenience, including the 365 Everyday Value brand customers know and love, alongside other high-quality brands and new offerings from innovative supplier partners.”

The 28,000-s.f. Silver Lake store, at 2520 Glendale Boulevard, offers grocery items, meat, produce, dairy and dairy alternatives, beer and wine, body care products and prepared foods.

The other two 365 by Whole Foods Market stores planned to open in 2016 also are in the West: Lake Oswego, Oregon, which opened July 14, and Bellevue, Washington, which opened Sept. 14. As many as 10 more 365 stores are expected to open in 2017.

8. Save Mart changes corporate name, reveals new logo

Save Mart Supermarkets changed its corporate name to The Save Mart Companies as of June 20. The corporation includes Save Mart, Lucky, Lucky California, FoodMaxx, S-Mart and MaxxValue banner stores. According to the company, besides providing a clear ­distinction between its Save Mart stores and the parent company, The Save Mart Cos. name “better represents the collective strength of the corporate entity.”

8-save-mart-logo_medium_color_rgbAfter a months-long makeover, Save Mart on Sept. 7 debuted a fresh look at its South Tracy Boulevard store in Tracy, California, including its new Save Mart logo. The makeover added features geared toward convenience and service, according to the company. This is the second store under the Save Mart brand that has the modern elements envisioned for the rest of the chain, comprising 205 stores.

“I was born and raised in Tracy. I’m excited that we’re making such a big investment in the community where both the company and I have strong ties,” said Steve Junqueiro, co-president and COO of The Save Mart Cos. “We’re bringing the best of what Save Mart has to offer, and shoppers will see a noticeable difference.”

9. Legislative highs in West states

Oregon now has the highest minimum wage of any state in the nation, and California raised its tobacco sales age to 21, only the second state to do so (Hawaii was the first).

On March 2, Oregon’s Gov. Kate Brown enacted a tiered minimum wage system that sets different hourly rates in different parts of the state. By 2022, the minimum wage will be $14.75 per hour in Portland’s urban growth boundary, $13.50 in midsize counties and $12.50 in rural areas. According to Fortune Magazine, even that lowest rate—$12.50 per hour—is higher that any other existing or planned minimum wage for a state or the District of Columbia. D.C.’s minimum wage increase to $11.50 that occurred in July comes the closest.

The first in the series of hikes leading up to Oregon’s groundbreaking pay levels started in July. The state’s current minimum wage is $9.25.

“I’m proud to sign into law my top priority of the 2016 legislative session—raising the minimum wage,” Brown said. “Today we can say Oregonians are truly better off. SB 1532 is a path forward—so working families can catch up, and businesses have time to plan for the increase. That’s the Oregon Way.”

On May 4, California’s Gov. Jerry Brown signed a bill that raised the tobacco sales age in the state from 18 to 21. The lawful age for buying tobacco products, including e-cigarettes, became 21 as of June 9. Military personnel are excluded from the purchase age change, part of a compromise that helped the bill move toward passage. Those in favor of the bill say it will help keep adolescents from starting smoking and diminish the number of adult smokers.

10. Klug pursues a new career

Sue Klug, a well-known woman executive in the Southern California grocery industry for many years, left the food industry this summer to join Republic Services, a recycling/waste company based in Scottsdale, Arizona, as EVP/CMO.

Klug concluded her time in Southern California on July 29 as EVP/CMO for Unified Grocers in Commerce, California, which she had joined in late 2012. Klug began her grocery career working for Vons when she was in her early 20s; she is now in her mid-50s. Prior to joining Unified, she served as president of the Southern California Division of Supervalu’s Albertsons Division for five years. Before that, she served as SVP of sales and merchandising for Albertsons/Supervalu for two years. Her background also included positions with Catalina Marketing and Lucky Stores.

Klug has been recognized numerous times for her accomplishments within the grocery industry and contributions to women’s organizations, as well as to the Cystic Fibrosis Foundation (her daughter, Shelby, had CF until a double lung transplant late last year). Klug also served as president and chair of the Western Association of Food Chains—the first woman to hold the position. She was The Shelby Report of the West’s Woman Executive of the Year in 2014.

A look ahead

2017’s Top 10 Food Trends

Sterling-Rice Group (SRG) has identified its top 10 culinary trends that it says will stand out on restaurant menus, expand onto grocery shelves and attract consumer attention across the U.S. in 2017.

top10trendsBroad and growing interest in wellness and the environment, as well as a strong desire to connect with international cultures, continue to be significant key factors influencing the way U.S. consumers eat and drink. In 2017, chefs and foodies alike—seeking authenticity—will be inspired by ancient wellness philosophies and traditional cooking methods to create new and exciting menu items and elevated dining experiences.

These culinary trends are expected to expand and grow next year as they move from cutting edge to mainstream:

1. Wake and Cake: Have your cake and eat it…for breakfast? With recent science and research endorsing this diet strategy, in the year ahead SRG expects more people to partake in this decadent post-breakfast trend.

2. Dosha Dining: Long recommended as medicine by Siddha doctors (traditional Indian physicians), turmeric came into the spotlight in 2016 boasting its mega-health benefits and savory flavor. With sustained interest in food as medicine, consumers will take a deeper dive into the ancient practice of Ayurveda and eat for their doshas.

3. Plant Butchery: Meat substitutes have graduated from seitan and soy with new options made from chickpeas, legumes and fungi. Mock meats are popping up in their own butcher-style storefronts, enticing a new generation to consider Meatless Monday, Tuesday, Wednesday…

4. Food Waste Frenzy: With approximately 40 percent of food in the U.S. going to waste, restaurants and innovative food companies will increasingly serve up delicious food options using the whole fruit and vegetable—from seeds to rinds.

5. Snackin’ Sardines: In 2017, consumers will fish for more protein-rich snacks. High in omega-3s, protein and umami flavoring, sardines will move to the forefront as an uncomplicated yet elegant addition to any snacking ­situation.

6. Noodle on This: Noodle lovers who have long embraced Thai pad see ew, Vietnamese pho and fresh Japanese ramen are rediscovering Chinese lamian—or hand-pulled noodles—for both their taste and entertainment value. Watching a master noodle-smith knead, stretch and swing dough into strands for soup will be a new experience for eaters who not only enjoy good food, but also a good show.

7. Mocktail Mixology: From non-alcoholic happy hours to standalone mocktail menus, beverages are being positioned as “intricate and unique experiences that can be had without the hangover.”

8. Goat! Get It: Low in calories, fat and cholesterol, goat is poised to become the next go-to protein in 2017. A great foundation for spicy and sour preparations, look for restaurants to feature goat in dishes, such as empanadas and lasagna.

9. Cook and Connect: Chefs, home cooks and foodies are taking advantage of the sharing economy and coming together in a big and innovative way—from communal pizza ovens and outdoor kitchens to the fleet-farming movement.

10. Migratory Meals: All over the world people are moving; some by choice, others under duress. By celebrating their rich heritages and cuisines, large refugee populations are beginning to make culinary connections with their new home countries.

SRG’s Culinary Trends 2017 report was compiled by an in-house culinary team and SRG’s Culinary Council, a team of more than 175 famous chefs, restaurateurs and foodies.

*Editor’s note: The regional Year in Reviews appear in the December print editions of The Shelby Report.

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