WILLIAMSVILLE, N.Y. — Two independent, long-time grocery store chains have announced an agreement to merge, nearly doubling both of their collective footprints in the northeast US.
Tops Markets and Price Chopper/Market 32 will bring together two New York-based chains with deep ties to the communities they serve. Price Chopper/Market 32 operates 130 Price Chopper and Market 32 grocery stores and one Market Bistro in New York, Vermont, Connecticut, Pennsylvania, Massachusetts, and New Hampshire. The Schenectady-based chain was founded in 1932 by the Golub family.
With headquarters in Williamsville, Tops Markets is the largest private for-profit employer in WNY with 14,000 associates and operates 162 stores in New York, Pennsylvania and Vermont.
“We have long believed that this merger makes sense both strategically and based on the similar ways in which we each put customers first, go to market and treat our people,” said Frank Curci, Tops Markets Chairman and CEO. “We look forward to working closely with the Price Chopper/Market 32 team and together becoming an even stronger competitor with more scale, as we continue serving our customers and communities.”
Retail consultants say they don't expect to see many changes in stores right away. They say it's really a strategic move because other hungry supermarket chains were circling and Tops gets to keep its brand identity as the chains line up with a contiguous fit and get more combined pricing power.
Burt Flickinger III of Strategic Resource Group tells 2 On Your Side, "They can use their procurement power, their size, their scale to create a top five food retailer."
Jack Ampuja is a Niagara University educator and executive who specializes in supply chain analysis. He adds, "Now we've got a $6 billion buy so they're gonna put a lot of pressure on to the suppliers for more efficiencies and lower prices so long haul that to me says better buying, better experience, more dollars to put into the chain in terms of store upgrades and so on."
Flickinger says you might see some more Western New York produced hometown brands filter in as well. Each firm has its separate warehouse distribution system which could be enhanced. Tops operates its facility in Lancaster.
And Flickinger says there's digital or even paper coupons that still draw shoppers and that could be emphasized more-so. He expects this combined retailer to be "very competitive as a low price leader, compete very effectively on price, and powerful promotional programs versus the super centers, the warehouse clubs, and the hard discounters."
Flickinger expects the Tops Friendly Markets brand name to be retained as it still carries a strong connection with shoppers in New York State.
Ampuja also points out that Price Chopper may eventually use the more upscale line of its market chain called Market 32 (after 1932 when the Golub family firm was founded) to raise its image above the lower price tradition and perhaps appeal more to the middle ground shopper. He feels there may be room in that segment as competitor Wegmans has tried to press its image with new locations in higher income areas.
Both consultants also note that Tops has used its company owned gasoline stations to pull people into its stores and that trend may pickup with this merger.
"Price Chopper has the best fuel rewards savings program of any chain east of the Mississippi," Flickinger said. "So if Tops has 50 fuel centers, Tops can go up to 100 to 120 fuel centers with Price Chopper capital."
Ampuja notes that the Golub family tried to buy some Tops stores back in 2006 as the chain was being spun off by international retailer Royal Ahold. They were unsuccessful back then. But now they can help clear up some of Tops major debt issues from numerous past sales and dealings, which even lead to a Chapter 11 restructuring bankruptcy in 2018. The firm obviously did emerge successfully and now Ampuja says, "They've been on the hunt for this thing for a long time and so I'm sure they've got a very definitive plan on how they want to manage this acquisition."
Both consultants do point out that Price Chopper has a somewhat advanced "green energy" approach and that may be applied to Tops stores in the future. That may include LED lighting and smart systems which would lower lighting in a vacant store aisle and then brighten it as a customer approaches. There are also suggestions for more solar energy applications as cost - cutting efficiencies.
It is interesting to note that Tops is a unionized company while Price Chopper has resisted labor union organizing in the past. Local One of the United Food and Commercial Workers Union did put out a statement.
"UFCW Local One members from Tops Friendly Markets are not immune to changing management groups over the past 15 years. They have certainly been on a roller coaster ride hanging on in fear of what would happen to their job at each management milestone," said Frank C. DeRiso, President of UFCW Local One.
"Through all these changes of management, a bankruptcy and a global pandemic, our members have continued to provide their customers with superior service.
"Our members at Tops Friendly Markets are essential frontline workers, and as always Local One will continue to fight for our members jobs and their livelihoods. Our collective bargaining agreements are in full effect, and have years left before they expire. We will be bargaining with Tops on the Adirondack stores very soon, and expect no issues.
"We will use every legal measure to make sure our members are treated fairly, and we look forward to working with the new management, as we always have, to ensure of members have stable employment."
The new parent company will be based in Schenectady. The Price Chopper/Market 32 and Tops Markets businesses will keep their main offices in Schenectady and Williamsville and will continue to be managed locally by their respective leaders.
There are 300 employees in the Williamsville Tops headquarters. The consultants says it is possible there could eventually be consolidation of some functions like computer systems.
This merger, which the company hopes to wrap up in the comings months, is still subject to approval by the Federal Trade Commission. Flickinger is confident that with political backing of New York state's Congressional delegation it should be approved.
