Supermarket M&A Activity Up

Discussion
Aug 15, 2003
George Anderson

By George Anderson


The Food Institute says merger and acquisition activity was up in the supermarket
industry in the first half of this year compared to 2002.


In all, 20 M&A deals were negotiated in the first six months of 2003, eight
more than the same period a year earlier.


Much of the activity was the result of Fleming’s problems. Roundy’s acquired
31 Rainbow Foods stores as part of a bankruptcy auction of Fleming’s retail
operations.


Spartan Stores sold 17 Foodtown locations in Ohio and Michigan with Kroger
acquiring 13 stores.


Moderator’s Comment: Do you expect to see further consolidation
within the grocery retailing/wholesaling business? Has the wave of consolidation
in past years been a positive for the industry and consumers or a negative?


We clearly remember how many pointed to improved efficiency
and buying power when Safeway, Albertson’s, etc. were picking up chains.


Whether improved efficiencies were gained is debatable.
There’s no debate, however, that acquired businesses such as Dominick’s (and
their customers) were losers as the result of past M&A activity.

[George
Anderson – Moderator
]

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