2016’s Top 10 Stories
Mergers and acquisitions, new formats and executive changes were at the center of many of the biggest stories of the year in the Southeast.
Several supermarket companies based in the region found new ownership, including Food Lion, The Fresh Market and Louisiana’s LeBlanc’s Food Stores. Others, like Southeastern Grocers, began rolling out new store concepts, and big players such as Publix and Ingles found new leaders at their helms.
Needless to say, competition has spurred changes for the Southeast’s grocery industry in 2016 and, of course, that competition shows no signs of letting up as supermarkets prepare to embark on a new year.
1. East Coast grocers combine to create mega food retail company
Ahold and Delhaize first announced in June 2015 that they intended to merge to become one of the world’s largest food retail groups. The deal was completed in July 2016, and the combined company—called Ahold Delhaize—operates 22 local brands in 11 countries and has a combined workforce of more than 375,000 associates.
Prior to the merger, Delhaize operated approximately 180 Hannaford stores in New England and 1,100 Food Lion stores, primarily in the Southeast. The majority of Ahold USA’s holdings are in the Northeast, with some stores in Virginia.
A combined 86 stores were sold to satisfy Federal Trade Commission requirements; buyers included Publix, New Albertson’s Inc. (part of Albertsons Cos.), Weis Markets, Supervalu, Big Y, Tops Markets and Saubel’s Markets.
The first combined results of the new company will be presented for the third quarter of 2016 on Nov. 17 (after press time).
2. Tennessee grocers can sell wine—finally
After a years-long process, licensed food stores in Tennessee were able to sell wine in their stores beginning July 1.
Steven C. Smith, president and CEO of Abingdon, Virginia-based Food City, said then, “For years, countless Tennesseans have sought the same opportunity afforded their Virginia and Georgia friends and neighbors to purchase wine from their local supermarket. For the past eight years, legislators and retailers across the state have worked diligently to bring their plea to fruition—and today, we celebrate that victory alongside our loyal customers.”
Smith helped spearhead the “Red White and Food” campaign launched by the Tennessee Grocers & Convenience Store Association more than seven years ago, in support of a series of bills to bring wine sales to food retail stores in the state.
The wine in food retail stores referendum passed in all of the 78 eligible locations where it appeared on the ballot in the November 2015 Tennessee elections.
3. Changes, and growth, for Publix
The first quarter of 2016 was packed with big news from Publix Super Markets.
It was announced in mid-January that Ed Crenshaw, longtime CEO of the Lakeland, Florida-based grocery chain, would retire at the end of April. Crenshaw, grandson of Publix founder George W. Jenkins, began his career with Publix in 1974 as a front-service clerk. He was named CEO in June 2008. Crenshaw remains on the company’s board of directors and became the board’s chairman on May 3.
Following Crenshaw’s exit as CEO, Todd Jones, president of Publix since 2008, added the chief executive title. Jones began working at Publix in 1980, when he was 15 years old, as a front-service clerk.
Shortly after that executive announcement, Publix on Feb. 2 said that it had signed two leases for stores in Virginia—its first foray into that state.
A 54,000-s.f. Bristol store is expected to open in the fourth quarter of 2017 and a 49,000-s.f. Glen Allen store in 2018.
4. Revamps, new concepts for Southeastern Grocers
Southeastern Grocers, the Jacksonville, Florida-based parent company of Bi-Lo, Harveys and Winn-Dixie stores, is rethinking its stores and business, evidenced by the company’s 2016 extensive store remodel program.
Early in the year came a fresh new design for the Winn-Dixie chain when it unveiled its Bay Meadows Road store in Jacksonville. Winn-Dixie had closed the store in 2010 but had a long-term lease on it so, as the shopping center and area was experiencing revitalization, the company in October 2015 demolished the interior, with renovations beginning the following month.
The Baymeadows store marked the first complete interior reconstruction for Winn-Dixie. It emphasizes freshness, quality, value and the “sense of something cooking in the kitchen,” thanks to on-site food preparation, according to Ian McLeod, president and CEO of Southeastern Grocers.
Winn-Dixie debuted another “next-generation” unit in South Tampa in mid-October. The new Winn-Dixie at Hyde Park has been tailored specifically to the South Tampa community with a focus on quality food, personality and great value.
The Harveys banner made news in 2016, too.
In June, a new-concept Harveys opened in a former Winn-Dixie location in Jacksonville—the first Harveys store in the city. McLeod called it “a format for customers shopping on a budget.” The format boasts hundreds of popular products priced “Low and Staying Low,” a “$1 Zone,” a “Pick 5” program for fresh and frozen meats, and more.
Harveys also opened its first North Carolina store in 2016. The store debuted in July at a former Bi-Lo location in Charlotte and includes the features of the new-concept Harveys in Jacksonville.
5. Walmart closes 154 U.S. stores, buys Jet.com
Fifty-nine stores in the Southeast were among those shuttered by the Arkansas-based retail giant.
On Jan. 15, the company 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 Southeast included: Alabama—eight Walmart Express stores and one Supercenter (Fairfield); Florida—three Walmart Express; Georgia—seven Walmart Express; Louisiana—eight Walmart Express; Mississippi—six Walmart Express; North Carolina—16 Walmart Express and one Supercenter (Durham); South Carolina—two Walmart Express and one Supercenter (Winnsboro); Tennessee—four Walmart Express and one Neighborhood Market (Nashville); and West Virginia—one Supercenter (Kimball).
Walmart said at the time that it would focus instead 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.
6. Food Lion founder dies at 95
Mr. Ralph W. Ketner, the last of the trio of men who in 1957 founded Food Town, which became Food Lion, died May 29 at the age of 95.
The Shelby Report sat down with Mr. Ketner in North Carolina on March 7 for an interview. Less than two weeks later, it was revealed he had been hospitalized and given a colon cancer diagnosis. He then was in hospice until his passing. His funeral was held June 5 in Keppel Auditorium on the Catawba College campus in Salisbury, North Carolina, where there is a business school named for Mr. Ketner.
Mr. Ketner and his brother, Brown, along with their friend, Wilson Smith, wanted to start a grocery store in Salisbury but had no money. They called on friends and strangers from the phone book to invest $10 a share. All told, there were 125 original investors. An original share of Food Town stock eventually split 19,440 for 1. Each original investment created a million-dollar return during Mr. Ketner’s tenure. Not only did the Ketners and Smith succeed, but they also made millionaires of their friends and neighbors.
The company continued to expand across North Carolina and the U.S., becoming one of the fastest-growing supermarket chains in the country. In the 1970s, the grocery chain grew by 35 percent per year and would later be renamed Food Lion. The Belgian company Delhaize purchased stock in Food Lion during this time period, and that relationship continues today through Food Lion’s parent company—Ahold Delhaize.
7. The Fresh Market goes private
The Fresh Market, which went public in November 2010, became a private company again in 2016, following the March 14 announcement that the North Carolina-based specialty grocer would be acquired by an affiliate of Apollo Global Management for approximately $1.36 billion. Apollo said at the time that it has assisted companies like Sprouts Farmers Market, Smart & Final and Hostess Brands in undertaking “significant transformations…and we intend to bring that experience to bear at The Fresh Market.”
Those “transformations” got under way later in the year as the grocer, which operates nearly 200 stores in 27 states, began rolling out a new look. The refresh that includes an enhanced shopping experience features a new logo and reimagines the market as a destination where guests can find an increased selection of local products, health-conscious items and new categories, including everyday grocery classics, according to The Fresh Market.
The makeover was first revealed at three North Carolina stores on Oct. 26. Following this initial Triad launch, the grocer was expected to roll out refreshed stores across the country, with 13 more locations scheduled for Nov. 30 (after press time) in the Charlotte and Raleigh/Durham, North Carolina, markets, and continuing in waves through early 2018.
8. LeBlanc’s stores become Rouses
Two family-owned Louisiana grocery chains came together as one this year when Rouses and LeBlanc’s merged. LeBlanc’s Food Stores’ nine Louisiana locations, including its five units operating under the Frais Marché banner, officially became Rouses Markets on Nov. 8, giving Rouses a total of 54 stores across Louisiana, Mississippi and Alabama. LeBlanc’s associates have joined the Rouses family of employees.
Rouses also opened its first Baton Rouge store in 2016, on Aug. 24. The store is located on Village Market in the Long Farm Village Development at the intersection of Antioch Road and Airline Highway.
The opening of the Baton Rouge store could not have come at a better time for Rouses and the community. In fact, the store opened early to meet the needs of its neighbors following the devastating summer floods in Louisiana.
Just days before the Baton Rouge grand opening, Rouses’ Denham Springs store was destroyed by the flood waters, which began coming into the store on Aug. 13 and quickly rose to about five feet, according to managing partner Donny Rouse. He told The Shelby Report then that inventory loss totaled about $1.5 million and there was another $4 million in building and asset damage. Store restoration began Aug. 16 and was expected to take eight to 12 weeks; the store had not reopened at the time of this report in early November.
Other supermarkets also took a hit in the August floods. Southeastern Grocers, for instance, reported that several of its Winn-Dixie stores sustained damage.
9. Lanning promoted to Ingles CEO
Jim Lanning, longtime leader and 30-year company veteran, was promoted to CEO of Asheville, North Carolina-based Ingles Markets Inc. in March.
Robert P. Ingles II, who had served as the chief executive, retains the board chairman title, which he has held since 2004, and continues his day-to-day operations role in the executive leadership of the grocery chain.
Lanning joined Ingles as a student in 1975 and has served as president of the company since 2003.
Ingles Markets operates more than 200 supermarkets in Alabama, Georgia, North Carolina, South Carolina, Tennessee and Virginia.
10. Larry Higdon wins top IGA award
Larry Higdon, president of Ira Higdon Grocery Co. in Cairo, Georgia, was among three recipients of IGA’s J. Frank Grimes Award during IGA WorldWide in February. The award, IGA’s highest honor, is given to those who exhibit the principles, passion and charisma of IGA’s founder, J. Frank Grimes, and who have provided outstanding service to IGA.
Higdon is the third generation of his family to operate Ira Higdon Grocery Co., a family-owned wholesale business serving Georgia, Florida and Alabama. After graduating from Emory College and serving as a fighter pilot through two tours of Vietnam, he joined the family business, spending more than 40 years growing it into a successful IGA Licensed Distribution Company.
“I would like to say that I’m proud to receive this award,” said Higdon at the event. “…I don’t think we’d still be around if we hadn’t joined IGA in 1966. We’re proud to be a member.”
*Editor’s note: The regional Year in Reviews appear in the December print editions of The Shelby Report. Go here for a look ahead at 2017.