For the first time, M+M Planet Retail has tracked global consolidation in the international food, drink and petrol retail sector over the course of a year.
Compared to the late 1990s, it is fair to say that consolidation is no longer the overriding theme of international grocery retailing. The decade that saw – for example – the merger of Carrefour and Promodès, Wal-Mart’s acquisitive move into Europe and the merger of Albertsons and American Stores, is well and truly over and empire building has given way to a more cautious approach.
North American M&A Trends. After several years of fairly hefty moves in US (Kroger picking up Fred Meyer, Albertsons acquiring American stores, Delhaize absorbing Hannaford, Ahold and Safeway both embarking on significant shopping sprees), it is fair to say that it’s all gone a bit quiet in the States on the grocery M&A front. 2002 has been typified by a great deal of regional moves, with a number of businesses withdrawing from certain geographic areas and selling up to competitors better placed to serve the market. Examples include Kroger snapping up a tranche of Raley’s and Albertsons outlets and Brookshire acquiring 17 outlets from Winn-Dixie. There has also been a great many deals in petroleum/convenience retailing
Another theme has been opportunistic vultures circling bankrupt carcasses, picking off some or all of the overstretched businesses. Apollo Investment took control of Forecourt c-store business Clark Retail; Couche-Tard followed suit with rival c-store operator Dairy Mart; AWG absorbed Homeland Stores and UK-controlled Shaw’s and Dutch business Ahold have both picked up leases/stores from Ames, the defunct department store firm.
For really decisive, aggressive and strategic moves, one has to look towards Wal-Mart acquiring Amigo in Puerto Rico, Save Mart relieving Fleming of a large number of outlets and SuperValu picking up Deal$.
Possible moves in 2003 centre around Safeway – speculation has linked a number of businesses (including Ahold and Kroger) to Safeway’s Dominick’s chain, while H.E. Butt is being touted as a possible suitor for its Tom Thumb chain. In the longer term, it is feasible that Safeway itself might be up for grabs. It is worth noting that Tesco is already involved in its e-commerce operations.
- KC's View:
- This is just a taste of a broader report that M+M Planet Retail will be publishing later this month. It is fascinating stuff…especially in its outlook for what could be happening in the near future.