Is Ukrop’s testing the market for a sale?
- July 29, 2009
This has been a tough year for retail in Richmond. Two of its major home-grown success stories, Circuit City Stores and S&K Famous Brands, have gone out of business. And now it appears that Ukrop’s Super Markets Inc. may be testing the market for a possible sale.
Food World, a grocery trade publication, reported on its Web site that the family-owned chain of 28 Virginia stores has issued a prospectus to gauge interest from bidders. Several potential buyers reportedly have responded, including Minnesota-based Supervalu, Netherlands-based Ahold and Harris Teeter (Ruddick Corp.), based in Matthews, N.C.
Ukrop’s executives aren’t publicly denying the published report about a prospectus, giving credence to the idea that Richmond may lose one of its most iconic institutions. However, CEO Robert S. Ukrop did respond by sending a letter to employees. “There has been a lot of speculation in the last few days about the future of Ukrop’s,” he said. “All of this is based on rumors, anonymous blog postings and industry chatter. Anything I say at this point would just add fuel to the fire.”
Other companies have been interested in buying Ukrop’s for years, “so there’s nothing new here,” he added. “Please know that if anything changes, you will hear it from me and not from the rumor mill … ”
Twenty-five of the chain’s stores are located in the Richmond area, employing more than 3,000 people. The other three stores are in Williamsburg, Roanoke and Fredericksburg. Last year, Food World estimated the Ukrop’s annual sales at $590 million.
The chain began with a single store in 1937. Its stores are not open on Sunday and don’t sell alcohol. Even with these restrictions, Ukrop’s has been Richmond’s grocery store market leader for decades. This year, though, Food Lion — with twice as many stores open seven days a week and beer and wine sales — edged out Ukrop’s for the No. 1 slot. Food Lion captured 19.3 percent of the market’s business while Ukrop’s had 17.5 percent.
A generous community patron, Ukrop’s has sponsored the annual Monument Avenue 10-K race and a Golden Gift program that has distributed more than $12 million to local nonprofits since 1987.
Real estate brokers note that increased competition from big boxes such as Wal-Mart and the recession is hurting Ukrop’s niche as an upscale grocer offering a high level of customer service.