Supervalu and Nash Finch Confident

Discussion
Jul 11, 2003
George Anderson

By George Anderson


The chief executives of Supervalu and Nash Finch in separate conference calls
with analysts expressed confidence that their grocery wholesale operations would
fare well in head-to-head competition with C&S Wholesalers. C&S had
its offer to purchase Fleming’s wholesale business for $400 million recently
approved by the judge presiding over bankruptcy proceedings.


Jeff Noddle, chairman and chief executive officer, Supervalu said C&S’s
core competencies fell short of what former Fleming customers needed from a
wholesaler.


“C&S primarily provides services to large chains, primarily operates in
non-union environments, and does not provide a full suite of support services,”
he said.


Nash Finch’s chief executive, Ron Marshall, echoed the statements of Mr.
Noddle. Calling Nash Finch’s business model different to C&S, Mr. Marshall
added, “C&S is a magnificent logistics services company, but its strength
is dealing with large regional retailers like Pathmark and divisions of Ahold.
However, I don’t think it is particularly good dealing with mid-range and
smaller retail accounts, whereas the entire suite of services offered by us,
Supervalu and Fleming provides something C&S is not capable of providing.”


Moderator’s Comment: How does C&S stack up against
Supervalu and Nash Finch? Do you agree with the assessments of Jeff Noddle and
Ron Marshall?


There isn’t much we’ve found to disagree with
Jeff Noddle and Ron Marshall about.


In this case, however, we question the belief C&S
can only relate to larger regional chains such as Pathmark.


In fact, although it doesn’t offer (at least currently)
the full scope of services of Supervalu or Nash Finch, this might actually work
to the advantage of C&S.


One of the biggest gripes independents have with wholesalers
(generally speaking) is paying for services not rendered. We’re sure some would
find lower fees for actual services preferable to the money currently being
paid out for phantom services.
[George
Anderson – Moderator
]

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