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Stop & Shop could close more than 10% of its stores: experts

Stop & Shop could be forced to close more than 10% of its stores in the Northeastern U.S. as shoppers increasingly object to the 110-year-old supermarket chain’s high prices, according to industry experts.

In a surprise announcement last month, the supermarket said it will “make difficult decisions to close select underperforming store locations.”

In addition, JJ Fleeman, CEO of Ahold Delhaize USA, the chain’s owner, said Stop & Shop will make a “major, multi-year price investment” to lure customers back.

“The value proposition and pricing at Stop & Shop are simply not strong enough,” Fleeman admitted during an annual investor meeting.

There are 397 Stop & Shop stores in the Northeast. Roman Tiraspolsky – stock.adobe.com

The result, according to some industry observers: Stop & Shop could close as many as 50 stores — representing more than 12.5% ​​of the chain, which includes 397 locations in Massachusetts, New York, New Jersey, Connecticut and Rhode Island.

“I think Stop & Shop will close between 25 and 50 stores,” industry consultant Brittain Ladd, a former Amazon executive, told The Post.

Burt Flickinger of Strategic Resource Group – a grocery consultant who estimates that Stop & Shop consumers pay between 12% and 14% more than the competition – agreed, saying: “They’re looking at 20 to 35 stores now, but it could be there are just as many.” like 50.”

Dutch food conglomerate Ahold Delhaize — whose U.S. unit also owns Food Lion, Hannaford, Giant Food and The Giant Company — said last month that it has renovated 190 stores, nearly half of its fleet, and that those locations are now performing better.

Of the remaining locations, those serving less affluent neighborhoods are the ones most likely to close, said Joshua Goldberg, a New York investment banker whose family founded Stop & Shop and operated it for 72 years.

“Stop & Shop has always done better in neighborhoods where customers cared less whether a gallon of milk cost $3 or $3.28,” said Goldberg, whose family is no longer involved with the company. “But there are markets where people are paying more attention to their money, and that is where they are closing their stores that have not yet been renovated.”

The supermarket chain is owned by the Dutch conglomerate Ahold-Delhaize. AP

“Stop & Shop is more expensive in almost every market they operate in – and it’s higher quality, too, but now they have to be tighter on prices,” Goldberg added.

“Most of the inflation is gone, except in food, where it is about 5%, and that really irritates people.”

The turmoil at Stop & Shop comes as Walmart is aggressively courting a higher-income consumer. The discount giant gained market share during the pandemic, when inflation rose to 9%, and has been able to retain these new customers, Wall Street analysts say.

Walgreens, Target and Amazon also recently announced price cuts on thousands of items, including diapers, pet food, groceries and toiletries, to lure back customers on a budget.

JJ Fleeman, the CEO of the company’s U.S. division, announced the store closures at an investor day in May. Hollandse Hoogte/Shutterstock

“Underperforming due to inflated prices,” one reader wrote last week in response to The Post’s report on the store closures. Another customer wrote: “They need to lower their prices and maybe they would do better. 4 bags of groceries at Stop & Shop = $200. 4 bags at Trader Joe’s = $150 and the quality is better.”

Stop & Shop is also losing customers because of the quality of its meat, according to John T. Nicollai of UFCW, president of local 464A, which represents employees at 60 stores in New York and New Jersey.

Several years ago, the company downsized the meat departments in its stores after it started purchasing pre-packed cuts of meat from a supplier.

Stop & Shop is among a growing number of major retailers cutting prices amid stubbornly high inflation. Paul Martinka

These packages are treated with preservatives to retain their red color longer than the meat is viable, says Nicollai, who was featured in a 2019 Inside Edition investigative report on packaged meat.

“Meat department sales were down double digits,” Nicollai told The Post. “And overall store volume fell by single digits after the company” outsourced its butchery functions.

Stop & Shop did not respond to questions about the supermarket chain’s meat department.

“We are committed to continuing to invest in our stores – as well as our prices – to provide our customers with a great shopping experience and great values,” Stop & Shop said in a statement. “Stop & Shop will make some difficult decisions to close select underperforming store locations to help ensure the long-term health and future growth of our business.”

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