Tops Markets files for Chapter 11 bankruptcy protection
In an effort it said is directed at reducing its debt load, Tops Markets on Wednesday filed for Chapter 11 bankruptcy protection as part of a financial restructuring. The Williamsville, N.Y.-based operator of 169 supermarkets and five franchise stores said that it has received sufficient funding to keep it liquid enough to support its operations as it completes a restructure.
Tops said that the operations would be funded through a $125 million debtor-in-possession term loan financing facility from certain noteholders, as well as $140 million DIP asset-based revolving loan from Bank of America. The company expects to receive court approval to use these funds to support operations as it completes a court-supervised restructuring process. Tops also said that it intends to pay vendors and suppliers in full under normal terms for goods and services provided after the filing.
“We believe the financing that we received from our noteholders is a vote of confidence in our business,” Tops CEO Frank Curci said. “Our operations are strong and we have an outstanding network of stores and a talented team to support them. We are now undertaking a financial restructuring, through which we expect to substantially reduce our debt and achieve long-term financial flexibility. This will enable us to invest further in our stores, create an even more exceptional shopping experience for our customers and compete more effectively in today’s highly competitive and evolving market.”
In the company’s filing, FTI Consulting senior managing director Michael Buenzow, who the company retained in December, cites among the challenges facing Tops roughly $450 million in incremental debt that it took on as part of its acquisition by Morgan Stanley and subsequent transactions. As a result, “it has been unable to overcome the debt burden placed on it as a result of the aforementioned transactions,” the filing says. It also outlines the grocery industry challenges Tops has faced — coupled with the its 85% unionized workforce. These factors have combined to put pressure on Tops’ profit margin, Buenzow wrote. He also cites an inability to make capital investments because of its debt. The company also has been making payments to a Teamsters pension fund related to its acquisition of Erie Logistics.
In addition to committing to continue paying suppliers and vendors, Tops said it expects to operate as normal as it navigates the restructuring process.
“Tops has gained strong market share and we continue to distinguish ourselves by offering quality products at affordable prices with superior customer service,” Curci said in a letter to suppliers. “We have an outstanding network of stores and a strong operational team to support them. Through this financial restructuring, we intend to substantially reduce our debt and enhance our long-term financial flexibility, allowing us to invest further in our stores, create an even better shopping experience for our customers and compete more effectively in today’s highly competitive and evolving market.”
WBA, Express Scripts enter specialty Rx purchase agreement
Express Scripts and Walgreens Boots Alliance on Tuesday expanded their group purchasing efforts to include the procurement of specialty drugs.
”As prescription drug needs evolve and specialty medications are prescribed more often, we continue to look for new solutions that will help our patients get the medications they need at an affordable price,” Alex Gourlay, co-COO Walgreens Boots Alliance, said. “Working with Express Scripts, we are partnering to deliver even more value to our patients and clients to improve health outcomes.”
Their work will be supported by ValoremRx Specialty Solutions, which will source specialty drugs to simplify the global supply chain and lower costs for patients and clients, including patients using Express Scripts’ specialty pharmacy Accredo and Walgreens specialty pharmacy.
“Specialty medications represent the most costly and complex drugs. By expanding our efforts with Walgreens Boots Alliance, we will improve our supply chain and ultimately make the use of these medicines, including biosimilars, more affordable and accessible for our patients and clients,” Tim Wentworth, Express Scripts president and CEO, said.
Walgreens has been making recent investments into its specialty arm. For example, just last month Walgreens received a U.S. patent for new proprietary technology that facilitates communication with and counseling of patients prescribed oral oncology medicines.
“As more and more cancer patients are self-administering oral oncolytic medications without medical supervision, there is no way for providers to know if the patient is taking the medication as prescribed or what side effects they may be experiencing,” Rick Miller, senior director, specialty clinical services at AllianceRx Walgreens Prime, stated at the time of the announcement. “This is where our interaction guiding system, coupled with pharmacy experts, becomes extremely valuable as it drives communication with our patients and allows our pharmacists to gather important information about their treatment.”
Through Walgreens Connected Care Oncology, an evidence-based, patient-centered process focused on driving medication adherence and improving patient outcomes, this newly patented technology helps guide interactions with patients, helping them stay on their treatment and manage any possible side effects.
Shoppers seeking easier grocery store experience, Phononic study finds
Shoppers want more from their grocery stores.
Americans, who shop at traditional grocery stores 3.9 times each month, have some very definite opinions about how the outlets could improve. And a more convenient shopping experience heads the list, according to “The Store of the Future” study from Phononic.
Eighty-nine percent of Americans (89%) reported they want to shop in a grocery store that understands how to make buying an easier/more efficient experience, the study found. Eighty-five percent said grocery stores should make it easier to find merchandise.
In other findings, 50% of consumers said supermarkets haven’t figured out how to use technology like other retailers. More than half (56%) said if grocers don’t enter the modern age, people will look for other ways to get their food.
In response to these criticisms, grocers are dabbling with new services, such as food and meal delivery programs. Based on the retailers that are offering food or meal delivery services, one-third of customers have tried it. However, 47% would be more likely to try it if there was a way for the grocer to control the temperature of the food.
In fact, customers want grocers to deploy more “smart” solutions that can help deliver more value and improve customer service. Grocers’ first priority should be to use technology to preserve food quality. Ninety two percent of shoppers said it is important for consistent temperature control of all cold products they sell. More than three-quarters (79%) of consumers said they should consider smart technology in a refrigerated unit to find recipes, or the right pairings for cheese and other foods.
They should also focus on convenience. In addition to technology that makes it easier to pair items and remove friction from the shopping experience, customers also would prefer more strategic merchandising.
For example, better store layouts could improve the shopping experience. Over nine in 10 consumers feel it’s important that the layout of the store makes it easy to find merchandise, and 85% believe grocers should be making it easier to find items.
This includes positioning new impulse items at checkout. For example, 68% of shoppers said if grocery stores had new products at checkout, they would be more likely to try them. Meanwhile, 59% said they would like to see healthier options, and 46% said there should be more frozen or refrigerated options at checkout, with ice cream and wine and beer heading the list.