Broad Street Licensing Group Food News

Not All Food Retailers Are Doing Well

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In general, the only retailers who did well during the Great Recession were ones who sold food.

You might cut back on clothes, cars, big-ticket purchases or even lose your home, but you have to eat.

Yet not all grocery chains thrived. Safeway & Kroger struggled with the perception they were over-priced, and A&P even went into bankruptcy. Target publicly acknowledged it had put too much emphasis on its “too cool for school” fashion & housewares business, and has since ramped-up its food offerings.

The latest chain to struggle is New England’s Shaw’s Market.

The Griffin Report of Food Marketing, a Duxbury, MA-based trade source, reports Shaw’s has lost market share and a boatload of sales since 2006. Then its share stood at 19% (now 11%) and sales have dropped by $1.6bn. Now Cerberus Capital will purchase the 169 Shaw’s stores from its parent company, SuperValu, as the private equity firm trades its guns for chow.

Business experts blame Shaw’s problems on SuperValu’s lack of understanding of the retail grocery business, especially the regional nature of most food selling. Additionally, saddled with crushing debt when it acquired the chain, SuperValu has had no money for investing in Shaw’s and its sister chain, Star Markets. The latest sales figures show a decline from $5.3bn to $3.8bn last year.

Ouch!

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