Every region has a local grocery chain, sometimes more than one, that people over the age of 40 (or so) remember fondly from their youth. Back in the 90s, the Internet was in its early days and people simply had fewer options.
Generally, families shopped at the grocery chain store closest to their homes. In larger markets, they may have had two rival brands to pick from, but it was rarely more than that. Walmart (WMT) was, of course, a player, but its focus was not on groceries, and Target (TGT) had not even entered that space.
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Whole Foods and Trader Joe's existed, but they were relatively small players in the space. The Internet existed, but you certainly could not order your groceries for delivery or curbside pickup.
Many of those regional chains, like Star Market and Shaw's began as family-owned brands and later ended up as part of giant, public companies (in this case Albertson's (ACI) ). There are some privately held or even family-owned grocery chains. Publix, a huge player in Florida that operates in several southern states is actually 80% employee-owned.
Now, no matter how your ownership is structured, traditional grocery chains face significantly more competition. Walmart and Target can use grocery items as a way to sell higher-margin non-food products. Amazon (AMZN) has massive purchasing leverage, and Costco (COST) keeps prices very low as its core goal is selling memberships.
That puts a grocery chain that just sells groceries in a challenging operating environment, and one popular chain has shared that it's examining its store portfolio and plans to close some stores.
Image source: Target
A regional grocery chain struggles
If you grew up in New England, you probably remember the near-ubiquitous commercials for the Stop & Shop grocery store chain. They were folksy ads that ended with a tagline that was sung, "It's time to stop and shop."
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That wasn't exactly clever, but the standards for local advertising were fairly low. The company, which has a history dating back to 1914, shared some of its long history on its website.
"We’ve been around for more than 100 years. A lot has changed in all that time, but what hasn’t changed is our commitment to making our stores better every day for our associates, customers and the community," the company shared.
From its original location, which was called the Economy Grocery Store, the chain expanded significantly over the years.
"Today we proudly operate more than 400 stores throughout New York, New England, and New Jersey with the help of 60,000 dedicated associates. We let you shop your way — in-store, online, for pickup, or home or business delivery," Stop & Shop added.
Some of those stores, which operate under the Stop & Shop brand the company adopted in 1942, appear likely to be closed in coming months.
Stop & Shop plans to close "underperforming" stores
While the company has not shared its specific plans, Stop & Shop did share a media statement that acknowledged that some stores will be closed.
“Stop & Shop will make some difficult decisions to close select underperforming store locations to help ensure the long-term health and future growth for our business,” according to the company.
The news actually first came out during an investor presentation held in The Netherlands where its parent company Ahold Delhaize is based. JJ Fleeman, the CEO of Ahold Delhaize USA, talked about the potential closures.
“As Stop & Shop embarks on its next phase, we will be decisive and take deliberate and appropriate actions to ensure a stable future for the brand," Boston's WCVB5 reported.
The CEO said the chain would "focus on the markets that are most important, including those where the brand has strong density, holds a strong market position, or has stores that are performing well.”
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Stop & Shop currently operates 125 Massachusetts locations, 100 in New York, 88 in Connecticut, 57 in New Jersey, and 27 in Rhode Island.
No timeline has been shared for stores to be closed.
Related: Costco shares big news on its long-expected membership price hike
