Company Profiles

SMALLER COMPANIES

  • Loblaw Companies
  • Wakefern Food Corporation
  • The Great Atlantic & Pacific Tea Company
  • Giant Eagle
  • Roundy’s Supermarkets, Inc.
  • Pathmark Stores, Inc.
  • Stater Bros. Holdings Inc.
  • Raley’s Inc.
  • Save Mart Supermarkets
  • Schnuck Markets, Inc.
  • Dierbergs Markets Inc.
  • Lund Food Holdings, Inc.
  • Overwaitea Food Group

KROGER

1014 Vine St.
Cincinnati, OH 45202
http://www.thekrogerco.com

Kroger is the largest conventional supermarket operator in the U.S., and the second largest U.S. grocery retailer after Walmart.

Store count

Store type Count as of 1/29/2011 (end of fiscal year 2010)
Conventional Supermarkets 2,126
Marketplace Stores (with some general merchandise) 61
Multi-Department Stores (with extensive general merchandise) 125
Price Impact Warehouses 146
Total Supermarkets 2,458
Convenience Stores 786
Jewelry Stores 361
Total Stores 3,605
Number of stores with fuel centers 1,014
Number of stores with in-store pharmacies 1,970
Number of states in which the company operates 31

(Source: Kroger Website, http://www.thekrogerco.com/operations/operations.htm)

 

Key Banners

Kroger, Ralphs, King Soopers, City Market, Dillons, Smith’s, Fry’s, QFC, Baker’s, Owen’s, JayC, Hilander, Gerbes, PayLess, Scott’s, Kroger Fresh Fare, Food 4 Less, Foods Co, Fred Meyer, Kroger Marketplace, Dillons Marketplace, Smith’s Marketplace, Fry’s Marketplace.

(Source: Kroger Website, http://www.thekrogerco.com/index.htm)

Employees

  • Kroger had 338,000 employees at the end of fiscal year 2010, with a “majority” being unionized, primarily by the UFCW and Teamsters. (Source: Kroger’s 10-K report for fiscal year 2010, Part I Item 1, p. 2)
  • The UFCW represents almost 208,000 Kroger workers. (Source: UFCW Contract Directory)

Financial Performance

Sales. Companywide sales were $82.2 billion in fiscal year 2010, up 24% from $66.1 billion in fiscal year 2006. (Source: Standard & Poor’s Compustat database)

Operating profits. Profits from operations of the company (prior to paying interest on debt and taxes) were $2.2 billion in fiscal year 2010, down 1.6% from $2.24 billion in fiscal year 2006. As a share of sales, operating profit was 2.68% in fiscal year 2010, compared to 3.38% in fiscal year 2006. (Source: Standard & Poor’s Compustat database)

Net profits. Profits after paying interest and taxes were $1.1 billion in fiscal year 2010, essentially unchanged from fiscal year 2006. As a share of sales, net profit was 1.36% in fiscal year 2010, compared to 1.69% in fiscal year 2006. (Source: Standard & Poor’s Compustat database)

Why was profit growth negative over a 5-year window? Primarily because Kroger chose to keep prices low for competitive advantage. The cost of procuring goods grew 28% over the five-year period, while sales grew only 24%. The gross margin (defined as the amount by which a company’s total sales exceed the cost of procuring goods, expressed as a share of total sales), declined from 24.2% to 22.2%. (Source: Standard & Poor’s Compustat database)

Same store sales growth. Same store sales growth, or growth in sales at stores open for at least a year, is a key measure of retail sales growth since it shows how much a retailer is able to grow sales from an existing store base (excluding new store openings and mergers and acquisitions). By this measure, Kroger’s performance has been outstanding. In fiscal year 2010, same store sales (excluding fuel sales) grew 3.1% (or 2.8% for “identical store sales,” which excludes stores that were relocated or remodeled). For the fourth quarter of 2010, same store sales (excluding fuel) grew 4% (or 3.8% for “identical store sales”). Unlike key competitors such as Walmart, Kroger has had positive same store sales growth for every quarter over the last several years, including during the depths of the recession. (Source: Standard & Poor’s Compustat database, Kroger’s 3/3/2011 press release announcing 2010 fourth quarter and full-year results.)

Stock price. As of the close of the trading day on June 23, 2011, Kroger’s stock traded for $24.74, which was 20.5% greater than its price of $20.53 five years earlier. By comparison, the S&P 500 index rose by just 3.1% over the same period. (Source: Yahoo Finance)

Market Shares

Nielsen Homescan data. Kroger reports in its 10-K that Nielsen Homescan market share data for 2010 showed that Kroger increased its overall market share by 80 basis points across all 19 market areas that Nielsen reported on (1 basis point = 0.01%). Kroger’s market share increased in 13 of the 19 areas, decreased slightly in four areas, and remained unchanged in two areas. Most significantly, Kroger’s market share increased by 75 basis points in the 17 market areas in which Walmart is a key competitor. (Source: Kroger’s 10-K report for fiscal year 2010, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, p. 11)

Market shares in key metropolitan markets. Kroger has dominant market shares in a number of major metropolitan areas. The following are all the top 20 markets by population in which Kroger operates:

 

 

Metropolitan market Kroger share (%) Kroger rank
Los Angeles-Long Beach-Santa Ana, CA 22.4% 1
Dallas-Fort Worth-Arlington, TX 14.4% 2
Houston-Sugar Land-Baytown, TX 22.0% 2
Atlanta-Sandy Springs-Marietta, GA 25.3% 2
Detroit-Warren-Livonia, MI 27.1% 1
Phoenix-Mesa-Glendale, AZ 26.7% 1
Riverside-San Bernardino-Ontario, CA 14.2% 2
Seattle-Tacoma-Bellevue, WA 25.3% 1
San Diego-Carlsbad-San Marcos, CA 15.3% 4

This shows that Kroger is a strong competitor in all the major markets in which it operates. (Source: Metro Market Studies, 2010)

 

Executive Compensation

  • In fiscal year 2010, Kroger CEO David Dillon made a total of $7.55 million in all forms of compensation, and the five most highly paid executives made a combined total of $18.66 million. (Source: Kroger’s Proxy Statement for 2011 Shareholders’ Meeting, Summary Compensation Table, p. 34)
  • Assuming 40 hours per week for 52 weeks in the year, Dillon’s equivalent hourly rate of pay in fiscal year 2010 was $3,630.

Dividends and Share Repurchases

  • Kroger paid $255 million in cash dividends to shareholders in fiscal year 2010, which represents a 36% growth in dividends over the $187 million paid out to shareholders in fiscal year 2006, the start of the current dividend program. (Source: Standard & Poor’s Compustat database)
  • Kroger repurchased $545 million in shares in fiscal year 2010, and almost $3.5 billion in shares over the last five fiscal years. (Source: Standard & Poor’s Compustat database)

What Wall Street thinks of Kroger

Here is a sampling of what some key Wall Street investment analysts think of Kroger’s financial performance and competitive position:

  • “Kroger put up a good quarter driving above-expectations ex-fuel ID (identical store sales) and EPS (earnings per share)…..market share gains and an underlying improvement in the employment picture are all likely to drive solid results.” (Jefferies Equity Research, 3/4/2011)
  • “Kroger continues to gain share, underscoring key advantages like its scale, strong local market shares, and a deep private brand portfolio.” (Deutsche Bank, 3/4/2011)
  • “Identical Store Sales Remain Strong and Kroger Is Gaining Market Share…These id (identical store) sales results are significantly stronger than those of KR’s traditional supermarket competitors.” (Barclay’s Capital Equity Research, 3/4/2011)
  • “In 2010, we remained impressed with KR’s ability to drive strong ID (identical store) sales and traffic.  Of the supermarkets we cover, KR was the only one to post positive ID sales in 2010 (+2.8%)…..In addition, KR has been able to gain market share over the last year as the company continues to differentiate itself from its traditional and non-traditional competitors.” (Citigroup Global Markets, 4/10/2011)

SAFEWAY

With 1,692 stores in the United States and Canada,[1] Safeway is North America’s fourth largest food retailer.[2] It owns a 49% stake in Casa Ley, a major retailer in Mexico, and is involved in a number of other commercial enterprises.

Banners

Vons (California), Pak’n Save (California), Pavilions (California), Simon David (Texas), Randalls (Texas), Tom Thumb (Texas), Genuardi’s (Northeast and Canada), Carrs (Alaska), Dominick’s (Midwest).

Subsidiaries

Blackhawk Network, Casa Ley, Property Development Associates, Groceryworks Holdings.

Employees

At year-end 2010, Safeway employed more than 180,000 persons, of which approximately 80% are covered by bargaining agreements negotiated by no less than nine different international unions.[3] According to the contract directory, the UFCW represents 108,233 Safeway employees.

Financial Performance

Sales. Sales were $41 billion in 2010, up approximately 2% since 2006.[4] Over the last few years, sales had essentially remained stable as Safeway progressed through the process of closing its least profitable operations. Sales generated by existing outlets, excluding stores that closed or opened during the period in question, have been improving for five consecutive quarters and passed into the green this past quarter, growing .4%, excluding fuel, when compared to the same quarter last year. So-called same store sales grew in nine of ten operating divisions. All in all, sales increased 4.8% quarter-over-quarter.

Operating Profits. In 2010, Safeway generated $1,160 million in operating profits, down from $1,345 million in 2009. The company’s operating profit margin typically stands at about 3% to 4%, a healthy figure for a food retailer.5

Net Profits. In 2010, Safeway generated $590 million in net profits, down from $720 million in 2009. Safeway’s net profit margin has fluctuated between 1.44% and 2.19% over the last five years,[5]as compared to an industry average of 1.46% in 2006 and an average of 1.22% for the preceding decade.[6]

Stock Price. As of close on May 31, 2011, Safeway’s stock traded at $24.7, which was 3.1% higher than its price of 23.95 five years earlier. By comparison, the S&P 500 Index (a composite measure of the stock price of the 500 largest publicly traded companies) rose by 4.6% over the same period.[7]

Market shares in key metropolitan markets

Though Safeway is no longer the market leader it once was – it fell from its position as the top U.S. food retailer in 1987 to fourth largest today – it still maintains top-tier market share in many of America’s largest metro areas, particularly on the West Coast.[8]

Metro Area Safeway Share Safeway Rank
Los Angeles-Orange, CA 13.1 2
Chicago, IL 11.4 2
Dallas-Fort Worth, TX 11.5 3
Houston, TX 7.5 4
Philadelphia, PA 6.8 5
District of Columbia 17.9 2
Phoenix, AZ 12.9 3
Riverside-San Bernardino, CA 7.3 5
San Francisco, CA 30.6 1
Seattle, WA 23 1
San Diego, CA 23.3 1
Baltimore, MD 10.5 2

 

Executive Compensation

In 2009, the five top-paid employees received a total of $24.2 million in total compensation. Steven Burd, Safeway’s president and CEO, received a total of $10.9 million in compensation. This year, Forbes ranked him as the second best-paid food markets executive in America.[9] Assuming 40 hours per week for 52 weeks in the year, Burd’s equivalent hourly rate of pay was $5,241.

Dividends

In 2010, Safeway paid out $168 million in gross dividends, up from $153 million in 2009. Since 2005, the company has consistently raised dividend rates by 20% per share every 12 months.3 Most recently, the Board of Directors announced a 21% increase from $0.12 per share to $0.145 per share on May 19, 2011.

What Wall Street thinks of Safeway

Analysts are generally positive on Safeway, noting industry-wide success in “passing through rising costs and with little push back from consumers.”[10] Citigroup sees Safeway “moving ahead gradually to stabilize volume, sales, market share, and profits” and is impressed in the company’s successes “in shrink [money lost on trashed products] and to a lesser extent in labor and operating expenses.”[11] Moreover, improving same store sales trends give reason for optimism.

Even more exciting for analysts than Safeway’s sales performance are the oncoming awards for stock holders. Citigroup expects a dividend of $500 million in the current quarter and salivates over the anticipated $405 million in share repurchases, which will decrease the number of common shares and thereby raise their value.11

Some analysts have taken a more cautious approach. Jefferies fears risks “largely related to the economy” and, following negative responses on store manager and pricing surveys, is “moving to the sidelines” to wait for clearer signals from consumers.[12] Hapoalim Securities is unimpressed by recent sales growth, noting that “input costs likely increased at a higher rate during the quarter,” and warns of the impact of “emerging competitive threats” in reference to the entrance of Tesco in 2007.[13]

[1] Fundamentals, Investor Relations, Last accessed May 31, 2011.

[2] 2011 Top 75 North American Food Retailers, Supermarket News, Last accessed April 29, 2011.

[3] Safeway, Inc., February, 2011 Form 10-K.

[4] Safeway (SWY), Wikinvest, Last accessed May 31, 2011.

[5] 2010 Factbook, Safeway, (2010).

[6] “Annual Financial Review.” Food Marketing Institute (2007).

[7] Yahoo Finance, Last accessed June 1, 2011.

[8] “Grocery Distribution Analysis and Guide.” Metro Market Studies (2010).

[9] “America’s Highest Paid Chief Executives.” Forbes (2011).

[10] Deutsche Bank, May 26 2011

[11] Citigroup, April 28 2011

[12] Jefferies, April 27 2011

[13] Hapoalim Securities, April 25 2011

SUPERVALU

Supervalu is the third largest conventional supermarket operator in the U.S., and the fifth largest food retailer after Walmart, Kroger, Costco, and Safeway. Supervalu is also a wholesaler, providing supply chain services to third-party retailers.

Store count

Store Type Count as of 2/26/2011 (end of fiscal year 2010)
Conventional supermarkets 1,114
Corporate-owned Save-a-Lot hard discount stores 381
Licensed Save-a-Lot hard discount stores 899
Total 2,394

 

(Source: Supervalu’s 10-K report for fiscal year 2010, Part I Item 1, p. 6)

Key Banners

Acme, Albertsons, Cub Foods, Farm Fresh, Hornbacher’s, Jewel-Osco, Lucky, Shaw’s, Shop ‘n Save, Shoppers Food & Pharmacy, Star Market (conventional supermarkets); Save-a-Lot (hard discount format).

(Source: Supervalu’s 10-K report for fiscal year 2010, Part I Item 1, p. 6)

Supply Chain Services

Supervalu is the largest publicly traded food wholesaler in the U.S., with customers in 47 states. Supervalu is the primary supplier to 1,900 third-party retail stores and a secondary supplier to 800 third-party retail stores

(Source: Supervalu’s 10-K report for fiscal year 2010, Part I Item 1, p. 6)

Employees

  • As of 2/26/2011, Supervalu had 142,000 employees, with 88,000 covered by collective bargaining agreements. Note: the company does not break out employees by segment (retail and supply chain). (Source: Supervalu’s 10-K report for fiscal year 2010, Part I Item 1, p. 8)
  • According to the Contract Directory, the UFCW represents 92,000 Supervalu employees. (Source: UFCW Contract Directory)

Financial Performance

Sales. Companywide sales were $37.6 billion in fiscal year 2010, up 0.4% from $37.4 billion in 2006. Retail sales were $28.9 billion, or 77% of total sales in 2010, up 3.2% from 28.0 billion (74.9% of total sales) in 2006. (Source: Standard & Poor’s Compustat database)

Operating profits. Profits from operations of the company (prior to paying interest on debt and taxes) were negative $976 million in 2010, while operating profits from the retail stores were negative $1,212 million. The operating loss from the retail segment was partly offset by operating profit from the supply chain segment. This compares to an overall operating profit of $1.4 billion and a retail operating profit of $1.18 billion in 2006. However, it is important to note that excluding the impact of a one-time charge for impairment of the company’s goodwill and intangible assets (in everyday terms, loss of value of the company’s brand and intellectual property), Supervalu had an operating profit of $870 million in 2010. (Source: Standard & Poor’s Compustat database)

Net profits. Supervalu made a net loss of $1.5 billion in 2010. (Source: Standard & Poor’s Compustat database)

The reasons for Supervalu’s poor profitability. As noted above, Supervalu would have been in the black last year but for the one-time charge for goodwill and intangible asset impairment. Of greater concern going forward is the fact that, even adjusted for this one-time charge, operating profits of $870 million were 37.7% less than their level five years ago. As a percentage of sales, operating profits declined from 3.73% in 2006 to 2.32% (excluding the impairment charge) in 2010. The declining profitability is attributed to growing operating costs, which increased by more than 12% over a five-year timeframe while sales grew by only 0.4%. Part of the growth in operating costs is due to the cost of closing non-performing stores. (Source: Standard & Poor’s Compustat database; Supervalu’s 10-K report for fiscal year 2010, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, p. 22)

Same store sales growth. Same store sales growth, or growth in sales at stores open for at least a year, is a key measure of retail sales growth since it shows how much a retailer is able to grow sales from an existing store base (excluding new store openings and mergers and acquisitions). Supervalu’s same store sales were negative 6% in the last fiscal year, negative 5% in the last quarter, and have been consistently negative for the last three fiscal years. The company attributes its negative same store sales to competitive pressure on prices and the weak economy. (Source: Standard & Poor’s Compustat database; Supervalu’s 10-K report for fiscal year 2010, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, p. 20)

Debt levels. Supervalu’s agreement with a consortium of creditors requires it to maintain certain ratios for measuring indebtedness within prescribed values. The prescribed values and the current values (as of the end of the last quarter) for the two ratios set out in the credit agreement are shown below.

 

Debt ratio Prescribed value Current value
(EBITDA+rental expense)/(interest expense+rental expense) ≥2.20 2.23
Total debt/EBITDA ≤4.25 3.76

As shown, Supervalu is within the levels prescribed by creditors for its debt ratios.  Even though the company has high debt levels, it does not appear to be in any imminent danger of default. (Source: Standard & Poor’s Compustat database; Supervalu’s 10-Q report for quarter ended 9/11/2010, Exhibit 10.2, Amended and Restated Credit Agreement dated as of April 5, 2010)

Stock price. As of the close of the trading day on June 23, 2011, Supervalu’s stock traded at $8.77, which was 71% lower than its price of $30.12 five years earlier. By comparison, the S&P 500 index rose by 3.1% over the same period. (Source: Yahoo Finance)

Market shares in key metropolitan markets

Supervalu has leading market shares in a number of major metropolitan areas. The following are all the top 20 markets by population in which Supervalu operates (excluding markets in which they operate solely their hard discount Save-a-Lot format):

Metropolitan market Supervalu share (%) Supervalu rank
Los Angeles-Long Beach-Santa Ana, CA 10.2% 4
Chicago-Naperville-Joliet, IL-IN-WI 35.6% 1
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 19.1% 1
Washington-Arlington-Alexandria, DC-VA-MD-WV 8.1% 3
Boston-Cambridge-Quincy, MA-NH 19.0% 2
Riverside-San Bernardino-Ontario, CA 10.7% 3
Seattle-Tacoma-Bellevue, WA 8.5% 4
Minneapolis-St. Paul-Bloomington, MN-WI 22.8% 1
San Diego-Carlsbad-San Marcos, CA 17.1% 2
St. Louis, MO-IL 20.5% 2
Baltimore-Towson, MD 9.2% 1

 

This shows that Supervalu enjoys strong market positions in a number of major metropolitan markets. (Source: Metro Market Studies, 2010)

Executive Compensation

Supervalu has not yet released its Proxy Statement for its latest fiscal year, so the following discussion is based on fiscal year 2009 numbers.

  • In fiscal year 2009, Supervalu CEO Craig Herkert made $10.79 million in total compensation, and the five most highly paid executives made a combined total of $18.8 million. (Source: Supervalu’s Proxy Statement for 2010 Shareholders’ Meeting, Summary Compensation Table, p. 33)
  • Assuming 40 hours per week for 52 weeks in the year, Herkert’s equivalent hourly rate of pay in fiscal year 2009 was $5,188.
  • In fiscal years 2008 and 2009, the company’s sales growth was 1.2% and negative 8.9%, respectively, and net profit margin was negative 6.4% and under 1% respectively. While Supervalu executives were getting paid handsomely, the company’s financial performance was poor. (Source: Standard & Poor’s Compustat database)

Dividends

Supervalu paid $74 million in cash dividends to shareholders in fiscal year 2010, and a combined $349 million in dividends in fiscal years 2008 through 2010.  As observed earlier, over the entire period, the company’s financial performance was poor. (Source: Standard & Poor’s Compustat database)

What Wall Street thinks of Supervalu

Here is a sampling of what some key Wall Street investment analysts think of Supervalu’s financial performance and competitive position:

  • “We were impressed with the company’s ability to control gross margin. However, we remain concerned about [Supervalu]’s ability to compete in a highly price competitive food retail environment, particularly given the company’s worse-than-expected IDS [identical store sales].” (Citigroup Global Markets, 4/15/2011)
  • “Yesterday, Supervalu reported a better-than-expected EPS [earnings per share] of $0.42 (once we adjust for one time and normalize the tax rate) and provided better-than-expected FY [fiscal year] 2012 guidance…. the company faces very manageable debt maturities for the next several years, so we see little downside to the stock from these levels based on liquidity concerns despite structural challenges.” (BMO Capital Markets, 4/15/2011)
  • “…it is clear that some of [Supervalu]‘s initiatives are lowering costs and protecting gross margin, if not yet helping sales. Much remains uncertain, however… We remain on the fence….” (Barclay’s Capital Equity Research, 4/15/2011)

AHOLD

Ahold is the 18th largest food retailer in the world, and the 8th largest food retailer in the U.S.  The company’s core business operations are in the Netherlands, Czech Republic, Slovakia, and the eastern U.S.

Source: Supermarket News

Store Count

Worldwide

Country

Count as of 1/2/2011 (end of fiscal year 2010)

United States

751

Netherlands

1,914

Czech Republic

279

Slovakia

26

Source: Ahold.  Annual Report 2010, p. 19 and 23.

United States

Banner

Count as of 1/2/2011 (end of fiscal year 2010)

Stop & Shop

392

Giant Landover

179

Giant Carlisle

180

Source: Ahold.  Annual Report 2010, p. 25.

Key Banners

Europe
Albert Heijn, Albert Heijn XL, AH to Go, Etos, Gall & Gall, Albert, Hypernova, Albert.nl.
 
United States
Stop & Shop (union), Giant Food (union), Giant Food Stores (nonunion), Martin’s Food Markets (nonunion), Peapod (union).

Source: Ahold.  Annual Report 2010, p. 21-27.

Employees

As of January 2, 2011, Ahold had 213,000 employees around the world, with 115,993 of these working in the U.S.  According to the contract directory, the UFCW represents 70,076 Ahold employees.

Source: Ahold.  Annual Report 2010, p. 25; and UFCW Contract Directory.

Financial Performance

Sales Companywide sales were $39.18 billion in fiscal year 2010, up 9.4% from $35.80 billion in 2008.  U.S. sales were $23.52 billion in 2010, or 60% of total sales in 2010, up 13.3% from $20.77 billion in 2008.

Source: (Standard & Poor’s Compustat Database; and Ahold.  4Q and Full Year 2010 Summary Report)

Operating Profits Company-wide operating profits were $1.77 billion in fiscal year 2010, up 2.7% from $1.73 billion in 2008.  U.S. operating profits were $941 million, or 53% of total operating profit in 2010, up 4.8% from $897.78 million in 2008.

Source: (Standard & Poor’s Compustat Database; and Ahold.  4Q and Full Year 2010 Summary Report)

Net Profit Ahold made a net profit of $1.13 billion in 2010.

Source: (Standard & Poor’s Compustat Database)

Operating Profit Margin Ahold’s company-wide profit margin was 4.52% in 2010.  The company’s U.S. banners had a profit margin of 4.00% in 2010.

 

Ahold Group

($ millions)

2008

2009

2010

Sales

35,802.45

40,022.11

39,183.36

Operating Profit

1,725.96

1,858.86

1,772.74

Net Profit

1,494.90

1,281.28

1,131.85

Operating Profit Margin

4.82%

4.64%

4.52%

Net Profit Margin

4.18%

3.20%

2.89%

Ahold USA

($ millions)

2008

2009

2010

Sales

20,765.76

23,503.05

23,523.00

Operating Profit

897.776

1120.762

941.00

Operating Profit Margin

4.32%

4.77%

4.00%

 

Market Shares in Key Metropolitan Areas

Metropolitan Market

Banner

Ahold Market Share (%)

Rank

Boston, MA

Stop & Shop

23.1

1

Hartford, CT

Stop & Shop

37.6

1

Providence, RI

Stop & Shop

39.3

1

New York, NY

Stop & Shop

12.9

1

Philadelphia, PA

Giant/Martin’s

10.9

2

Baltimore, MD

Giant Food

22.1

1

District of Columbia

Giant Food and Giant/Martin’s

31.7

1

Source: Metro Market Studies, 2010.

This shows that Ahold is the market leader in a number of major metropolitan areas.

Executive Compensation

In fiscal year 2010, Ahold CEO Dick Boer made $2.73 million in total compensation, of which $1.62 million was in direct compensation (direct compensation excludes share-based and pension compensation).

Share Buyback

Following the completion of its one-year €500 million share buyback program in FY 2010, Ahold began a new 18 month €1 billion share buyback program in March 2011.

Source: Ahold.  “Ahold Completes €500 mln Share Buyback,” in Press Releases, February 25, 2011; and Ahold.  “Ahold Commences €1 billion share buyback program,” in Press Releases, March 7, 2011.

Dividends

Ahold paid $360.92 million in cash dividends to shareholders in fiscal year 2010.

Analyst Commentary

“Ahold has undergone a major turnaround over the last five years…. Since management changes in 2006 the group has strengthen[ed] the balance sheet significantly and restructured the main U.S. supermarket chains, Stop & Shop and Giant Landover, focusing on price, range and service. As the group enters growth phase, the debate centres around how the strong cash balances will be put to use.”  Jefferies, March 3, 2011

“While the group’s operating companies in general have sound free cash generation and leading market share positions, what needs to be addressed is how these operations, in particular those in the U.S., should shift towards faster growth by means of expansion….In our view, Ahold has all the tools at hand and a balance sheet to support it becoming once again the high flyer that it once was with a corresponding valuation. We believe it is up to the new management team, all with a retailing background, to seize these opportunities.”  ING, February 8, 2011

“…although the Q410 numbers were weak, we thought the outlook message was cautiously optimistic – Ahold seems reasonably confident of again balancing sales/margins during 2011 and achieving its 5%/5% sales growth/margin targets even if the current tough trading conditions prevail.” Credit Suisse, March 7, 2011

 

LOBLAW COMPANIES

1 President’s Choice Cir.
Brampton, Ontario L6Y 5S5, Canada
http://www.loblaw.com

Loblaw is the largest food retailer in Canada.

Store Count

Loblaw operates 576 corporate owned and 451 franchised stores across Canada, totaling 1,027 stores as of January 1, 2011, the end of fiscal year 2010. (Source: Loblaw 2010 Annual Report, p. 1.)

Key Banners

Atlantic Cash & Carry, Atlantic Superstore, Atlantic SuperValu, club entrepot, Dominion, Extra Foods, Fortino’s, Les Entrepots Presto, Liquorstore, Loblaws, Loblaw Greatfood, Maxi, Maxi & Cie, NG Cash & Carry, nofrills, Provigo, Real Canadian Superstore, Loblaw Superstore, Osaka Supermarket, SaveEasy, T&T Supermarket, ValuMart, Wholesale Club, Your Independent Grocer, Zehrs and Zehrs Greatfood. (Source: Loblaw 2010 Annual Report, p. 1.)

Private Labels

Loblaw is known for its strong portfolio of private brands, including President’s Choice, no name, and Joe Fresh. (Source: Loblaw 2010 Annual Report, p. 1.)

Ownership

  • Loblaw is traded on the Toronto Stock Exchange under the symbol L. (Source: Loblaw Website, http://www.loblaw.ca/English/Investor-Centre/Stock-Information/default.aspx)
  • As of March 17, 2011, a controlling interest in the company (62.9% of outstanding common stock) was held by George Weston Limited, a company controlled by Executive Chairman W. Galen Weston (the Canadian equivalent of CEO). In addition, Mr. Weston held another 1.3% of common stock, for a total of 64.2% of outstanding common stock controlled by the CEO. (Source: Loblaw Companies Limited, Management Proxy Circular for May 5, 2011 Annual Meeting, p. 3)

Employees

  • Loblaw had more than 136,000 employees (including employees of franchised stores) at the end of fiscal year 2010. (Source: Loblaw 2010 Annual Report, p. 1.)
  • The UFCW represents more than 70,000 Loblaw workers. (Source: UFCW Contract Directory)

Financial Performance

Sales. Company-wide sales in fiscal year 2010 were $30,997 million (Canadian), up 0.6% from $30,802 million in fiscal year 2008. (Source: Loblaw 2010 Annual Report, p. 3)

WAKEFERN FOOD CORPORATION

600 York Street
Elizabeth, NJ 07207
http://www.shoprite.com

Wakefern is the largest retailer-owned cooperative in the U.S.  It is owned by 46 member companies who operate supermarkets under the ShopRite banner. (Source: Wakefern Website, http://www.shoprite.com/cnt/wakefern/WFC_TheCooperative.html)

Store Count and Banners

  • More than 220 ShopRite stores are located in NY, NJ, CT, PA, DE, and MD.
  • 28 of these stores are corporate-owned and the rest are owned by member companies.
  • More than 40 corporate-owned PriceRite stores are located in CT, MA, RI, NY, and PA.

(Source: Wakefern Website, http://www.shoprite.com/cnt/wakefern/WFC_Retail.html)

Employees

  • ShopRite stores and the parent cooperative Wakefern collectively have about 50,000 employees. (Source: ShopRite Website, http://www.shoprite.com/cnt/ShopRiteToday.html)
  • The UFCW represents more than 22,000 ShopRite workers. The PriceRite banner is non-union. (Source: UFCW Contract Directory)
  • Company management is aggressively resisting workers’ efforts to organize with the UFCW at PriceRite stores – please visit Wakefern Workers United for more information.

Sales

2009 sales were $11.7 billion, a 10.4% increase over the prior year. (Source: “Wakefern Expanding ShopRite Banner in Maryland,” Food World, June 2010)

 

THE GREAT ATLANTIC & PACIFIC TEA COMPANY

2 Paragon Drive
 Montvale, NJ 07645
 http://www.aptea.com
Great  Atlantic & Pacific, operating under the banners A&P, Super  Fresh, Sav-A-Center, Farmer Jack, Waldbaum’s, Super Foodmart, Food  Basics, Best Cellars, Pathmark, and the Food Emporium, is the 22nd largest food retailer in North America in the Supermarket News rankings for 2011.
Store Count
Great Atlantic & Pacific operates 365 stores. (Source: APTEA.com)
Ownership
Were  they to convert preferred stock into common stock, Tengelmann, a German  retail company, and Yucaipa, a Los Angeles-based holding company, would  control 40% and 29%, respectively, of voting interest. (Source: Yahoo Finance, Great Atlantic and Pacific Company Profile)
Employees
Great  Atlantic & Pacific employs 39,000 workers, of which 35,394, or 91%  of total, are represented by the UFCW. Approximately 92% of the workers  are covered by collective bargaining agreements. (Sources: Great  Atlantic & Pacific 10-K, 2010; UFCW Contract Directory)
Finances
Sales.  In 2010, Great Atlantic & Pacific generated just over $8 billion in  sales, nearly 50% higher than $5.4 billion in 2006. (Source: Yahoo Finance, Great Atlantic and Pacific Company Profile)
Profits.  The company has been registering net income in the red since 2007, when  it had $161 million in losses. In 2010, it lost nearly $600 million. In  December of 2010, Great Atlantic & Pacific filed for Chapter 11  bankruptcy due to an overwhelming debt load of more than $3.2 billion  and internal management difficulties. That same year, the company paid  out $10.5 million in Preferred Stock dividends. (Sources: Great Atlantic  & Pacific 10-K, 2010; Yahoo Finance, Great Atlantic and Pacific Company Profile)
Debt.  The company’s debt has grown without interruption since 2006, when  Great Atlantic & Pacific paid out $65 million in interest payments.  In 2010, $218 million was paid out in interest payments. (Source: Great  Atlantic & Pacific 10-K, 2010)

GIANT EAGLE

101 Kappa Drive
Pittsburgh, PA 15238
http://www.gianteagle.com

Giant Eagle is the 20th largest retail food company in the U.S. with stores in Pennsylvania, Ohio, Maryland, and West Virginia.  Giant Eagle is also a wholesaler, providing supply chain services to franchisees and other third-party retailers.

(Source: Supermarket News and Hoovers In-Depth Records)

Stores and Banners

Giant Eagle operates stores under the following three banners: Giant Eagle, Valu King, and Market District.  A number of locations also operate GetGo gas stations and convenience stores.

The store counts are as follows:

Excluding Giant Eagle’s 159 GetGo fuel stations and convenience stores, the total store count for the company is 228.

(Source: Supermarket News, SN Top 75, 2011; Chain Store Guide Store Locations Database, Feb. 2011)

Employees

  • As of 2009, Giant Eagle had an estimated 36,000 corporate employees.  (Source: Hoover’s Company Records for Giant Eagle)
  • The UFCW represents 24,322 Giant Eagle workers in corporate-owned and franchise stores. (Source: UFCW Contract Directory)

Sales

Giant Eagle is the 20th largest food retailer by sales in the US, with estimated 2010 revenues of $8.6 billion.  (Source: Supermarket News, SN Top 75, 2011)

 

ROUNDY’S SUPERMARKETS, INC. 875 E. Wisconsin Ave.
Milwaukee, WI 53202
http://www.roundys.com

Roundy’s is a regional supermarket company in Wisconsin, Minnesota, and Illinois.

Store Count and Banners

Roundy’s operates stores under the following five banners: Pick ’n Save, Copps, Rainbow Foods, Metro Market, and Mariano’s Fresh Market. (Source: Roundy’s Website, http://www.roundys.com/Home.gsn).

The stores counts are as follows:

  • 94 stores under the Pick ’n Save banner in Wisconsin. (Source: Pick ’n Save Website, http://www.picknsave.com/StoreLocator.aspx)
  • 26 stores under the Copps banner in Wisconsin. (Source: Copps Website, http://www.copps.com/StoreLocator.aspx)
  • 36 stores under the Rainbow Foods banner in Minnesota. (Source: Rainbow Website, http://www.rainbowfoods.com/StoreLocator.aspx)
  • 3 stores under the Metro Market banner in the Milwaukee metropolitan area in Wisconsin. (Source: Metro market Website, http://www.metromarket.net/StoreLocator.aspx?hold=true)
  • A single store under the Mariano’s Fresh Market banner in the Chicago metropolitan area in Illinois. (Source: Mariano’s Fresh Market Website, http://www.marianosfreshmarket.com/StoreLocator.aspx?hold=true)

The total store count for the company is 160.

Ownership

  • Roundy’s is owned by private equity firm Willis Stein and Partners. (Source: Willis Stein Website, http://www.willisstein.com/tem_respro.aspx?men=4&smen=1&ssmen=)
  • Willis Stein is rumored to be attempting to sell Roundy’s, and has hired Moelis & Co. and Credit Suisse as investment bankers to assist in the deal. Industry observers are speculating that Kroger, Safeway, or Schnuck are potential buyers. (Source: “Roundy’s Supermarkets for Sale,” Supermarket News, 3/22/2011)

Employees

  • Roundy’s has an estimated 18,000 employees. (Source: Hoover’s Company Records for Roundy’s, 5/31/2011, downloaded from Lexis-Nexis.)
  • The UFCW represents almost 8,700 Roundy’s workers. (Source: UFCW Contract Directory)

Sales

Roundy’s is the 36th largest food retailer by sales in the U.S. and Canada, with estimated 2010 revenues of $3.8 billion. (Source: Supermarket News, SN Top 75, 2011)

PATHMARK STORES, INC.

200 Milik St.
Carteret, NJ 07008
http://www.pathmark.com

Pathmark Stores, Inc., is a supermarket chain in New York, New Jersey and Philadelphia metropolitan areas, operating as a single segment. The company operated 140 supermarkets located in New Jersey, New York, Pennsylvania and Delaware in FY 2006. Many of its stores are Pathmark Super Centers, which offer an expanded selection of general merchandise and foods. Nearly all Pathmark Super Centers have pharmacies, and more than half have in-store banks.

The supermarket chain briefly operated under Chapter 11 bankruptcy in mid -2000, emerging after two months as a public company and $1 billion lighter in debt. The Yucaipa Companies, led by supermarket investor Ron Burkle, acquired 48 percent of Pathmark’s shares in 2005. A&P, Pathmark’s rival in the Northeast, has agreed to acquire the chain for about $1.3 billion in a deal that will create a 550-store supermarket chain. Pathmark generated about $3.97 billion in net sales during FY 2006.

Approximately 19,748 of Pathmark’s 22,400 employees are represented by the UFCW.

 

STATER BROS. HOLDINGS INC.

21700 Barton Rd.
Colton, CA 92324
http://www.staterbros.com

Stater Brothers is the 37th largest food retailer in North America in the Supermarket News rankings for 2011, and a major regional operator in Southern California.

Store Count

Stater Brothers operates 167 stores. (Source: “Stater Bros. Announces Purchase of Hesperia Albertsons Location,” Stater Bros. press release, 3/18/2011)

Ownership

Stater Brothers Markets is a wholly owned subsidiary of Stater Bros. Holdings Inc.  La Cadena Investments, a California general partnership whose sole voting partner is the Jack H. Brown Revocable Trust, holds all of the equity in Stater Bros. Holdings Inc.  Jack H. Brown, the CEO of Stater Brothers, is the managing general partner of La Cadena, with sole voting power. (Source: Stater Bros. Holdings Inc.’s 10-K report for fiscal year 2010, Part I Item 1, p. 3)

Employees

  • Stater Brothers has 18,000 employees. (Source: “Stater Bros. Announces Purchase of Hesperia Albertsons Location,” Stater Bros. press release, 3/18/2011)
  • More than 12,500 Stater Brothers workers are represented by the UFCW. (Source: UFCW Contract Directory)

Finances

Sales. Stater Brothers had fiscal year 2010 sales of $ 3,607 million, up 2.8% from 2006 sales of $ 3,509 million. (Source: Standard & Poor’s Compustat database)

Profits. Stater Brothers had fiscal year 2010 profits of $ 24.6 million, down 5.7% from 2006 profits of $ 26.1 million. (Source: Standard & Poor’s Compustat database)

 

RALEY’S INC.

500 W. Capitol Ave.
West Sacramento, CA 95605
http://www.raleys.com

Raley’s is the 43rd largest food retailer in North America in the Supermarket News rankings for 2011, and a major regional operator in Northern California, with a few stores in Nevada.

Banners and Store Count

  • 11 stores under the Aisle 1 banner (10 in CA and 1 in NV).
  • 21 stores under the Bel Air banner (all in CA).
  • 8 stores under the Food Source banner (6 in CA and 2 in NV).
  • 22 stores under the Nob Hill Foods banner (all in CA).
  • 84 stores under the Raley’s banner (70 in CA and 14 in NV).

Total store count is 146 (129 in CA and 17 in NV).

(Source: Raley’s Website, http://www.raleys.com/www/stores_list.jsp)

Employees

  • Raley’s has 13,400 employees. (Source: Hoover’s Company Records for Raley’s, 6/7/2011, downloaded from Lexis-Nexis.)
  • Approximately 10,000 Raley’s employees are represented by the UFCW. (Source: UFCW Contract Directory)

Sales

Estimated 2010 sales were $3.0 billion. (Source: Supermarket News, SN Top 75, 2011)

 

SAVE MART SUPERMARKETS

1800 Standiford Ave.
Modesto, CA 95350

Save Mart Supermarkets, operating under the banners Save Mart, S-Mart Foods, Lucky, and FoodMaxx, is the 31st largest food retailer in North America in the Supermarket News rankings for 2011.

Store Count

Save Mart operates 241 stores and several warehouses and distribution centers in California and Nevada, as well as an in-house trucking firm. (Source: Savemart.com)

Ownership

CEO Robert Piccinini is the primary owner of the company. All of the equity is owned by the corporate officers.

Employees

Save Mart employs 20,580 workers, of which 6,677, or 32% of total, are represented by the UFCW. (Sources: UFCW Contract Directory; Hoover’s, Save Mart Supermarkets)

Finances

In 2009, Save Mart generated $4.9 billion in sales. (Source: Yahoo Finance, Save Mart Supermarkets Company Profile)

DIERBERGS MARKETS INC.

16690 Swingley Ridge Rd.
Chesterfield, MO 63017
http://www.dierbergs.com

Dierbergs operates under the banners Dierbergs Market, Central Design, and Central Kitchen in the Twin Cities and surrounding area.

Store Count

Dierbergs operates 23 stores. (Source: Chain Store Guide ,2010)

Ownership

The Dierberg family continues to own and operate the company.

Employees

Dierbergs employs approximately 4,000 workers, of which 2,857, or 71% of total, are represented by the UFCW. (Sources: Biggest Employers; UFCW Contract Directory)

Sales

In 2010, Dierbergs generated $675 million in sales. (Source: Chain Store Guide, 2010)

 

LUND FOOD HOLDINGS, INC.

4100 W. 50th St., Ste. 2100
Minneapolis, MN 55424
http://www.lundsmarket.com

Lund Food Holdings operates upscale stores under the banners Lunds and Byerly’s in the Twin Cities and the surrounding area.

Store Count

Lund Food Holdings operates 21 stores. The company doubled in size merging with Byerly’s in 1997 and is set for further expansion, having recently announced plans to launch an additional Lunds in downtown Minneapolis. (Source: Lundsandbyerlys.com)

Ownership

Chairman and CEO Russell T. Lund, III is the primary owner of Lund Food Holdings. (Source: MPSC, Inc. About Us)

Employees

Lund Food Holdings employs approximately 3,300 workers, of which the vast majority – 3,144, or 95% of total – are represented by the UFCW. (Sources: LexisNexis® Corporate Affiliations, 2011; UFCW Contract Directory)

Sales

In 2010, Lund Food generated $488 million in sales. (Source: Zoom Company Information, 2011)

 

OVERWAITEA FOOD GROUP

19855-92A Ave.
Langley, British Columbia V1M 3B6, Canada

Overwaitea, operating under the banners Overwaitea, Save-On Foods, Cooper’s Foods, PriceSmart Food, and Urban Faires, is the 42nd largest food retailer in North America in the Supermarket News rankings for 2011.

Store Count

Overwaitea operates 120 stores throughout Canada as well as its Bulkley Valley wholesale operation, which supplies more than 1,800 stores. (Source: Yahoo Finance, Overwaitea Company Profile)

Ownership

Overwaitea is owned in-whole by the Tim Pattison Group, which is owned and operated by Canadian business magnate Tim Pattison.

Employees

Approximately 14,250 workers are employed by Tim Pattison Group’s Overwaitea division, of which 9,377, or 66% of total, are represented by the UFCW. (Sources: Zoom Company Information, May 2011; UFCW Contract Database)

Sales

In 2010, Overwaitea generated $2.85 billion in sales, up 78% from $1.6 billion in 1999. (Source: Zoom Company Information, May 2011)

 

SCHNUCK MARKETS, INC.

Schnuck, operating under the banners Schnucks, Culinaria, Logli, and Focus on Design, is the 49th largest food retailer in North America in the Supermarket News rankings for 2011.

Store Count

Schnuck operates 119 stores throughout the Midsouth and Midwest. (Source: Schnucks Store Directory)

Ownership

The company remains family-owned and is now operated by the five members of the fourth generation.

Employees

Schnuck employs 15,600 workers, of which 11,244, or 72% of total, are represented by the UFCW. (Sources: UFCW Contract Directory; Hoover’s, Schnuck Markets)

Sales

In 2010, Schnuck generated approximately $2.2 billion in sales. (Source: Chain Store Guide, 2010)