business news in context, analysis with attitude

• The Minneapolis / St. Paul Business Journal reports that while Target continues to try to improve its grocery offering, believing that this is key to sustained growth and relevance, there is at least some belief in the marketplace that Target will continue to lose market share to Walmart, which continues to make its own improvements.

The story says that "Minneapolis-based Target has struggled with customer traffic all year, especially in the sort of "fill-in trips" that customers make to buy milk or other consumables. Target has recently revamped its grocery staffing and is working on a redesigned concept for its grocery departments, but that rollout could take time.
Meanwhile, Wal-Mart has grown more aggressive on pricing and stepped up features like online pickup.


• Weis Markets yesterday announced its plans to convert 38 Food Lion supermarket locations that it acquired to its own banner, saying that it expects the process to be completed by the end of October, along with the hiring of some 2,000 Food Lion employees to staff the stores. Weis said it plans "to close and reopen each location quickly and efficiently to ensure that customers are faced with little inconvenience. This process is expected to take less than a week for each location."

"Once the conversions are completed over the next two months, we will have nearly doubled our Maryland store count and expanded into Virginia and Delaware," said Kurt Schertle, Weis Markets' COO. "Our goal is to build on our advantages as a locally focused retailer that offers a strong combination of quality, value and service. As part of this commitment, we plan to expand variety in every department."

Between this acquisition and one earlier this year of five Mars Super Markets in Baltimore County, Weis Markets now has increased the number of its operating stores by more than 25 percent and will operate 204 stores in seven states: Pennsylvania, Maryland, Virginia, New York, New Jersey, Delaware and West Virginia.


• Associated Wholesale Grocers, Inc. (AWG) and Affiliated Foods Midwest Cooperative, Inc. (AFM) announced that they had reached agreement on how to combine the two cooperatives’ distribution businesses, having received "near unanimous approval from the over 400 grocery store member- owners of AFM" who cast votes "at their annual shareholders meeting over the weekend in Omaha, NE."

Following unification, the companies say, "the expanded AWG will provide products and services to over 3,500 independently owned member stores located in 35 states from nine full-line wholesale divisions making it the nation's largest cooperative food wholesaler. In addition to its' cooperative wholesale operations and related services, the company operates subsidiary companies which provide wholesale supply of health and beauty care, general merchandise, pharmaceutical supplies, and specialty, natural, organic and international foods, together with certain real estate and supermarket development services, retail accounting, digital marketing services, and military commissary supply. Following the unification, AWG will have annualized consolidated sales of approximately $10 billion.
KC's View: