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Hannaford Sold

July 7, 2015

Sometimes we talk about the origins of our food. And sometimes we get all skittish about learning things about the foreign nations involved in our supply chains.

The Trader Joe’s Fearless Flyer alerted me to the fact that a crap-ton of salmon is frozen twice. The first time is at sea, on the boat upon which it is caught. But then the frozen fish is shipped to China, where it is defrosted, scaled, boned, and portioned before being refrozen for transport to grocery stores in the US and elsewhere.

And other times we talk about consolidation in the food business. For me, it’s been extremely painful to watch cherished natural foods brands be snatched up by large industrial food companies which use a portion of their profits to combat labeling of GMOs.

But did you know that there is both massive foreign involvement and consolidation in the grocery store business, too?

I’m actually a little late with this post. I’ve been running a backlog. And originally Mrs. Fussy misread the story. She told me that Hannaford was going to be merging with ShopRite and I almost wet myself with excitement.

But she got it wrong.

There are a lot of grocery stores competing in the Capital Region at the moment. And the feeling is that even with the growth in the area, there just still isn’t enough business to support the number of markets. The new Shop Rites have lost their luster. Whole Foods hasn’t been able to sustain its original momentum. Price Chopper has begun rebranding itself as Market 32. Hannaford has put a prettier face on a bunch of its locations too.

How’s this going to end? I have no idea. But if there was a ShopRite and Hannaford merger, that would be huge. As it turns out, the merger is between Hannaford and Stop and Shop. Although the news of this really revealed an aspect of the grocery business that was largely invisible to me.

Hannaford is based in Maine, but it’s owned by a Belgian company — the Delhaize Group. And this enterprise also owns Food Lion, a chain of grocery stores in the southeast. The Dutch conglomerate Royal Ahold is going to absorb the Delhaize Group. But Royal Ahold already has grocery store holdings of its own in the form of Stop & Shop in the Northeast, Giant in the Mid-Atlantic, and Peapod the online grocer.

Wow. Together, this new venture will create the fourth largest supermarket conglomerate in the country with a market share of about five percent.

Let’s put that into simpler terms. Four CEOs control over 1/5th of US grocery store sales.

Everyone suspects that Hannaford will remain intact. The new buyers want the power of that brand, and analysts are suggesting Hannaford will stay Hannaford, especially in New York. They aren’t anticipating store closings. Largely what this deal will get the parent company are some efficiencies, and the brands will get a broader selection of private label goods to sell on their shelves.

That said, a new parent company might take a long hard look at locations that are underperforming. And that could have implications locally. On the flip side, it could opt to invest in growing markets, in which case we might see Hannaford take more aggressive moves in the area instead of just following the lead of its regional competitors.

Regardless, I thought it was important for you to know that this is going on. Especially considering how closely the local grocery store scene is followed by our community. Although maybe now that we have so many more options, it’s less important.

My guess is that people will continue to obsess about grocery stores until the day we see a Wegmans in the Capital Region. But I suspect that day is still far off in the future.

3 Comments leave one →
  1. Lorraine Lewandrowski permalink
    July 7, 2015 10:08 am

    Dairy coop leaders stated at the federal antitrust in ag hearings that Walmart controls 20% plus retail food in the US. They also said Walmart has great power to exert downward price pressure on farmers. Pretty much raw power to push back farmer attempts to get better prices. We do not have even the weak Supermarket Code of Conduct as in some other countries.

  2. July 8, 2015 9:59 am

    Come on Wegmans, we need you here!!!

  3. Betty permalink
    July 10, 2015 2:25 pm

    or they could us the name stop, shop and save – you know a nod to the past –

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