THE FRIDAY 5: Tops Markets Expands Footprint; Walmart Health Closes Up Shop

1. Tops Markets, Stew Leonard’s in Growth Mode 

News of Northeast Grocery Inc. growing its corporate-owned footprint resonated with readers this week. The company's Tops Friendly Markets division has acquired five store locations that had been owned and operated by Supermarket Management, Inc. (SMI), a longstanding franchise partner of Tops. The acquisition includes four full-service Tops stores located in Depew, Lockport, South Buffalo, and Buffalo’s West Side as well as one Tops Xpress store in Lancaster. 

The newly acquired stores will remain open and continue to operate as Tops Markets under their current store management teams. Tops will retain all 585 associates across the five locations, and there will be no disruption in store operations, including pharmacy services. 

Also in growth mode is Stew Leonard’s Farm Fresh Food and Wine, which is getting ready to cut the ribbon on its second location in New Jersey, marking its eighth overall. Located in Clifton’s Styertowne Shopping Center at 467 Allwood Road, the new 56,000-square-foot grocery and wine store will feature products from more than a dozen local vendors and dozens of New Jersey farms. 

2. Walmart Shock Waves

Walmart made headlines for multiple reasons this week, but most notably for the surprising closure of its Walmart Health business division. The retailer had operated 51 health centers across five states, as well as a virtual care offering, and cited the fact that it is not a sustainable business model as the reason for its demise.

“We understand this change affects lives – the patients who receive care, the associates and providers who deliver care and the communities who supported us along the way,” the company said in a blog post. “This is a difficult decision, and like others, the challenging reimbursement environment and escalating operating costs create a lack of profitability that make the care business unsustainable for us at this time.” 

This was the latest of Walmart’s several attempts to find profitability in the health care segment. While it will no longer operate clinics, the retailer says it will continue to provide health and wellness services across the country through its nearly 4,600 retail pharmacies and more than 3,000 vision centers. 

On a more positive note, Walmart also made news this week for the launch of its new “elevated” private food brand, dubbed bettergoods. This is the retailer's largest private-brand food launch in 20 years and the fastest food private brand that Walmart has brought to market.

Instead of simply providing direct alternatives to national-brand offerings at a lower price, many of Walmart’s 300 private-brand items are unique to the retailer. According to the company, bettergoods offers a brand-new take on the culinary experience with elevated taste, flavor and variety that are approachable and affordable. Walmart’s product development team collaborated with suppliers across the globe to source quality, trend-forward ingredients and flavors.

3. Store Closures Plague the Independent Grocery Segment

A spate of store closures has hit the industry in recent weeks, and fallout is still happening from the abrupt shuttering of both Dom’s Market and Foxtrot. The day after 33 Foxtrot stores and two Dom’s locations closed, a lawsuit was filed on behalf of now-former employees. According to a report in Block Club Chicago, the class-action measure was taken against parent company Outfox Hospitality, which was formed only a few months ago.

One named plaintiff is a worker at a Foxtrot location in Chicago’s Old Town neighborhood, near Dom’s second store that opened in 2022. Attorneys cited legislation under the U.S. Department of Labor, the Worker Adjustment and Retraining Notification (WARN) Act, that helps ensure advance notice to employees in the event of mass layoffs and closures. 

As for other independent grocery closures, PG reported on the venerable Sickles Market filing for bankruptcy after 116 years in New Jersey, as well as the closure of family-owned Logsdon’s Grocery, which was the only grocer in the city of Maxwell, Iowa. On the West Coast, Market Hall Foods is shuttering one of its stores in Berkeley, Calif., after Memorial Day weekend. That specialty grocery operator was affected by recent challenges including the pandemic, supply chain backstops and inflation.

4. Publix Shows Its Worth

As it shared its Q1 financial results, Florida-based Publix Super Markets also revealed that effective May 1, its stock price increased from $15.20 per share to $16.25 per share. Publix stock is not publicly traded and is made available for sale only to current Publix associates and members of its board of directors.

As for numbers, the quickly growing grocer saw Q1 sales of $15.1 billion, a 5% jump from last year's $14.3 billion. Comparable-store sales increased 2.8%. Net earnings for the three months ended March 30 were $1.4 billion, compared with $1.2 billion in 2023, an increase of 10.1%. 

5. Save Mart Ready for In-Store Retail Media

We hardly go a week here at PG without hearing about a new grocery retail media program, and this time The Save Mart Companies garnered attention with its latest advertising offering. As the company shared exclusively with PG, when it decided to delve into in-store retail media, the its tech experts didn’t have to look far to find a partner – they tapped their existing marketing agency, Quad. 

The timing was right for both companies to move forward with the development and deployment of an in-store retail media network for the retailer with a rather dense footprint in California. “We have a really strong relationship with them on a lot of aspects of our business. From a strategic perspective, we are aligned with the leadership team on trends in grocery and we have been discussing retail media in general and its evolution,” recalled Tamara Pattison, SVP and chief digital officer at Save Mart. “On a parallel track, we started to investigate in-store activation with retail media.”

Over the past several months, Save Mart and Quad have worked closely together to build out the in-store program, In-Store Connect by Quad, with the ultimate aim of helping suppliers connect with customers in an integrated way across all digital platforms. “We are helping shoppers learn about new and innovative products that are available to them in our stores,” explained Pattison.