Livin’ the Retail Loca

Upside inside out. This past year in retailing was the crazy life. Major mergers, market shifts, banner changes, zooming numbers, swinging volumes – and the whole idea of geography is scattered to the wind.

Consolidation has been the craziest. In an attempt to do historical co-marketing business reviews, sales executives are forced to ask piercing research questions like, “Uh, who owns them now?”

As concentration grows, so do the concentrated. “1999 has been the year for completing the really big deals,” says my colleague, Ed Townsend, director of research at Trade Dimensions, “Kroger and Albertson’s accounted for 65 percent of the total acquisitions.”

FOOD PYRAMID

According to Townsend, major deals involving 100 or more stores affected 33 percent of supermarket all-commodity volume. When deals involving 20 or more stores are included, that number goes up to 38 percent. If you don’t think 20 stores is a lot, just ask your local field rep. That can make or break a market.

The top 10 rounds out like this (accounting for pending acquisitions): 1. Kroger; 2. Albertson’s; 3. Ahold (with Pathmark); 4. Safeway; 5. Wal-Mart (supercenters only); 6. Winn-Dixie; 7. Food Lion (with Hannaford Brothers); 8. Publix; 9. A&P; 10. H. E. Butt.

When it comes to the names, let’s look at how much has really changed in a decade. For kicks, here are the top 10 from 1989: 1. American Stores; 2. Kroger; 3. Safeway; 4. A&P; 5. Winn-Dixie; 6. Albertson’s; 7. Supermarkets General (now Pathmark); 8. Publix; 9. Vons; 10. Food Lion.

If you were Rip Van Winkle waking up after a decade on the road, you’d think the landscape hadn’t really changed. With the single, very notable exception of Wal-Mart, every top 1989 retailer is still in the top 10 in some incarnation. Now that’s longevity. Can we say the same for packaged goods brands?

WHO’S NO LONGER WHO

Just in case you didn’t keep a scrap book, here’s how the grocery retailing world was moving and shaking in the last year: Safeway acquired Carr Gottstein. Kroger and Fred Meyer finalized their merger. Kroger acquired Indiana retailer John C. Groub. Albertson’s completed its acquisition of American Stores, then sold nearly 150 outlets to competitors to comply with FTC regulations. Ahold announced plans to acquire Pathmark. Food Lion made plans to acquire Hannaford Brothers and then formed a new holding company called Dahlias America. Safeway completed its acquisition of Rundles. Shaw’s Supermarkets sold all 41 Star Market Wholesale stores to C & S Wholesale Grocers.

There’s more: C & S announced plans to open a distribution center to service stores operated by the Giant Food Division of Ahold. Nash Finch acquired Midwest Wholesale Foods. Certified Grocers of California and United Grocers agreed finally to merge into Unified Western Grocers. Oh, yeah, and SuperValu bought Richfood Holdings.

MASS HYSTERIA

Caldor went out of business and sold stores to Ames Department Stores, Dayton Hudson (owner of Target), Federated Department Stores, Kohl’s, Home Depot, and Kmart. Until these new stores open, thousands of New England residents have no place to buy new laundry hampers.

Ames converted 150 acquired Hills Department stores and nine former Caldor stores to the Ames format. Kmart entered into agreements with SuperValu and Fleming to supply groceries to Kmart for three years. Target announced plans to open 200 supercenters. Shopko acquired Pamida. Dollar General announced plans to open over 550 stores and relocate 250 stores.

CHAIN-DRUG GANG

Eckerd bought Genovese Drug Stores. Longs Drug Stores and Rite Aid swapped 14 stores. CVS converted 233 Arbor Drug Stores to the CVS banner. Phar-Mor acquired Pharmhouse, creating a discount chain with 138 stores operating under the Phar-Mor, Pharmhouse, and The Rx Place names in 24 states.

GOT GAS?

In the convenience store channel: Amoco merged with Atlantic Richfield. Tosco/Circle K bought 137 gasoline and convenience stores from Amoco. Exxon bought Mobil to create Exxon Mobil Corp. To win clearance for the buyout, Exxon then made plans to sell 1,740 gas stations and c-stores in the East to Tosco/Circle K. The Southland Corporation changed its company name to 7-Eleven Inc.

Had enough? Tracking all this would make you want to take your clothes off and go dancing in the rain. And don’t worry, if you think this year will be any easier, it won’t. The only thing you can depend on is that old cliche about how the only thing you can depend on is change.