Ukrop’s selling 25 stores to Ahold unit
- January 27, 2010
Ukrop’s Super Markets Inc. does not open its stores on Sunday or sell beer and wine. Despite those restrictions, the family-owned company was the dominant grocery retailer in the Richmond area for decades.
Last year, Ukrop’s lost its top position to discount grocer Food Lion, and rumors began to swirl that the Ukrop family was looking for a buyer.
Those rumors proved true in December when the company announced it would sell 25 of its 26 supermarkets for $140 million to Giant-Carlisle, a Pennsylvania-based division of the Dutch supermarket group Ahold. Giant-Carlisle plans to keep the stores’ 3,900 workers. The Fredericksburg Ukrop’s store will close.
“They plan to make minimal changes,“ says Robert S. “Bobby” Ukrop, the chairman, president and CEO of Ukrop’s. “Our stores will remain operating as Ukrop’s for the short term.”
The fate of the Fredericksburg store points to the problem Ukrop’s had in expanding outside the Richmond area. In its hometown, Ukrop’s has an untouchable mystique for customer service and community involvement. Shoppers saw the company’s refusal to operate on Sundays and sell alcohol as evidence of its high standards.
But in other markets, customers saw these practices as unnecessary inconveniences. Ukrop’s had closed one of two stores in Williamsburg and a relatively new store in Roanoke.
The Giant-Carlisle deal is expected to close in the first quarter of this year. The Ahold division operates 152 stores in Pennsylvania, Virginia, Maryland and West Virginia under the names of Giant and Martin’s.
The Ukrop family plans to create an independent business based on the grocery chain’s bakery and prepared foods operations. It will primarily serve Giant and Martin’s stores.
The family’s foundation will continue to support Richmond-area community events, including an annual 10-kilometer race on Monument Avenue in Richmond and the city’s Christmas parade.
“Our parents 72 years ago started our company, and since that time the industry has changed,” says James E. “Jim” Ukrop, Bobby Ukrop’s older brother who was the company’s longtime CEO.
Many large-scale competitors have entered the field, he notes, making it more difficult to operate an independent chain. Ukrop says he expects Giant-Carlisle will take what is best about Ukrop’s “and provide it with the necessary resources to compete and to grow.“